THE ENGLISH MONEY MARKET.

New Zealand Times, Volume XXXIII, Issue 5409, 29 July 1878, Page 3

THE ENGLISH MONEY MARKET.

The London correspondent of the Melbourne Avyus, writing from London on Juno 7th, supplies to that paper the following information:— Mr. William Weatgarth states that the colonial securities recently depressed have recovered their respective values. So buoyant has been tho . general tone that oven the Queensland and New Zealand stocks have not, beyond a passing depression, been affected by the late unusually largo loan issues. The Now Zea'and stocks on the first announcement of tho loan receded in the case of tho larger outstanding issues, tho and 5 per cents,, as much as 1 i and 2 per cent., but on the success of tho loan being known, they at once recovered. . .. Tho entire list of the colonial and municipal stocks presents an advance in price,_ varying from J to 8 per cent., since our' previous circular four weeks ago. Tho most decided advances have been in the New South Wales, Victoria, and -South Australian Government stocks. The Now South Wales 4 per cents., at the unprecedented price of 102-4, have advanced as much ns 3 per cent. The Victoria 6 per cents., duo 1891, at 118-120, have made the same advance. The New South Wales long-term fives, at 108-111, are 1J per cent, higher ; Vi-toria fours, at 98-90, ore Ig per cent, higher, and South Australian fours, at 97J-98i, are Ig per cent, higher. The Tasmanian 6 per cents,, at 117-119, are 2 per cent, higher. Tho. New.-Zealand and Queensland stocks have on an average only as yet recovered

the fall they respectively sustained from the effect of the new loans. . In the provincial, municipal, and miscellaneous'loans there has been a very general advance averaging about 1 per cent. The Auckland, Christchurch, Duuedin, 'and Brisbane city bonds are'each 1 per cent, higher, while the Wellington city are 2 per cent, higher. The • various - harbor bonds also, namely, those of Auckland, Napier, and Otago, are each 1 per cent, higher. _ The ease in tho money market continues unabated. The rates for discount in tho open market had dropped so low that on the 25th ult. the discount houses found themselves compelted to lower their allowance for deposits, which was immediately followed by a further decline in discount rates. Obeying this initiation, the Bank of England directors on Thursday, the 30th ult., reduced the official minimum from 3 to per cent., after it had stood at that point for nine weeks. Since then the outside market rate has dwindled down to 1J per cent., yet without stimulating the demand for money. Xu the absence of any considerable export demand for gold the position of the Bank of England is intrinsically stronger than for some time past. Tho reserve is now about 11 \ millions, every week’s return of late having shown an improvement; and although that amount is half a-million less than, when an upward movement to 3 per cent, took place at tho end of March, yet the liabilities then ou public and private deposits were 351; millions against millions now. Tho ratio between tho reserve and liabilities is just 40 per cent.— a more satisfactory state of things than for several weeks past. The foreign exchanges, however, are becoming less favorable than they were. ■'

NEW ZEALAND LOAN. New Zealand is again a borrower in the London market, and this time to an amount which when announced fairly took away the breath of prudent financial critics. The prospectus of tho loan was issued a week ago by the Bank of England, acting on behalf of the Crown Agents of the colonies, and the amount applied for was £3,500,000, of which one million is to be used to redeem short-dated debentures now iu circulation, while £2,500,000 is for public works, immigration, and to cover certain provincial liabilities. The rate of interest is 5 per cent., the issue price at par, and the loan is redeemable in not less than ten or more than forty years. In making tho announcement, several of our papers wrote warningly of the danger to ■so young a colony of piling, up an amount of national indebtedness altogether beyond its present resources. It was pointed out by The Times that the pressure of the existing debt is equivalent to £45 per head of the population, and by the Economist that it is equal to £55 per headbeing far in excess of the indebtedness of any country in the world. In spite, however, of these well-meant warnings, there was a great rush of subscriptions, and although two days were allowed for the lodgment of applications, it transpired tint within a few hours the required amount had been more than covered. By the' close of Tuesday, when the country .subscriptions had ’ all arrived, the aggregate amount applied for bad reached the enormous total of nearly nine millions, thus proving that anything approaching a substantial colonial security finds ready buyers. Subscribers to the loan receive only about 40 per cent, of the amounts applied for.