DROP IN CONSOLS

Waikato Times, Volume 93, Issue 14494, 18 October 1920, Page 5

DROP IN CONSOLS

REPORTED FALL TO £35 10s. EFFECT IN NEW ZEALAND. REFLEX LIKELY TO BE FELT. By Telegraph—Special to Times. WELLINGTON, Saturday. Cable advice received from London conveyed the somewhat startling intelligence that Imperial Consuls had dropped from H.*'o (the quotation on October 12) to £35 10s. When spoken to on the subject, Mr Harold Beauchamp, chairman of directors of the Bank of New Zealand, said: "So far we haw not been advised of the substantial drop in the value of Consols, but it is quite feasible that all gilt-edged securities will steadily fall, owing to the increased scarcity and the tightness of money. Seven to per rent is now tue recognised rate ruling in London for advances against first-class securities, and it seems to me that it is only a question of a short time, owing to the enormous amount of money there is in New Zealand, whrn there will be a reflex action to a g •■"der or lesser ext.mt. Just now there \:\ a shortness of money in London, which is embarrassing \ustralian hanks in financing a very large amount of exports, and the posit' n will not be eased until Australasia gets the benefit of the approaching season's exports. It is unfortunate in the circumstances that the outlook for wool at the moment is so discouraging. So far as one can ascertain, unless the market materially improves in the near future (whicli according to latest advices is not probable), banks will more or less have a difficulty in financing the requirements of their customers. This, I fancy, though, will affect Australia more than this Domin.on. "At present the banks in this country are not feeling the strain nearly s.i much as they are in Australia. W e are looking forward to the money that will be available in the course of a few weeks arising from the sale of the approaching season's butter to the Imperial O.nvernimnt, and the draft that -will be available against the export of Cheese. At the high prices we are likely to'receive for these products 1 j think we may look to get at least ill, , 000,000 or more."