COMMERCIAL.

Wellington Independent, Volume XXVI, Issue 3370, 13 December 1871, Page 2

COMMERCIAL.

& THE ENGLISH MONEY MAEKET. The New Zealand Loan and Mercantile Company's Circular for 3rd November has the following review of the money market : — The withdrawals of gold from our. market may bo explained by the fact that foreign houses whose funds had been employed in our discount market transferred by arrangement the English bills they held to France, and she in her turn transferred them to Germany, who by her agents collected them as they fell due and removed the proceeds in English sovereigns to German coffers. The suspicions of tho public were fully justified as to the probable magnitude of the drain, seeing that further overtures had been made to the French Government by a syndicate of prominent English and French capitalists, involving the handing over to tho French Government their acceptances or endorsements for twentyfive millions sterling due in six months for the prepayment of tho fourth half- milliard of the indemnity, a course which was rendered possible by the agreement with Prussia that such instalment might bo paid in notes of the Banks of England, Prussia, Holland, or Belgium, or in first class billsAlthough for a time entertained by France, and proposed by France to Germany, and accepted by Germany, the requirement of a guarantee other than that of the French Government was finally waived by Germany on the financial houses interested deciding to make it a condition of tho agreement that their acceptances should not be discounted, and thus a great danger to tho stability of our market was removed. Fortunate'y for us, this great monetary disturbance ha 3 not sought us out at any unsound juncture, suck as great depression in trade, a deficient harvest, or during an intense speculative mania. Beyond giving a rather rude shock to speculators for the railway stocks, some of which fell from 5 to 15 per cent, and tho extinction of all hope of profit on late emissions of lower-cla3s speculative foreign stocks, which also fell to a considerable discount, the effect on tho general market has been rather favorable than otherwise The rise in tho bank rate to 5 per cent has had the usual effort of turning the Foreign Exchanges in our favor. No les9 a sum than £1,289,000 in gold has been sent into the Bank within tho week embraced in the last Bank return, and there are Bigns that tho discount rates in the open market are softening ; but whether we have already seen tho worst of this business, or our monetary system is to undergo a lengthened derangement by the process of locking up gold in Germany, avowedly for the replenishing of their caisse mililaire and for the promulgation of a gold currency, the only protective course on our part is to watch closely rate of discount, and if 5 per cent will not cheek tho drain, put tho rate up to such a point as will of necessity bring tho other markets of the world under tribute to our necessities. The great Chicago catastrophe has not been without it 3 effect on our Riarket. It was reported by cable that a great fall in the American Exchanges had taken place, and that American securities of all kinds were being pressed on tho New York Exchange for Bale, end as these roports, if true, would naturally bo accompanied by the export of gold from this side, they added to the depi'ession in monetary circles and American securities in sympathy, suffered a relapse on our Stock Exchange. Tho reports were subsequently found to be much exaggerated, if not entirely' false, and all alarm from this cause has now subsided.