SHARES & MINING

Observer, Volume XL, Issue 8, 25 October 1919, Page 24

SHARES & MINING

THE banking returns for the September quarter show a wonderfully satisfactory position, and it may sound very exaggerated to say that the country is rolling in money, but that goes a long way towards describing the actual state of affairs. Compared with a year ago, the free deposits or current account balances are greater by £8,685,072, the actual figures being £30,331,317, as against £21,646,245 a year ago. And the fixed deposits show an increase of £917,607, having advanced from £14,123,961 to £15,041,568. An increase of nine and a-half millions sterling in the deposits is distinctly good.

How does this arise? It Ls due to the greater shipping facilities afforded, thus enabling oiir producers to ship enormous quantities of produce, much of which had accumulated in the stores during the past twelve months and more. It is merely the result of the conversion of an asset in one form into another and more desirable form. The position is really better than ha.s been indicated so far, because the advances have been reduced by £1,617,825, that is to say the aggregate of the advances which averaged in the September quarter of last year at £30,403,695, was twelve months later reduced to £28,785,870' and the difference was- paid out of the realisation of produce.

Broadly stated the customers of the banks are about £11,000,000 better off than they were a year ago. The customers of the Savings Banks are also very much better off, that is to say, the aggregate at the credit has expanded, so that the business community or the users of bankcheques and the industrial community are both better off. This great volume of credit may easily prove detrimental to the community if an unwise use is made of it. The business community or a very large section of it may be trusted to be very careful, because they must make large purchases of foreign merchandise very soon, and the money' will be required to finance these purchases.

There is thus a probability that a fair amount of credit will be transferred in exchange for goods, but there is bound to be a large local expenditure. The general belief is that in November, December, and January there will be an unprecedented expenditure in pleasures associated with the great Christian festival. This Christmas will be *c first Christmas since 1913 that may be said to be absolutely free of national cares. Up to last year we were in the grip of war, while last year the influenza epidemic stifled all pleasures. If, then, this Christmas ihere is a welter of pleasure it will be the natural reaction after six years of enforced quietness. It is due to the people that they, should enjoy themselves this Christmas in an exceptionally free and hearty manner.

Seeing the very large amount at credit ft is surprising that the Victory Loan of £10,000,000 was not fully subscribed. According to the Minister of Finance the subscriptions were £2,000,000 short of the amourit wanted. The Commonwealth Government had the same experience, for they were about £4,----000,000 short of the amount wanted. In Australia, however, the banks came to the rescue, and sub-

scribed the balance so that it was not necessary to use any compulsion. In New Zealand compulsion is to be put into operation, but before such a stringent measure is adopted those who should have subscribed and have, not done so will be afforded an opportunity of takng up their quota. The Government will get the whole amount, and unfortunately the Government needs every penny. * * * It is singular that both in New Zealand and Australia there should have been this difficulty of raising money. Obviously there has come about a change of sentiment, but it would not be fair to say that the people are less patriotic than they were, say, last year. The change is rather an outcome of the feeling of relief from straint. The community may be compared to a dog that has been on the cham for a fortnight, or more, and then suddenly released. A dog under such conditions would go almost mad with delight, and rush about regardless of consequence. The community is in somewhat the same position. They are careless and indifferent to everything except the pleasures of the moment. An accumulation of pleasures is due to them and until they have indulged to the full in this pleasure nothing can be done with them. * * * Europe is also finding considerable difficulty in providing money or credit for the Governments. The British Victory Loan was not the success that was anticipated, although a very large sura was subscribed, and the Treasury has had to resort to the issue of Treasury Bills to finance the affairs of State. The Italian Government proposes issuing an obligatory loan for an indefinite amount, carrying interest at the rate of 1 per cent., to which capital from £800,000 to £2,000,000 and upwards, must contribute in a .graduated proportion at the rate ot sto 40 ncr cent. This is a levy on capital in a vicious form, because there is not adequate remuneration. There has been no such thing as forced labour during the war, and all who worked were adequately paid. ■ • • The French Government is flirting with a proposal for a State Lottery Loan without interest for £100,000,----000, and redeemable in twenty years. On the Continent of Europe they are not troubled with any antigambling sentiment, and it is very probable that this method of raising money will be adopted. The element of chance, the chance of winning a big money prize, will tempt not only the French people, but also people living in other countries, for, after all, this method of gambling is less risky than a "Ticket m Tatts because the money invested will be •repaid' without interest, provided the investor does not win a prize. * * * The French people, and, indeed, most of the peoples of the Continent of Europe, are familiar with, tins form of gambling, for they have had numerous issues of Premium Bonds. Under this scheme the bonds which are payable to bearer carry a small rate of interest, and large money prizes are provided at the quarterly or half-yearly drawings, when a certain number ot the bonds are repaid. A good many of these Premium bonds were marketed in New Zealand, and it was later decided by the Courts _that traffic in them was illegal, and their sale ceased. Many of those bonds are still held, and there is no means of knowing whether those bonds are now of any value, whether they were suspended during the. war to be revived now, or whether any ot them have been drawn for payment The holders of these bonds should take some steps to see how matters stand, for the position may not be hopeless or even bad.

"Constant Reader" writes: While, as you state, in October 11th, I complained of your pessimistic views re the future of New Zealand regarding food products in particular, you have not answered my question, but treated your readers to a mass of figures .so. staggering that "Constant Reader should consider himself completely squashed. The unfairness is shown that while you give in the aggregate some 91 million 800 thousand cattle, beside sheep and hogs, in the Argentine, etc., you do not take the. trouble to ascertain the millions of meat eaters we have, and are likely to have in the world. U.S.A. had increased in population to over 100 million about 10 or 12 years ago, and with the conversion of the North-West into wheat fields, Chicago, which in 1905 had a market of a million and a quarter of beef, sheep, and hogs every four weeks, could not keep up its local demands, and exportation was almost altogether stopped, and although they imported from the' Argentine, they ranged as high as £3 per 1001b. before the war started, and yet New Zealand was kept down by commandeering £2 2s per 1001b, and has only reached £3 at Westfield a few weeks, the largest beef markot in New Zealand. * * * The question I asked was: "Is the reduction you anticipate to be on s£d. per lb. paid for meat to the producer in New Zealand or on the Is. lOd. to 2s. "paid for it by the consumer in England?" * * * "Is the reduction you anticipate in butter on Is. 6d. per lb. paid to producer in New' Zealand or 2s. 6d. paid for it in London by consumers alongside U.S.A. butter purchased at L>s. 7d. a lb?" ts * * This is the question yourself and our leading financiers all ignore. These questions I have jealously watched for years, and have noted that our cables from Britain during the war are silent with regard to actual prices. They are generally as the clipoing I sent you: "Cabled September 15, 10,525 bales offered. 1,900 from New Zealand; good attendance ; several American buyers, etc., etc." "Prices showed an advance of from 7 to 12 per cent, above August prices, and in lamb, and cross-bred, which showed a 5 per cent, improvement, the Bradford market is firm and unchanged. * * * Evidently this is good enough for producers to know, and in August it was on a par. I note that "you anticipate no reduction in wool for possibly a decade." Was it not predicted* by those who know everything that as soon as the war was over'wool would fall, and figures were given showing stocks held in Africa, etc., etc., showing without a doubt that this would eventuate. * * * Now, the same know-alls have changed their opinions, and find it is better to prophesy after the event. I wonder if these people, who have bodies to clothe, have not mouths to fill, and will require our food-stuffs as well as our wool ? You state, the producer has not lost one penny piece by the commandeering, etc., etc." New Zealand producer mutton, lamb, and beef approx. at 53d. per lb.; then someone has found something that was not lost between s|d. and Is. lOd. to 2s. The assertion is preposterous. * * * Then take wool. The average price is Is. 2£d. to Is, 3d. per -lb., and only 991b. oaid for for every 1001b. sold. The producer's wife goes to the draper for common knitting black wool, and pays Is. 6d. per oz , weighed like gold dust, 245. per lb., and then we are to believe that not one penny niece has been lost by the producer. "Constant Reader" saw cotton spinning at the Crystal Pair ace in 1856. No one in attendance for a considerable time. In later

years he saw acres of floor space where binder twine was being spun, eight looms being, attended to by one girl. Where does the difference come in between Is. 3d., or double that, 2s. 6d. and 245., with all the improvements in machinery since 1856?

You say the Government had a right to sell where and how they liked after purchasing. Under ordinary circumstances certainly, and you quote Mr. Massey. I will also quote that gentleman. Mr. Massey made a proposition to the New Zealand producer that after the necessities of troops at the near zone the surplus would be sold at practically cost, or fair value to the British consumer, giving them a cheap joint. This the producer agreed to, but the retailer said that as New Zealand meat was in small quantities it would not be fair to sell it at the profits on cost, and then the next customer having to pay the higher price of local production (which was non-com-mandeered). So he quietly slipped the difference in his own pocket, and "to Hades" with the consumer and the New Zealand producer. * * * To characterise my assertions based on facts and figures as "fairy tales" and childish, is hardly the treatment one expects in an important question like this after over fifty years' experience. (From "Herald," October 17.)

PRICE OF EXPORTED MEAT

Impending Rise Reported

MELBOURNE, Oct. 16

It is unofficially stated that the price of meat exported under contract to the Imperial Government is to be raised to Bd. a pound.