OUR SYDNEY LETTER.

Gisborne Standard and Cook County Gazette, Volume III, Issue 418, 18 February 1890, Page 3

OUR SYDNEY LETTER.

SYdnbi, Feb. 5. Bain in torrents has been the principal feature of city life since my last. Metaphorically, as well as literally, it has cast a damper on all sorts of enterprises—philanthropic, social, and commercial. Meetings have been abandoned or only sparsely attended, and the chief care of Sydney humanity has been apparently to keep itself dry—a laudable endeavor in which it has not been always as well seconded as it might have been by the skill of the architect and the fidelity of tbe builder. The rain has found out the weak spots, not only in the jerry-built terraces, but in more pretentious edifices, and has set many people wondering when we shall get such vtn instalment of tbo millennial glory as will ensure lhe prevalence of honest work faithfully done.

Outside, however, the pastoralists are looking for a glorious season. Grass and water will be abundant wherever the rain has fallen, and it is to be hoped that some provi ion will be made for tbe inevitable drought that is sure sooner or later to follow. On one or two stations, notably those of Mr Welter Lamb, great stacks and pits of ensiled fodder are prepared in times of plenty, and constitute an inexpensive an efficient insurance against starvation. Precautions like these are creditable alike to tbe humanity and foresight of those who take them, and have, moreover, a very substantial and tangible result, in warding off ruinous loss. If cur Stock Depaitment were to devote some of its spare time and superfluous energy to the encouragement of commonseuse measures of this kind instead of running about after deadly viruses and ocher French devilry, it would deserve belter of the country than it does at present, and would have a more beneficial effect on the prosperity of the industry whose interests it is supposed to guard. However, it is lo be hoped that pastoral enterprise ia sufficiently energetic to take the initiative on ns own account without waiting for the promptings of ths. bureaucrats.

The Bank returns for the last quarter of last year show that these institutions have been taking advantage of the hoped for return of prosperity to consolidate their position. Tbe aggregate of advanoes'is almost stationary, although for several successive quarters previously it had shown a marked increase. Deposits have also increased, but cash reserves are a little weaker—tbe latter no doubt ex plained by the tightness of tbe money market, I and the consequent exorbitant demand for I gold in the other money markets of lhe world jf The tendency to depletion has been strengthM ened, also, no doubt, by large sums whicJ the colony has had to send away for wtieatl and fodder. The latter drain would have! been stopped by judicious encouragement oil agriculture—a policy which all the colonies! except this one, whether they called themselves! protectionist or free-trade, have unhesitatingly! adopted. In spite of the improving aspect of] affairs there is still considerable financial! stringency. The gambling in shares to which] I have alluded in previous letters is another] element of weakness. The insecurity of the I values upon which such largo sums are stake! I was very evident last week when there was a I general fall equal to some 10 per cant, in I nearly all Barrier stocks, from vary trifling and insignificant causes. Ths rage for 1 gambling, that is tn say, the thirst for getting I rich at other people's expense, and without making any return for the money co gained, has absorbed the energy, attention, and capital of so many men of business, who ought to be engaged in productive pursuits, that the prosperity of the Australian Colonies is in serious peril. The evil is more prominent in Victoria and South Australia than in this colony. In Adelaide, indeed, it is computed that more than half the available wealth of tbe people—a sum considerably larger than the combined value of their total production of wool and wheat together—is invested in mining shares, which are inflated like a balloon to day, and to-morrow may be d>wn to zero. How unstable a basis this ia may be gathered from the fact that the shares of the Broken Hill Proprietory, the beet mine on the whole field, have fluctuated nearly £2O within a very few weeks. A short time ago they were sold at £94. Yesterday they were sold at £74. The mine is a splendid one—one of the wonders of the world, but it has bee-i absurdly over-estimated, For tbe last twelve months it has paid about £5 per share in dividends, which have lately been increased to about £6 a share, It follows that investors at present prices could get a better return for their money on mortgage, with a reasonable certainty of getting back tbe whole of the Jrinolpal. But in mining shares one never mows when the principal and interest will vanish together, It is certain that every mine however rich, becomes poorer the longer it ia worked, and its final exhaustion under the pressure of modern methods of extraction can, in any case, only be a matter of time. Therefore the return from mining investments, to be considered sound, must include—first a sufficiently liberal rate of interest to cover the risk of lodes cutting out or becoming unremunerative, as well as the thousand and one other dangers which attach to a pursuit in which the expenses are constant and enormous, but the returns problematical. Secondly, besides the interest there should be a surplus sufficient to form a sinking fund, in order that the capital may be returned by tbe time the mine is worked out. As for the interest, in most cases 15 or 20 per cent.l would be found unremunerative in the longl run. As for the sinking fund that depends onl tbe number of years' purchase the mine ia worth. Say for example a man is contend with 10 percent, interest (which is quite ini adequate) and thinks 4he mine is good tJ average its present rate of production for ten! years. It is evident that 20 per cent, will bJ by no means too liberal a return. But as J matter of fact few mines can be reckoned worth more than five years' purchase at the) outside. Compare these figures with the' present prices of shares, and you will see howl ruinously rotten is the position of speculators. They profess to ignore all these ooQuderations, but they might as wall profess to ignore the law of gravitation.