COMMERCIAL ITEMS.

Dominion, Volume 3, Issue 836, 7 June 1910, Page 8

COMMERCIAL ITEMS.

INVESTMENT SHAKES. • A sale of New Zealand and River Plato shares at £2 was tho only business in investment shares recorded yesterday. National Bank, buyers £5175.6 d.; Equitable Building, buyers £9 65.; Metropolitan Building, buyers .€l2;. Wellington Trust and Loan, buyers £7 55.; Wellington Deposit, buyers Bs.; National Mortgage, buyers £3 3s. 6d.'; New Zealand and Eiver Plate, buyers £2, sellers £2 Is.; Feilding Gas, buyers £1 Is. 6d.: sellers i£l 35.; Wellington Gas. £10 paid, buyers £18; £6 15s. pad, sellers- £13 10s.; new issue, sellers £2 10s. premium; Standard Insurance, buyers £1 45.; Gear Meat. £4 paid, buyers £10 55.; £1 paid, buyers £2 145.; Meat Export, third issue, buyers. £2 14s. Gd.; New Zealand Shipping, buyers £8 2s. 6d.; Hikurangi Coal, buyers 19s. 6d.; Taupiri Coal, buyers 195.; Wostport Coal, buyers £6 6s. 6d.; LeylandO'Brien Timber, buyers £1 4s. 9d.; Man : ning and Co., eeilers £4 Is.; Tarar.alu Petroleum, buyers 125.; Taringamutu Totara Sawmills, buyers £1 ss. Gd.: Ward and Co., sellers £4 18s. GEAR. MEAT CO. At a meeting of the directors of tho Gear Meat Company, hold yesterday forenoon, an interim dividend at the rate of. 10 per cent, per annum for the half-year ended May 31, was declared. This dividend is payable forthwith. AMERICAN RAILWAYS. The American railway situation . looksgrave, and there is every indication that tho bond market will be depressed. Sometime ago a railway strike was threatened, and several of the more important railway concerns advanced the wages of their employees. Naturally, it was sought to cover this advance by raising freight rates. Schedules of increases were submitted to the Inter-State Commerce Commission'showing increases on commodities ranging from 3 to 31 per cent. The United States Government is obtaining injunctions restraining twenty-five railways belonging to the Western Traffic Association from increasing freights, and this action is said to -have demoralised the stock .markets, while the president of one important railway declares that the credit of American railroads will be almost totally destroyed, and that it will be well nigh impossible for any railroad to.secure a loan. In the meanwhile the financial magnates, like Mr. George Perkins,' of the firm of J. P. Morgan and Co., are endeavouring to' allay the panic feeling, and Mr. .Tames J.'Hill,' thel owner of many miles of railroad declares that Hie uneasiness of Wall Street is largely fictitious. The fact of the matter is that the bond market has been very sensitive for some time past, and this unfortunate aspect of the bond market situation has its bearing on the railroads. Mr. James J. Hill, who lias a way of blurting out awkward facts in railway finance, recently referred to' 'his phaso of the situation as a calamity Mr. Hill expressed tho opinion that the railways require £320,000,000. "This sum iis needed by the railways annually for six years to come, if the country is to escape congestion such as never before has been'experienced." Now, it is wholly probable that the American railways cannot get anv such sum as.this. Tho trouble with the railways is that their requisitions on capital have increased at so enormously rapid a rate that they have far outrun tho normal money market facilities. In 1901 new issues of railway capital amounted to £37 400,000; ill 1902 to £89,600,000; in 1904 to £122 800.000; in 1907 to £260.000,000. They were naturally curtailed during 1908; but •in 1909 tho preliminary figures indicated that all previous records for absorption of capital by American railways were broken Staled ill this way, it ought not to cause great surprise' that the market has become congested. Probably tho main lcs*on of the situation is that the railways must go more slowly, traffic facilities or no traffic facilities.

BANK OF ENGLAND AND THE STATE. Many of those who advocate a Statn Bank appear to labour under the delusion that the Rank of Knglnnd is a Government hank. This is not so: in fact, its relations vith the Government, according to Sir Felix Schuster, are merely those of an ordinary hanker and his client; so that the Bank of England is not a State us ill;. The State ban no voice in Us management, nor Anything hut the most iusignifirant participation in its profits. The bank's connection with the State is that it manages the national debt, and is the bank of the national exchequer; that is to say, it is revenue receiver and paymaster for the Government. It also acts for the Government of India, and for many of the colonial Governments. It appears that the Hanking and Currency Committee of the Associated Chamber of Commerce has discussed a resolution recommending a revision of the relations existing between Hie of England and the Mate In the interest of the. latter.- The Tlauk of England sprang into existence at the hour of the country's need when the national resources had been depleted by war. The hank's privileges were won by advances in ihi- Oovnrmnrat. It was in the year 16M the National Hank was formed, with a. ca-pM.nl of X1.2C0.D00. That was the germ of what Macaulay called "the greatest commercial concern the world lias ever seen." The Hank of hnglancl carries Vinnvv responsibilities. Nor should it be

forgotten that some of its privileges are paid for. Those of the department of issue cost £180,000, and the profit from that portion of its notes which are issued against securities goes to the public. In 1044 the bank was permitted to issue £14,000,000 of its notes on securities which were mostly the Government's debt, amounting at that time to over £11,000,000 Kvery singlo note beyond the £14,000,000 represented by gold coin or bullion. That portion of the note issue not covered by bullion has been increased by enactments since 1844 to £18,450,000. One of the bank's obligations is to purchase all Bold offered at three halfpence under the .Mint price. The annual remuneration for menacing the national debt is £325 per £1,000,000 up to £500,000,000 and £100 for every .subsequent million. ,On Exchequer bonds and bills the bank earns £100 a million, and on Treasury bills £200 a. million. COMMONWEALTH LOANS. The failure of Hie (Vest Australian loan will come as a surprise to the people of that, State. The total debt of West Australia is comparatively small, and the terms upon which the £1,342,000 loun w,i» offered in London were sufl'ciently attractive to make for success, but the undcrwnlers arc left with 88 per cent, of the issue; that is, the public has subscribe.d for only 12 per cent. The "Financial Times" ascribes the failure to the public being tired of the perpetual borrowing of Australia, and to the absence of sinking funds. There is some Irulh in, the latter charge, but it is quite wrong to -.:.v that inu British public is tired ol lending to the States of AustralasiaThere are other attractions engaging the attention of capitalists, but the chief factor just now is the strong disposition that exists to engage in speculative ventures, rather than to seek sound investments giving a moderate return. It is stated thai, Victoria is likely to approach the London market presently, and thorn are strong indications that New South Wales will also be borrowing.