THE MONEY MARKET.

Timaru Herald, Volume XIIC, Issue 13905, 17 May 1909, Page 3

THE MONEY MARKET.

THE INFLUENCE OF RECENT " TRADING. FURTHER BENEFITS ANTICIPATED. The imports i-nd exports of the Dominion during the March quarter and for the year ending with that period, i together with the Customs revenue re- , turns for the same terms, are dealt with in the current issue of the "Trade Review." " From these figures." the "Review" goes on to say. " we learn that during the quarter the exports exceeded the imports in total value by some three millions, accounting for the improvement exhibited by the bank returns for the same period, amounting to two millions, inclusive of the Government account. The change for the better in private accounts amounted to £'l-767,000. Thc.se figures represent, of course, . the averages for the three months, and. we are therefore justified, we think. *in anticipating that. some further benefit may accrue to the banking returns for the current quarter from the £3.000,000 excess of exnnrts. "The June quarter often yields a moderate excess of exports over imports, but the September and December quarters compose the off season fur c\ports. and the imports are practicallv alwa vs iu excess in those periods. We anticipate tint- the current ouartcr will make an unusually good showing lit this respect as the exports of meat and dairy produce will both be aliove the average for the season, while in imports we fully expect to see continued shrinkage, probably to the end of the year. .Exports of grain wili also 'take place beyond anything that we have had for some years. "The- Post Office Savings Bank returns show that there is no diminution in.-the volume of dejiosits, hut that the .strong demend for money results in the withdrawals being practically as heavy as deposits." THE HANKING- PROBLEM. The " Review "" also comments upon the recent suggestion by Sir Joseph Ward that legislation might be desirable in order to facilitate the establishment of additional banks in the Dominion. On this point the pajier says: —" Further hankiug facilities would, no doubt, be of advantage, but additional financial resources of another character are even more urgently needed at the present time: The great difficulty at the moment is to get assistance in land transactions. '. p he Advances to Settlers ..Office aud the lew price of money have driven most of the purely lending com. panics out of the country. Meantime what with Government debentures, the attractions of the Post Office Savings Bank, and the borrowing of local governing bodies, the floating funds of the community have been to a large extent absorbed. Now," at a time of stringency, the Advances to Settlers Office falls far short of being able to meet the demands for loans, and the funds of the banks are all needed in other directions. Ijong-dated loans or. mortgage security do not constitute the best class of banking business, though they are resorted to at times when money is suj>er-abundant and demand weak. When demand revives the borrower on laud is thrown overhand left to his own resources. W hat "is wanted even more than additional banks is more lending companies, or at all events more mone\* available for advances on land. There are firms, companies, and associations in business in New /eland that do practically every branch of banking business except the issue of notes, a privilege which the banks regard as ut very little value,' and for the establishment of such houses no legislation is required. The advances -inadpby- these -trading houses are, however, given generally with the view of securing other business and not simply for the employment of capital as is the case with a purely lending company. '• The present stringency is caused chiefly by a heavy aud sudden increase in iin ports with an equally sudden drop in the value of exports, and the fact that these factors are working on an impoverished money market. " The volume of imports is being steadily reduced. To increase the volume' of exports is not quite so easy though quite as important. What is required for this purpose is energetic and efficient steps to get the unoccupied lands of the Dominion brought endcr occupation and profitable production. This involves nof, only a live and intelligent land policy, but a plentiful supply of money to assist tin l pro-cc-s. • For the latter purpose whatever tends to drive away capital should b-» amended, and measures shcnld tak'-n to en-onrage the introduction of fresh capital, or to increase vn- l:<r—-I-o-vnly of money at the disposal of the Advances to Settlers Office."