The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER FRIDAY, JULY 16, 1915. THE MONEY MARKET.

Stratford Evening Post, Volume XXVII, Issue 65, 16 July 1915, Page 4

The Stratford Evening Post WITH WHICH IS INCORPORATED THE EGMONT SETTLER FRIDAY, JULY 16, 1915. THE MONEY MARKET.

The issue of the usual quarterly returns of the Banks trading in New Zealand, showing theii; average assets and liabilities during the quarter ended Juno 30th, indicate that for ordinary times the funds now held would be abundant. Private deposits have ■reached the enormous total of £28,645,155, or fully three million more than the total a year ago. Against this the banks have loaned out in the form of advances and discounts £23. • 423.575, or about half a million less than a year ago. The difference between these two main items amounts to just over live millions, whereas a year ago it was only one and a hall .millions, a Wellington correspondent points out. Such a tremendous accumulation ol iunds gives ample evidence of the splendid returns we have realised from the season’s exports, assisted to a certain extent by reduced importation. I his is. of course, the time of year when our funds are at their highest and in ordinary Linies such an accumulation ol lunds would mean an assured supply ot comparatively cheap money. However should the Oovernmcnt raise much of the ten millions locally it will make a decided difference to the supply available for ordinary purposes! The mysteries of finance are not easily made clear to ordinary mortals, and oven experts may difter on some very crucial questions connected with finance. A deal ot dismission has followed the suggestion by the Government that a part oi the war loan be raised locally, and as to the wisdom ot this there is great ditferenco of opinion. Presumably the Government think it would be good policy or they would not make the proposition, hut certain authorities on hanking oppose such a course strongly. The Christchurch Press—-a sound Government organ—does not support raising any of the war loan Ideally, and in a lecent issue says:— “The financial position di-docl by the banking returns lor the June

(jiiartor in wholesome hum sntisu'el„rv. If anything. so it would s-em. j ill- country ha* boon hem*.it<* ( ! hy Hi One of Hie most sti iking feni tures of the returns is the p;rent in- | crease in the deposits—neo-riy half a

million in fixed, and 2jJ millions in free deposits. It might appear that here is a very substantial amount of loose money available lor investment in a Government loan on good terms; hut it would be a very bad tiling tor| the country if this cash were locked up in that way. .Money is plentiful and pretty easy in New Zealand just now, but this condition cannot be expected to last, and the free margin in sight ought to be left available for the many purposes for which it will in due course he needed. 'I his is a borrowing country, and it will he lar better if the Government obtains what money it requires from London, leaving the pulic lure to devote its savings and accumulations to the normal purposes ol investment.’’ A directly opposite view of the position is taken by the Lyttelton Times (which certainly does not ordinarily support' the Government) and its conclusion

is: “The occasion is opportune to suggest once more the advisability of raising a public works loan in New Zealand . At the moment the banks of issue and the Post Office Savings Bank have margins of deposits over advances or withdrawals aggregating about £6,000,000, to say nothing of other savings hanks and investment societies. We believe a couple of millions of this money might be very usefully borrowed by the Government for expenditure upon reproductive works and enterprises. Such a loan would probably be readily subscribed if the Government gave investors the invitation, for large, and small capitalists to combine good business with patriotism.” .Ministers will he puzzled to know whose advice to take.