THE MONEY MARKET

Southland Times, Issue 17560, 26 January 1914, Page 5

THE MONEY MARKET

SIR JOSKFH 'WARD’S VIEWS, Sir Joseph Ward save a Post report-’ '-r an interview’ on Friday on loans ami borrowing generally, bavins special reference to tbo casing of the money market in London as indicated by the oversubscription of the Victorian loan. “I am not in the least surprised at the position disclosed in connection with the recent Victorian loan." said Sir Joseph. "1 have held all through, and have expressed myself so on more than one occasion, that it was ridiculous to suppose. with the largo accumulations of money going on in the Old Country, that by any unnatural or forced processes a rate of interest higher than the normal one could bo maintained for long:, and ; t shows the advisability of this country not rushing- into long-dated loans -it a heavy cost to the country For instance, if the seventy millions of money that the Drench contemplated raising a short time ago had been put upon the market, the great bulk of it would' have hem subscribed by Drench investors, ami it would scarcely have appreciably affected the London market, excepting so far ns investors could temporarily use it to try and get the best rates they could in other directions I repeat what I have so often said, that the ordinary accumulations of fresh moneys for investment through the London Stock Exchange varied between three hundred and four hundred millions a year, and no one who has studied the fluctuations of the London money market for the last twenty-five years can do other than d-

cognise that the knowledge of the principal Investors, or, rather, the important channels through which investments are made on behalf of small investors, does not make them realise that they cannot get their investments out if they attempt to keep up a higher rate of interest than can induce those wanting monev to relieve them of the enormous annual accumulations that are going on. Tli e Continental countries have, of course, in recent times had a disturbing effect upon the financial world, because the most experienced statesmen bnd diplomatists in the Old Land were uncertain as to where it was going to end or what developments might take place. This uncertainty has pased. and but for the feverish activity going on in a few of the principal countries of the world in the matter of building ahead for naval purposes, money would come back to a lower rate than has been the case for the last few years. How far the change in the London money market can affect the money market here is not easy to forecast. That depends upon circumstances, which obviously to the people of experience in this country must have a material effect upon this important matter here. There is one thing quite clear to my mind —namely, that care should be exercised in not committing Hew Zealand in its public loans over too long a period of years. The more so. of course, if a high rate of interest lias to be paid for our loans. It is ouito clear to my mind, as it must be to ’others, that the higher the rate the country pays, the higher the average rate that will prevail for ordinary investments in New Zealand, and that, of course, adversely affects business of all kinds.” THE GOLD RESERVE. (Times Sydney Sun Special Cable.) LONDON’. January 23. Sir Edward Holden, the chairman, at the London City Bank meeting, insisted that the gold reserve of England was insufficient to meet reasonable demands. He urged the appointment of committees to consider the grave situation. AN INDIAN LOAN. LONDON. January 24. Received 2 nth, 5.5 p.m. There are rumours of an impending Indian loan of £10.000,000.