WELLINGTON NEWS

Hokitika Guardian, 16 June 1925, Page 4

WELLINGTON NEWS

EXCHANGE DATES.

(Special to “Guardian”.)

WELLINGTON. June 12

The Associated Hanks have again altered their exchange rates on London, and the new rates are very ninth in favour of the exporters, that is the producers. There is an all-round reduction of lOs per cent on the buying rat:\ demand drafts being now negotiable at - JOs discount as against 30s per cent previously. The banks speak of their rates as buying and selling—that is a bank will buy a draft on London from a customer or sell a drait on London. It is the exporters who have funds in London they wish to trausler to New Zealand, these funds being the proceeds of the sale of produce in Britain. The exporter now saves 10s on the C'llMl as compared with the rate ruling up to .June 7th. The importer however is not receiving the same consideration for whereas he bad previously been allowed 1-Ts .per cent discount on a demand draft he is now only allowed os per cent. The importers, however, have no ground lor complaint for prior to the restoration ol the gold standard they were doing remarkably well and ii is on record that some of the larger firms made as much as t'o.iTOII out of their London exchanges. Bight.lv lids saving should have been passed on to the customer, but that was not done. Now that flic exchange i- somewhat against them the charge is to be passed on to the customer which as a great trust is doing considerable harm to the Dominion. Infortunately bankers do not attempt to defend themselves in the public press of the country because that is a gainst tradition, nevertheless, they have a very good case. The annual meeting of shareholders in ti e Bank ot New Zealand will be held next week when we may expect from the Cluiirm.au a it mprel.ensive review of the economic conditions of the country. It will be surprising if some sort of a warning is not given with respect to the probabl • effects of a drop in prices and particularly ill wool. Till-: wool. POSITION". Those intimately a-sociated with t!i" Xew Zealand wool trade cannot see what good I- likelv t > arise from llie projected revival of ‘ Bawra " system, of control. According to Sir John Higgins who is to submit a scheme of control to a meeting of graziers to be held in Melbourne on June L’.'i, lira majority of tit,- graziers must support the scheme, otherwise it would lie difficult if not impossible to negotiate for finance, and finance is the big problem.. It lias been suggested in Sydney that a " futures ” market would do more to stabilise the market than anything else. It is a fact that wool is about the only important commodity which has not the facility el a “ futures ” market to enable buyers and sellers to operate daily. This is simply a market whore buying and selling for future delivery is arranged. .Such markets exist in connection with wheat, cotton, all the industrial metals and a variety of other commodities have the facilities for a “ futures ” market. There are all sorts and descriptions of cotton, but any manufacturer of cotton goods can take tin order for twelve months ahead and cover himself against markets risks In- Inlying the equivalent in “futures.” l ikewise any producer of cotton can sell bis crop at anv moment by selling the equivalent in “ futures." If the cotton depreciates before it reaches the consumer so do the " futures,” ami vice versa. .Snhstit tile wool for cot ton and there i- no reason why the scheme should not work as well. To establish a “futures" market. for wool would require one partieijlar grade to be taken as the basis for trading in •‘futures," and the actual wool as it was sold would he so many points, or pence on if better quality titan the basis, or so many noiuls oii’ it lower in quality. It is stated that a. “ future-- ’ market would not m miv way interieve with the present method ol selling the actual wool by auction. It will he interesting to see wind kind ot scheme Sir ,J. Higgins will -übmit to the glaziers of Australia. I'll K HOrKiNT; I’BOBI.EM. it is beginning io dawn upon the dull intellects ol some o! our |>oliticians that tie housing shortage is not a cause, hut an effect, the effect of stupid iitteiTereiice by politicians and the prolific production of grandmotherly legislation. The shortage of houses is largely due to the fact that the enterprise of the builder has been stifled bv the moratorium, the rent restrictions, the embargo on content, the proliihitL ■ duties on some building materials and the seheme of the (Toveriimcnt of lending up to 0.-, per cent of the value. There has been sueli a rush on the Government lor loans that there is not snhieicni to go round, and mam- borrowers must wait, not months hut years, before Hiey ran hope to get anv money from (lie Government. I), mauds of individuals is making it di'dieult for Ibe local Imdiesgio obtain loans from H:e Government. The gramlmotlierly legislnlion is working mischief hv retarding progress. I’rivale enterprise would have met the sit nation if left ahum, but politii mils must buv vote,-,.