Markets.

Lyttelton Times, Volume IX, Issue 545, 23 January 1858, Page 4

Markets.

Prom the ' Sydney Morning Herald' of December Ist, we take the following comments on the state of mercantile matters in New South Wales. . . .

It will be recollected by, our readers that some two years ago there existed in this colony s general impression of an approach of a financial crisis. This idea was fostered by a portion of the Press. "We happen to know that it was also entertained by gentlemen conversant with colonial finances;"and that it was advancing steadily to realise itself. We may claim credit for resolutely opposing this idea* We did so in the belief that the depression resulted in part from sympathy with Melbourne — then passing through a commercial storm —that generally the capital of the colony was sufficient to enable all in a sound condition to tide over the embarrassment, and especially that the immense yield of gold spread over the colonies must revive trade the moment confidence returned. These representations did not appear incredible to many who were not without countervailing fears. The banks possessed the power to aid those in temporary difficulties. Melboxirne soon revived —the prosperity of the staple interests of the colony soon reduced its liabilities, and,the crisis happily passed without any very decided mischief.

We do not say that at the present moment we are equally confident. Melbourne has to pass through another commercial hurricane; those firms which have had experience and have become wise will probably be less scathed; but the system of trade in a gold country exposes it to these recurring tempests. The English merchant ventures stock—for he wants a market; he draws against it—his returns will answer his -\ purposes, if they restore his capital—if not he is ] enabled by drafts to turn over a crisis in his af- - j fairs. The very length of the voyage is an increase of temptation, for if his returns are in- fi adequate, it prolongs his credit. In England there are thousands of firms—some of whom annually venture on this game of commercial chess—and they are sufficient in number to ruin the traders of Melbourne. It is impossible I on any other ground to explain the mad shipments and enormous imports; to understand"'! how it is possible for men to sacrifice hundreds of thousands of property, and to:do so, in the face of warning and experience. Were it im-", possible to raise money on shipments then this miserable system would be abated. " The Governments of all the colonies have financial difficulties. They naturally wish to borrow on the spot. They are -putting forth many, schemes, all of which trench on trading capital. Their bills and debentures" are better than ordi- ! nary paper, and all who have money to invest will naturally prefer them to any other temporary security. Thus, as we have always seen, the Government is in .want of the capital when it specially is required for commerce. .'; ■• ~Y; We see thus the prospect of financial difficulty j which will perhaps press on Melbourne most heavily, but will extend to every colony beside. Those who have imported largely from England will encounter the competition of goods—the debris of many a commercial wreck in the sister colonies; and their safety wiii depend on their I power to await the reaction. We have already noticed that the land policy of the Government is likely to increase these disasters. It is not' conjecture, but certainty, that the banking institutions will be deeply affected by the consequences sure to follow. They are now sufficiently anxious to retain deposits, to pay an interest for them, some on daily, others on monthly balances. When, however, the land ' Bill takes effect, a subduction of capital will at once follow. Everything, will perhaps for a time look the same; but, a3 the machinery of speculation is perfected, it will go on. Every man will condemn it as as temerity in others, and yet strain his last effort to get possession of an estate. This is a subject of merriment and rejoicing to the Ministers. They rather enjoy the idea of lending a "balance to the banks at interest, if only for a few months, and yet spending freely. It will be a time of official hilarity and good cheer, a time for grants to towns for improvements, and concessions to charities, so long as the process of sub'd' notion shall endure. '' '. '~ A few months would, however, be sufficients put an end to this epoch of hilarity; ; Acconnno- | dation bills would be no longer lost among those j of,trade, but they would shflwr themselves in renewals; the* little speculators would give up to the gigantic land" dealers; the sale of land at five shillings,' having set up effectual barriers jto colonisation, would be at an end for a time:—and than even the Government would find how hard it is to raise taxes out of an impoverished people. , . It is in such a state of things that our merchants, who look on Parliament a3 .a farce, who would not cross the threshold to promote the welfare of the colony, will learn that there is a connexion between public, commercial, and domestic interests, and that we require something raore than scented gloves to save these interests from sledge hammers. . _ - ;

We offer these warnings with a perfect consciousness that they will not be effectual. Some indeed may see the coming storm, —and secure themselves, ere the fragments of many homes .and hopes/shall strew the strand. , It, is not our practice to. aggravate'existing difficulties' by I,gloomy anticipation, we only ask' for timely reflection; we might yer save the' credit of - the coloriy,-r-preserve'the subbrdmatiortof capital to I legitimate trade, and.-eyen.gaju sonic advantages oyerour neighbo.urs by tl^e stability of tfur instifutibns-;- bn't jf ill pull, at * the' pillars of tie hoiiiie together it must?fiill.' •; - :•> "::■,"•: j , ' From the 'Argus lot tlie' 24th ofMToveiji--' I ber.twe • extract'the .following on the position of .mercantile affairs m'Melbqurne :~ . ...T,Jie faces* of mercantiie men are mut-h overcast just now- for; accordingto;.their compreheti--si vej formula; which xme hears iised a- 'dozen

times-iu a day, "things are looking very dull.*' One is farther informed that markets are fearfully ".overstocked*" sales difficult to effect, money desperately * tight," and, above all, that as a cause and. aggravation of such evils, English shippers are pouring goods into the market in the most reckkss unanuer. Society, it.seems, is already sur&ltxNl with imported eatables and drinkabk*. *zxd smothered with soft goods, and when ""last *vbrto?s Mt ** more vessels were being laid on aa4 s»» gwds shipped, and the eagerness to *M|» j«sis»k seemed unabated. "Sir," •ays soaw J»ei«ber of the Melbourne branch of the fious*? csf IXxmbey and Son, "Before the year's out there'll be* five hundred thousand bushels of oats in Melbourne. It's absolutely ruinous." Another disconsolate person is absolutely crushed beneath a weight of Cork butter. "Humanly speaking, Sir," he tells, " that very butter is'worth a shilling a pound in Cork at this moment, and I know a party who effected a large purchase in it to-day at 2d.! Nothing can survive sudh over-shipments as these." ,;,, Such are the stories with which our commercial friends overflow; but, to an unsophisticated mind, the tragic element in such tales of plenty becomes the more incomprehensible when we learn that the minority of the merchants of Melbourne are importing on their own account, and that it is at the risk of consignors in the other hemisphere, in the majority of cases, that we are being so grievously afflicted with more food than we can eat, more liquor, than we can drink, more clothes than we can wear, more corn than our horses are able to consume. One is reminded of the anecdote of Sheridan, who, being met with a merry face in the midst of his debts, wag asked how he bore up under, their so welL "Ibear. up easily ' enough*" said he; "the wonder is, how my creditors bear up." So one is at first inclined to think with regard to importations at the risk of British shippers; the wonder,seems, to be that they stand them. It seems a* if -we ought to endure these importations with no more pain than is caused by that very faint sympathy for the misfortunes, of his < neighbour which, no doubt, affects the mind of a highly respectable man when he has just secured an advantage ait the expense of some one else. f

It is too evident, however, that the countenances of men "on Change " are not merely gloomy with the shadow of others' woes. Their sorrow is. too deep to be merely reflected—it is felt to the heart's core—nay, to the bottom of the. very pocket. Then* how is it that the inpouring of wealth upon us should produce ruin? how far does that ruin extend?

In the first place, large importations manifestly affect the holders of stocks of the things imported; and, as the great bulk of goods which arrive, at whose rok soever imported, soon pass into the hands of colonial owners, though the primary and heaviest loss may fall upon the English shippers, every shipment injures colonial traders, those, namely, who have purchased iti predecessors. Again, a large part of the goods sold here on account of English- shippers is sold for bills, guaranteed by the local agents. Tbepurchasers,unable to realise the prices they have -originally given, dishonor their 'bills, and the whole loss falls upon the colony. Storekeepers holding considerable- stocks are all obliged to sell at a loss. Out of all these classes so' affected. many individuals become insolvent, their calamity being thus spread among a wide circle, while of those who do not become insol-1 vent the great bulk are compelled to curtail their expenditure. The process of saving, which, in the aggregate and in the long rjin, constitutes the* most certain cure'for embarrassed circumstances, whether applied to communities or to individuals, tends for the moment rto aggravate the symptoms of commercial distress. People refrain from buying what they would otherwise have bought, or they buy much less than they would otherwise hav# done. In short, while the community is in fact enriched at the expense of the British.capitalist, everybody in his capacity of seller, whether of the things imported, or of other commodities, or even of profes iional services, is injured. .' -•.-■■ i . .

It is ia his capacity of consumer that every one is benefitted, but the benefit is much more gradually and less perceptibly disseminated through society than the evil: The dishonour of a bill on which reliance has been placed, the insolvency, of a large debtor—-these are circumstances of a. striking and palpable kind. A hundred pounds lost in this way makes a much more decided impression than a hundred and fifty pounds saved in the course of a year upon the reduced price of consumable goods. Moreover the large class of persons who are much more interested as sellers than as. consumers, and who, in consequence, have.much more than an average share l in the losses, and onlyr-an> average share in the advantages, arising from very extensive importations, are all collected together in the centres; of trade. In the commercial capital the loss and embarrassment occasioned as we have shown is brought to a focus,' and makes much more impression upon- the mind .than the advantages 'which are, spread over the face of the country, and over a considerable period of time. There can, however, be no doubt that a commercial crisis, brought on by what is called over-importation, when that has, been carried on at the cost and risk of foreign shippers, does increase, and not diminish, the general wealth. ■ ■

One of the effects of such a crisis is to reduce the number of traders;: and this, however disr tressing to the individuals, who are weeded out; must generally.be considered beneficial to the community at large". There are generally many more persons engaged in the mere work of distribution—which is all that any kind of. traders accomplish in the national economy—than there is any occasion for.. During good seasons men crowd into business, arid, though not more than half employed, still make enough to carry on Upon. They are not in a position to accumulate so as to be able to meet the losses of bad years, however, and when these come round, they fail or, disappear. This cannot be regretted; but it is very much to'be regretted that one tendepey about: a commercial crisis is, to niake^the, ridh 'richer at the expense of'the Jess wealthy. To the merchant of-really large resources a period of depression is a kind of seed-time. It is the time at which be makes his purchases. He

sows.his.ready-money, and knows that in due season he will reap his harvest; so well aware of his advantage in this respect is he, that he is not unlikely to aggravate the general alarm," for the sake of profitting by it. He looks as gloomy as he can, refuses to buy, spreads horrible stories of thousands of tons of this, and hundreds of thousands of bushels of that, about to arrive; and then, when the price of these commodities has -become as low as possible, he steps in as a buyer. As we have seen, the loss entailed by a "crisis " falls upon sellers, as at such a time the great bulk of traders.are forced to push sales, even rat a sacrifice, in order to supply themselves with means of meeting their engagements. Those, on the other hand, who are enabled to buy largely at such a period are thus enabled to concentrate in a short space of time, and for their own advantage, a more than average share of those benefits from large importations ; which only reach the great bulk of society in the gradual course of consumption and expenditure. : < i

In short, the evils of the commercial .crisis which is thought to impend are not of a national character. That~which in part causes it will tend to enrich-the community at large*; but in the trading community of Melbourne many cases of individual ruin must be expected, and will strike attention far more powerfully than the good that will be derived by all consumers. Alany distributors will be weeded'out of^the realms of commence, whiler the really rich/will weather the storm, and be the better off for it when it has passed over. „ ,;