Hokitika Guardian & evening Star THURSDAY JULY 1st 1920 THE MONEY MARKET.

Hokitika Guardian, 1 July 1920, Page 2

Hokitika Guardian & evening Star THURSDAY JULY Ist 1920 THE MONEY MARKET.

lifK London cable on Tuesday night witn regard to the Home money market indicated that the financial stringency which is being predicted as <i world-wide condition is beginning to make itself felt at file heart of the Empire, London [is again revolving hack to its former place as the monetary clearing house for the world, and the. lengthy cable, message sent out from there is information for all and sundry lrom which they may adjust tlndr financial operations. A little more than a month ago, Britain had to lace its revised incidence of taxation the general effect of which was to add unitcnaiiy to the burden. But at least the principles of taxation were delinite.y settled and the levy was probably at its limit. The taxpayer knowing now something of his responsibilities, is able to adjust his finances according-

i.V. While the incidence of the taxes was in the balance, and tlie length to which wealth was to be levied upon was an open question, there was no doubt an undue amount of money available for jin'vestment. While the uncertainty and insecurity lasted, money was being invested freely in ill sorts of undertakings so that for tho time being, at least, the wealth would be tied up, and not available in any large surplus for confiscation should that have been decided upon. The uncertainty thus had the effect of driving wealth into production undertakings, whereas otherwise it would have been locked up probably waiting for more lucrative investment. Actually, therefore, the result was more practical than if tho same sum' of money had been taken by taxation, and applied nieroly p to the reduction of the national debt. The wider circulation of the money has resulted in a. greater xpansion of trade and manufacturing, thereby producing lucre and more wealth, than having it tied no in its concrete form idle and 'waiting its opportunity for circulation at fancy prices. The stability brought about by tho finalising of the 'British taxation lias eased the money market to the extent that those possessing the wealth are now able to consider how host ‘o use tlfeir belongings for their own betterment. The cable suggests that a period of stagnation is possible, but this can be only a passing phase. Britain having re-established hersolf as tlie world’s centre, has got to live up *< >

that reputation, and looking to the enormous wealth of -Great Britain :.s revealed by her vast financial transactions these last few months, and her marvellous recovery to her old pivotal position, she must continue to play the Tending part in the money market. Within her storehouses there are evidently vast supplies of commodities and raw material to he turned into manufactured articles, and those will be in demand overseas. This great store of products is mainly paid for, so that

the wealth to be derived from the sale of the goods*' will add to the creditable and surplus funds of the country. There is thus enormous credit to accrue. An l so there is no occasion for a capital fev v which is tackling the economic position at the wrong end. The circulation of more and more capital is the true solution of the position, by utilising the money in increasing production and thereby creating, wealth to carry on the barter which is the worldwide system under which the commerce of the. world is controlled.