The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, JUNE 8, 1928. WHY AND WHEREFORE?

Hokitika Guardian, 8 June 1928, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, JUNE 8, 1928. WHY AND WHEREFORE?

It is rather remarkable that money awaits placement in Auckland, while unemployment is more rile there than any other part of New Zealand. The money congestion is considerable, and as a matter of fact, capital is finding its way to Australia for more profitable investment than is possible in New Zealand. A press correspondent opens up the subject by reporting that for months the Auckland money market has been heavily loaded with lice capital awaiting investment, and now that the proceeds ot a splendid tanning vear and the surplus from an improved trade balance are adding their weight the position has become such as to afford an interesting field for inquiry. Those who daily pulse the financial movements of the city and district, stockbrokers, solicitors, bankers and money lenders, agree that there is at present more money awaiting placement than has been the ease for a long while. Their views on the causes and effects of the situation advance two salient facts, that investors are still demanding a. far greater margin of security than they required a few year|s ago, and that New Zealand affords only two avenues for investment of' its surplus wealth. With regard to the former aspect, a financial critic recently took the Auckland Savings Bank Trustees to task for allegedly asking too much margin in the way of security on loans. Tt is difficult to criticise with, justification along such lines, because naturally each case must be dealt, with on its merits, hut the instance given seems to afford some key to the general situation. Naturally where money is loaned the lender looks in the first instance to his security. Unfortunately land and property values generally have been inflated of late, and where advances are asked for the lender is quite right in safeguarding himself according to his own judgment. City values are generally of a higher standard, and the personal factor has to Ik* taken into account, so that to provide the safe security the writing down margin as

stated values is considerable. This practice seems to be operating generally in Auckland, as indeed in other parts, for the report often nappenrs that money for broad acres is scarce. This is due chiefly because lenders will not accept borrowers’ values, but write them down to such an extent that the loanable sum will not meet the requirements of the borrower, and the money is not advanced. The other avenue for investment in New Zealand, and very few concerns are being promoted |ust now. Timber growing was one avenue, and then later there was flax 4 growing ventures. Mining ventures are very scarce just now. 1\ itli speculations of this character at a low ebb, the ready investor turns to the share market, and a good deal of business is being done daily in that respect. Public and local body loans have their attractions, hut the locking up of the money for long periods is not always attractive, and money goes into marketable scrip which has a regular demand with the public. The fact that capital is being sent out of the country is not pleasant to contemplate a time when New Zealand needs ready money, and the position having been made public though the press, some* tiling should be made to make the money of more service in the country. Local borrowing on shorter dated debentures might help to save the position. hut the healthiest channel would be through land investment if borrower and lender could come to terms as to values. Settlers can do with money as was manifested under the Government lending schemes, and some adaptation of those successful proposals in the past might assist to save the position and assist, too, to retain more o fthe capital wealth in our own country, which requires it so much for material development.