THE MONEY MARKET.

Gisborne Times, Volume XXVI, Issue 2317, 9 October 1908, Page 3

THE MONEY MARKET.

THE PRESENT STRINGENCY

PROSPECT FOR THE FUTURE.

[Special to “Times.”] AVELLINGTON, Oct, 8. The New Zealand Trade Review (a sound authority on finance) makes some interesting comments an the present stringency in the money market. The following is worth quoting: “There is no appreciable change to be noted in the-conditions prevailing in the money market of the Dominion, nor do we think that any material -improvement is to be reasonably ex-, pectoil for'some little time. Some sanguine authorities promise us an amelioration in these - matters within the next two or three months, but though there may very well be some increase in the supply of money within the time, we fear it will be inconsiderable in comparison with tho volume of demand pressing on the market. As we have previously stated, the chief factors that have brought about the present stringency are: (a) reduction in the value of our imports, (b) an extravagancoof imports, (c) absorption of local funds by the Government and local governing bodies, and (d) land speculation leading to inflated valuations. : As to the first of the.se factors, the prospects for the current season are still far from bright. The conditions of the.dairy trade are most encouraging, but even if this is maintained to the end of the season the loss on wool and hemp will far outweigh the gain from this source. As to the second factor, we fully expect to see a curtailment in the volume of imports during the current and a few , following quarters, thus helping importers to reduce excessive stocks. If, however, as is to be hoped, a period of thrift and economy supervenes, the policy of reducing stocks may prove a slow one. As to the third factor, it is clear that for a time recourse will have to be made to outside markets for any loans which it may be necessary to raise, and it is satisfactory to note that Sir Joseph AVard has stated that the new £1,250,000 loan will not he raised in the Dominion. The inflated prices of land may be expected to undergo serious reduction, and though that may be followed by healthier conditions, it will nob in tlio meantime help the money market. Tlio dairy season is now in full swing, .and substantial sums will be brought into circulation as tlio butter and cheese come forward for shipment, and the raising of the £1,250,000 loan when the transaction is accomplished, will give a little ease to the position. AVe do nob by any means take a gloomy view of the situation, being convinced of the thoroughness of the - Dominion, but we feel that nothing is to be gained by raising expectations thatcannot be realised. New .Zealand will right itself, but a reasonable time must be allowed for the process. Banks, having raised their deposit rates, are naturally charging correspondingly for advances. They are, moreover, confining their assistance to strictly trading purposes, and are refusing and calling in advances on land. This is a wise and proper policy.”