WELLINGTON NOTES

Hokitika Guardian, 28 November 1924, Page 1

WELLINGTON NOTES

WELLINGTON, Xnvember 26. (Special to “Guardian”.) EFFECTS OF WOOL I’TIICES. i A marvellous variety of opinions ex- - ist with, respect to the effects of the 1 strong wool market. The naturally optimistic see all sorts of good results that are likely to arise from the new t situation created. Some think that - there will he a pressing demand for ' farm lands with a consequent rise in 1 values, others think that New Zealand ' will he Hooded with American motor ’ cars and that there will he enn.siderj ahe activity in parade buildings. Others seem tti think that the totali- - sator leturns will pi up with a bound ; during the Christmas holidays, others * again maintain that tlie number of racehorse owners will increase. 'l’here are those who are rather inclined to be cautious in their pronouncements, and these say they cannot see how values of farm lands can go up, and they even doubt whether there will be much traflic in broad acres at present prices. The worst time to invest in a farm as a working proposition is when produce prices are high, as they are now. The tendency is naturally to ask a relatively high price for land and the buyer will be left when produce prices fall as they most certainly will. Then again financing dealings in farms will lie a comparatively difficult matter. There will not be a repetition of the many mortgages stunt. Sellers will want a very large proportion of the purchase money in cash and will lie averse lo taking second and thiul mortgages. Then again it will be dillieiilt to borrow on mortgage of broad acres. Mortgagees have been thoroughly sickened with the moratorium and there is a heavy taxation which makes mortgage investments an unprofitable business. Many companies which previously looked for mortgages are now avoiding .such, home the financing of purchases of fa nils is not going to lie an easy mailer. business •people here are hoping that the fa.rmers will use their gains sensibly by paying off or reducing mortgages and by improvements of the farms. If this were attended to there would not be so much 101 l lo spend on American motor ears. Aery little scope for gambling in iarm lands will lie available and it is certain that the banks will discountenance any such movement. The slump of 1020-21 must be fresh in the memory of most people and we do not want a repetition ol those troubles. A AVAL!. STJtKET FTX.VNTTF.iI ■ A cable message dated New York November II published in the New Zealand press stated that Mr .). A. M. Flder. the Commonwealth Trade Commissioner in the I’niled States had received intimation that American financiers were prepared to make loans to the State Governments of Australia and to municipalities and local bodies, ami (i per cent was mentioned as the pirhahle rate of interest. It was also staled that representative, ol the National City Hank of New York and the nlair bnnd-is'iiing linn were on their way I i Australia. Ibis latter is confirmed bv the f: i* I that At. Picrpniif V. Davies of New York, a vit e-| resident of the Xntionnl City Company is now on bis way to ■Australia by the Tahiti. The National City Company is p: a< tically a branch of the National City Hank and handles the investmeiil securities which the bank is prohibited l, v American law from handling. When Queensland I .a-sell the baud Act which afterwards "became known as the “Kepudiatioii Al t” the Queensland Government was shill out of the I-• n i d-ill market and was forced to turn to New York. Air E. G. Theodore, the Queenshind Premier, did not relish paying i per cent. In New York financiers, brl he was obliged to agree to the terms, lie borrowed 12.000.0110 dollars in Ot,iher 1021 at 7 per cent. He burrowed a, .second time in New York in Fehi mirv 1022. when lie .secured 10,000.000 dollars paying 0 per cent. Queensland had a large loan falling due ill-London early this year and it was necessary 0> provide for this maturing loan. Air Theodore went to New Voile where he was duly feted and was told on what terms he t mild borrow. He then went In London, where alter prolonged negotiation-, he agreed to the terms fixed |,y the London hankers. This involved some modi flea lion of the ltepudialion Ad. .However the Queensland conversion loan was llnabd in London, and Mr Thomlore on his return t > Australia admitted that by nceepting the London trims ill preference to those nflered by New York financiers the Stale had saved about £:!0<b0(Ml per annum. Afr Davies will be welcomed wherevel lie ones in Australia, because of bis prominent business <onneetioiis in Now A oi k. Imt he is not likely to receive any cui oiirageilleiit to issue loans lor the State Governments or Australian loan authorities. An tlie course of his interview with a press representative Air Davies was good enough to admit that mi thoughtful American hanker believed that New York hail or would supplant London as the world’s financial centre. American bankers fully recognise that the sound judgment and wisdom of the London hankers grows out of experience aiciinmlaled through generations.