STATE OF THE MONEY MARKET.

Shannon News, 28 December 1923, Page 3

STATE OF THE MONEY MARKET.

LESSONS OP THE SLUMP. BANK PHKSJdStVS VIEWS. Financial .conditions in New Zealand were the subject of comment by Sir George Elliot at the Bank of New Zealand meeting yesterday. They had he said, shown some improvement, though there is still much leeway to be made up. The weather during the winter and early spring was most unfavourable, but the last two months have been much better, and there is, at the moment," every prospect of a largo output of producePrices of staple products are quitb satisfactory, and those primary producers who purchased their land at fair prices, and who are not overburdened with debt, should do reasonably well. Owing to competition from overseas, many of the secondary industries are somewhat inclined to languish. Only by increased efficiency' and by the adoption of the latest methods in working will manufacturers be able to cope successfully with the bood of importations. HEAVY IMPORTS.

" The large volume of imports during the last 12 months is causing some concern, and, notwithstanding the lesson importers had in 1921-22, there is said to be considerable overstocking," Sir George Elliot added. " Articles Oi luxury, especially, have been imported to an extent that raises misgivings among those who recognise the necessity for strict economy in both public and private expenditure." Monetary conditions in London were until a few weeks back much about the same as they were six months ago.. The disturbing influence of the general election has, however, brought about a fall in the value of gilt-edged stocks, and two im-i portant recent issues of New Zealand local body debenturies were unfavourably received by the British public. In Australia, rates have hardened, several of the State Governments paying 51 per cent, free of State and Federal income tax, for ten-year loans, Bank overdraft rates there are practically the same as those in New Zealand. ADVANCES ENCOURAGED. In the Dominion there is no shortage of funds for desirable investment*. In the North Island, where a greater demand for money exists, rates for lirst-class mortgages are from 6 to 6 h per cent., while in the South Island the ruling rate is l> per cent. Local bodies are in some instances paying

5i per cent, for loan issues, but in most cases 5 52 per cent, is paid, and even at the latter figure large investors are not buying freely. The; increased income tax on \ debenture" Issues . has undoubtedly affected these loans; 4i per cent, war loan stock,

free of income tax, at present market prices gives a better return to most investors. The State Advances Department has been inundated with applications for loans, the reason being found in the exceedingly liberal conditions provided by the iegislaflijon passed last session. To some extent, these advances have been applied fotto clear off existing charges, and thus a certain amount of money for investment in other channels is being freecr. In view of the increased capital of the bank, said the chairman, applications to the bank for advances are being encouraged, and no desirable business of a proper banking character has been declined. ' After some exhaustive remarks on exchange rates, Sir George Elliot con-, eluded by observing that New Zealand was settling down to the even tenor of her way, and the difficulties of the past year or two that had been experienced by both the farming and the business communities should, In the long run, have a salutary effect. " In conclusion—two great distinctive facts, he said, stood out —one is this: the farmer who refrained from land speculation come through the time of depression with comparative ease. The other is this: the individuals, linns, or companies who wisely carried steadily on, refraining from,the temptation to take money on deposit at call for the extension and development of their businesses, were the individuals, firms, and companies that.most successfully weathered the financial storm."