TOWN EDITION. The Daily Telegraph SATURDAY, NOVEMBER 12, 1881.

Daily Telegraph (Napier), Issue 3235, 12 November 1881, Page 2

TOWN EDITION. The Daily Telegraph SATURDAY, NOVEMBER 12, 1881.

A leading article in a local paper draws as a conclusion from the unprecedented amount aud cheapness of money now being offered for loan that the colony is not necessarily in such a prosperous condition as it would be if money were less abundant. The article lays it down r.s i rule that it is not the amount of money offered on loan which is the test of a country's prosperity. And the writer goes on to say that " the simple rule of the English financier is, in short, that plentiful money, and consequent low interest, means bad trade ; while short money and high rates point infallibly to good trade." This rule is true enouab in England, where all the available money is English capital, but it does not in the least apply to a country like New Zealand, where all the money seeking investment is foreign capital. In England unemployed capital signifies distrust of offered securities, and money consequently accumulates till low rateß of interest are accepted for sound investments. In New Zealand the reverse is the case. English capitalists seek good investments in all parts of the world ; and when we find them pushing business in competition with each other in this colony till money is cheaper than it has ever been known before, we may be certain that they regard our sec»rities as sound, and the condition of the country as prosperous. We all know that during the commercial depression 1868-69-70

money was ti,,'ht. atid dear, fdr there was •o little f.itb In tbe colony that the Banks ;Mi\ed in th» : , and foreign capital ceased to ft* .<vv into the country. Tbe best iiidroatiV.il of this colony's prosperity, *f. take it, i : the amount of confidence • hst capitalize in the securities it has to off.; for borrowed money. Following up its argument, the article to whiGh we have referred goes on to cay : — "Now, we put it to the upholders of the property tax whether tile present abundance of money and low rates may not be the result of industries clogged by the tax. . . I! money could find profitable employment ifc w° u id hot go beg_;irig, and Ihe fact that it rernaibs oh band even when offered at very low rates is not an encouraging fign." In reply it may be said it is evident that the property tax bas had no effect upon capital because r be borrower pay? the tax, and tbe fact that money i. going begging shows that «uch is the confidence placed in New Zealand securities that there is actually more foreign capital in the country than can find investment. This idle capital would be speedily withdrawn if that confi lence did rot exist. There is, however, other eviderj.;a a. to the prosperity of this country besides that of the money market with "cspect 0 freehold securities, for it is iv t'ios»; in r°stirrents that foreign capital

irS'.'/naily >um\is. The rise and fall in t'.a: value of>foch bas always been con- ;=?,_•.--;= a sine trade barometer'in Eog- !_»(], more particularly with regard to mil way _*■■-.k. Though we have no .>-.h;ij_» of sbo 'ml mentioned order quoted >v New 'Zetland, we have nevertheless Sharon of niuny and varied companies i-.oncinuaMy valued, in the commercial irt- • ellif/enee ol' the daily journal-. As an index of the Improvement of trade in this crdony we have only to compare a «hare report of the present lime with one issued a year or two bsck. Two years ago, with the exception of scrip in a few of the old and well-established concerns, all shares were for sale at a discount, or at very slightly above far. At the present time it is impossible for any capitalist or investor to buy stock of our local or serai-local institutions except sit a premium. A shirt* report issued by one of our town share-brokers quotes the prices of scrip ot about twenty companies at values varying from a small advance to 150 pjr cent, premium. Ail our colonial bank stock i* uni>urcbasab!e except at a considerable ativance, ar >d this is especially the case with New Zealand Bank shares. Tbe scares of our six colonial,insurance companies 9re all at a satisfactory premium to holders, whilst the shareholders in all the miscellaneous companies whose stock is on tbe market, demand a premium before selling. Our own local gas company is in a ilouri'-bing condition, and holders require an ad ranee from buyers of at least 30 per cent. The examples mentioned all point to a vary considerably improved position of commercial affairs in this colony. Nor doe- this fact require the further evidence that is suppf ed by the Custom's returns /or tho v>er>ember quarter, and by the railways, ti»at show a fair rate of interest on the cost of the construction of those works. We believe that with the settlement ot our native difficulties we can confidently anticipate a new era ot prosperity for New Zealand.