WELLINGTON NEWS

Hokitika Guardian, 25 August 1928, Page 1

WELLINGTON NEWS

ARGENTINE’S PROSPERITY

(Special to ’ Guardian.”)

WELLINGTON, August 24

Argentine, like New Zealand and Australia, is a primary producer, but the South American Republic produces a greater variety of commodities than do the Commonwealth and the Dominion. It exports wool, meat, butter, wheat, maize and linseed and produces all these commodities in quantity. It is perhaps best known for its export of chilled beef, which practically controls the Smithfield market so far as imported meat is concerned. It has so many strings to its bow that depression in one line is made up in others. Argentine is steadily increasing in wealth, and it is interesting to find that the past year witnessed a marked increase in prosperity in that country as gauged by banking statistics. This is evidenced by an increase in bank deposits in a little more than 14 months of about 310,000,000 dollars paper and a decrease in discounts and advances of 136,000,000 dollars paper. This is without precedent in Argentina’s financial history, according to the “River Plate Review;” which says that while admitting that consolidation of the State Railway debts and other financial operations has helped to free the market from what was becoming an incubus, the great growth in deposits has still to bo satisfactorily explained. The growth has been contemporary with an unusually steady absorption by local investors of local issues. And while it might be conceded that part of the heavy increase in the gold cash held by- the Banco de la Nacione, equally derives, from the proceeds of loans issued in the United States, the “ Review ” declares that such explanations do not go to the root o'f the matter, and continues: “The truth is that Argentina grows richer every day, a phenomenon naturally reflected, firstly' in the banking account, secondly in the figures of the stocks and shares held by banks, and similar institutions in safe custody, and thirdly in the widespread building at present going on in Ruenos Aires and many interior cities. It is somewhat remarkable that the steady increase in wealth has not been accompanied by anything in the nature of a boom, for value of stocks, land, and commodities have risen imperceptibly, and without recourse to the extraneous aid of borrowed capital. Tt is safe to hazard that Argentina is more self-supporting in financial and commercial matters than she was 20 years ago. A setback is always possible, hut even the most pessimistic appreciation of the near fuutrc fails to discover any real source of alarm. Argentina, as far as. the average man can sec, is in a very pleasant position, and nothing short of gross mismanagement is likelv to upset it.” MORTGAGES.

The movements in the volume of mortgages registered and discharged are interesting and are a study in themselves. The moratorium was lifted in June 1920 and for the year ended June 1921 there was a big expansion in the mortgages registered, the number being in round figures £60,990,000. The amount discharged in that year 025,200,000 was comparatively higher, still the excess of registrations at 035,800,000 was pheomcnally large. There was a sharp decline in the registrations in the next two years for they were only £29,700,000 in 1922, dropping to £27,655,000 in 1923. The discharges were particularly small in 1922, amounting to only £12,000,000, but in 1923 the amount had risen to £16,300,000. There is no doubt that the inflation which took place in 1919-20 and the absurdly high prices paid for farm land ultimately caused considerable difficulty to farmers to raise money' on mortgage. That difficulty still exists to some extent and that perhaps is why there is such a demand for State loans. In 1924 there was a. sharp rise in mortgages registered, the total being nearly £41,000,000. There was a small increase in the following your and in the period 1925-20 the mortgage registrations jumped to £47,000,000, and the discharges to £33,300,000. that was the close of the five-year period from 1920-21 and no doubt in that year adjustments had to be made. In the past two years there has been a big falling off, the registrations in 19-/ I,cine only £36,400,000, and for the year just closed £33,175,000. . 1 ery few private investors are lending on mortgage but prefer investing in Stock Exchange securities.