The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER SATURDAY, JULY 10, 1915. THE LOCAL MONEY MARKET.

Stratford Evening Post, Volume XXVII, Issue 60, 10 July 1915, Page 4

The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER SATURDAY, JULY 10, 1915. THE LOCAL MONEY MARKET.

Dismissing the proposal to raise a ten million loan for war purposes, the Wellington Evening Post says, if the Minister for Finance has made himself quite clear in an interview he recently gave a representative of the journal mentioned, he intends to raise a, portion of the ten million war loan locally. He could not say what the amount would be nor the terms upon which it would be raised until he had secured further information from London. Further, ho i« reported to have said he anticipated no difficulty" in securing what money the Dominion required in London, but the Imperial authorities evidently wished that local people should be asked to provide some part of the funds that wore needed to pay for New Zealand's military efforts. The Post goes on to say: The point to lie noted in Mr Allen's remarks is that it is the intention to come into the local market to raise some portion of the ten millions loan. How much he wishes to raise here or elsewhere lie lias not yet disclosed. The idea of attempting to raise any of the loan here is viewed with gravity by certain financial men in Wellington, representing interests spread over the whole of the Dominion. It is admitted that there is a very large amount of money in being in the country in the shape of tixed deposits and free deposits accounts) in the banks, but in the abnormal circumstances of the time, the influence of the war upon the world at large, even to its remotest part, it is held that there is not a penny too much, figuratively speaking. The great new war loan of the Imperial Government, the amount of which is unspecified (applications for which dose to-day), was admittedly a competing factor. The return on that loan To the investor of 1$ per cent, was excellent, providing he was domiciled in Fngland. but taking income tax there and income tax here, together with loss of in;crest, exchange, and other deductions that would have to l>c made, the return to the New Zealand investor was but :\\ per cent. For those having Consols to convert the position was more advantageous. Financial houses in N*w Zealand having branch,-:; ir na . ' In*! ing Consuls will no doubt, take uuvun

tage of the scheme of conversion, and a few hundreds of thousands of pounds of what might be described as New Zealand money will be required for the purpose of conversion, for it has to be borne in mind that be-, before converting Consols it will be necessary to subscribe and pay a sum equal to double the amount of that represented by the .conversion of the Consols. One well-acquainted with the financial resources of New Zealand told the interviewer: "To draw upon our local supplies of money for the ten million loan, or instalments of it. as the Minister appears to contemplate doing, is distinctly inadvisable. It must have but one effect, and that will be to diminish tinown local trade, and lock it up in 'Government scrip, which is not liquid." A banker approached on the matter expressed himself as follows: "The longer we can keep local money for local requirements, the better, be-j cause we are hound to have a pull| back. The amount of money at call is large, but we must regard it asl a sort of reserve fund, to provide for our requirements when the pinch conies, as come it must. It certainly is essential that the money required should be raised in London or else-, where, for it would be a great mistake at the present time to lock up our surplus funds for this purpose. 1 We ought really to go into training.! lor the big financial fight that is coming. It certainly would be foolish (in iny judgment) to weaken ourselves at this stage of the struggle if we can' possibly avoid doing so. I will g<> further, ami say it would be danger-] ous to use in) our funds which are required to meet actual day to clay trading purposes."