THE COLONIST. Published Every Morning. Saturday, February 12, 1910. BRITISH CAPITAL IN AUSTRALASIA.

Colonist, Volume LII, Issue 1271, 12 February 1910, Page 2

THE COLONIST. PublishedEEeryv cry Morn ing. Saturday, February 12, 1910. BRITISH CAPITAL IN AUSTRALASIA.

Accouding to the "Australasian Joint Stock Companies 1 Year Book," the five and a. quarter million people 1 of Australasia employ capital amount- ( ing to no less a sum than £568,146,---000, and employ it profitably. Of this ' amount £360,012,000 is held by British investors resident outside Austra- ( lasia, and only £208,134,000 by in- , vestors resident in Australia and New Zealand, the percentages being 63i and 36* respectively. Government and corporation loans represent upwards of 70 per cent of the British' proportion. Large as the latter proportion is, it has shown, a considerable decrease in the last ten years. In 1898 the proportion was 75J per cent," having been in 1888 probably about 80 per cent. A correspondent who has analysed the figures says it may be asked whether the alleged decrease in the British total can be a fact, especially in view of the new Australian Government loans floated in London. One of the answers is that the major part of those new loans has. been devoted to the repayment of loans 'falling. due, and the total of the London holdings, even of Government stocks; has increased comparatively slowly since 1893. Another answer is to be found in the fact that the decrease in the British section' is wholly amongst the public companies, and the British Jand-mortgage company in Australasia seems to be dying out, the,, local life offices underbidding it. Many have been liquidated. In that way (including some land companies) £15,000,000 has disappeared from Australasia in ten years. The bank marketable deposits created in 1893 have mostly disappeared, and the Australian banks, which years ago drew large sums from the Mother Country, now, on the contrary, keep large balances in London. The loss of capital in mining is proverbial, and it has not been replaced; and then there have been losses duo to. writing off. • Wastage of capital must be allowed for nearly everywhere, and •the British dnvestors have not made good these reductions. The process of repayment still goes on, as witness the Peel River and South Australian Companies, the New Zealand Trust aud Loan Companies, and others at the present time. The contraction is -'natural, as with the growth of Australasian capital it is right it should take up the securities offering here, while British capital seeks a more lucrative field where Government stocks are concerned. Yet the return made upon this £568,000,000 of capi- \ tal is substantial, the interest and dividends paid in 1908 reaching £26,120,000, as. shown in the book referred to. Of this £26,120,000, about £15,000,000 was payable to British investors, and just over £11,000,000 to Australasian investors. The British payments averaged 4J per cent on £360,000,000, and the Australasian over 5$ per cent on £208,000,000, the higher"' payments to the latter being due to the much smaller .proportion of Government stock held by Australasians. In 1906 tho interest and dividend payments were £25,579,000, the mining dividends in 1908 showing a reduction of £1,620,000, but those in financial and trading companies an increase of over £2,000,000. In 1904 the total payments was £22,627,000, and in 1898 they were £18,613,000. Thus the total amount paid in dividends has in- ■ creased by 40 per cent in ten years, while the capital has. increased by only 9 per cent. No wonder, then, that 'Australasian investments have risen greatly on the local markets. That Federation has had much to do "with the improvement cannot be argued; but good seasons, remunerative prices, tho extension of railways and settlement, ' and a great increase of production have told more distinctly. It has all been accomplished without any increase in the ten years, but rather a decrease, in the volume of outside capital. That outside capital gave us our great start in life, and at one time, probably, Australasia held more British capital than any other section of the globe. But it is not so now.