MONEY MARKET

Hokitika Guardian, 12 May 1930, Page 2

MONEY MARKET

CONDITIONS ABROAD

SIR MARK SHELDON’S VIEWS

n u ll Tv'ERLINGTON^May, [ Financial conditions abroad ,as they relate to Great Britain, jana their effect upon 'Ndiv 1 Zealand' trade were discussed'‘by Sir Mark. Sheldon jj ‘a prominent Sidney finanb'ier’,! who arrived from'Sitn Francisco by. .the Manama to-da|yv Sir 'Mark,‘'“who is accompanied! by 1 his son,'' Mr puthbert Shfeldon, lias been since January/and lie will leavje for Sydney by' the Maungiinui to-morrow. “New 'Zealand’s '. credit', 'is good, abroad,” ’said l,y Sir Mark" <! and it ranks just after Canada among the Dominions. This has been brought about by the good Government of. New Zealand during I 'the past ten or fifteen years, ancl the country’s restraint in its borrowing policy. Although the prices for wool, butter arid other exports have fallen This'fact 'is causing no 'alarm on the 'i other side as it is recognised that 5 prices for these vraW ‘products must'Eis'e' 1 hgain,

“There how alTses ; thq'''qu^ktib , n concerning manufactured ’ febbds; Prices for them l, 'have 1 -fallen minutely compared' with 'tile fall in raw products, .therefore' ‘maiii : ijfactures' ij h'ave gotto 'fall in priee or raw products 1 have got to rise. Tllis ls' , an economic'fact which ,is fully recognised. Whatever happens bffew Zealdnd : through hhr 1 '‘ 'moderate' tariff will ‘get 1 the' benefit; “I think the tendency will be for the Bank of England rate to remain low at any rate until the end of the iiinglish summer,” Sir Mark said in discussing finance at Home. “I should say there would be a tendency -for the rate to advance at the beginning of the winter. Loose or day-to-day money is cheap, hut. investment money is very scarce in London. The reason why loose money is plentiful is that- there-is a loss of confidence' in buying raw'i ptodficts and-therefore money usually put out on these articles is not needed. For a permanent investment l everything is looked at v;erv carefully.' This tightness has been Brought About by the accumulaition of gold - : by France.' She is now the second, largest gold-holdirig country in the world with something like .£400,000,000 worth of gold,- or more than twice as much as " that held 'byEngland. This has disturbed - the •money market very considerably. “October’s break in the New York Stock Exchange and the Hatry collapse in London Brought about a feeling of unrest, and an extreme want of confidence. It takes some time for that to heal up, but when it dops we can look for a change. The general opinion is that there will be a very favourable deal made shortly in the London money market, through the conversion of some of Great'Britain’s funded debt at more favourable rates than she is paying at the moment.” Sir Mark added that there was not a great deal of American capital finding jts way to Europe at present. In the past five or six years she had loaned large sums to Germany for municipal and other purposes. Hie question was bein@> asked whether Germany could carry the burden of these American loans and at the same time pay her reparations. The general opinion was that Germany would be able to meet her liabilities. Sir Mark said that America was not lending anywhere near the amount of money abroad that she was when he was in England a year ago.