MONEY MARKET.

Taranaki Daily News, Volume LII, Issue 60, 5 April 1909, Page 4

MONEY MARKET.

TRADE REVIEW'S COMMENTS. In dealing with the hiomt market the Hew Zealand Trade Review observes:— "The first quarter of 1909 is now past, and the usual ipiarterly returns dealing with the finance and trade of the Dominion during that period will lie looked forward to with considerable interest. Statistical tables, are given to show that iu the current season, so far as it lias gone, the exports of wool, butter, cheese, mutton, lamb, and beef have been, very substantially in excess of those for the same period a year ago; so that there is reason to anticipate that, in spite of low prices for some commodities, the quarter's exports will show tt very handsome total value, indicating so much money brought to the credit of the community. On the other hand, there is reason) to believe tluit the volume of imports for the quarter, constituting the debit side of tile account, will exhibit a substantial shrinkage, thus leaving a good margin of exports over imports. "Attention is being drawn to the effect on the finances oi the Dominion of the mortgage tax and the graduated land tax, as being calculated' to drive money out of New Zealand. The Government borrows' money on debentures at 4 per cciiit., and leads to settlers at l'/ 3 per cent., paying no tax on mortgages. Capitalists and finance companies lending money on mortgage security have to meet this competition and to pay the mortgage tax of (is 3d per eVnt. It is manifest that under these conditions there is little inducement for capital to be brought or left here for investment ill this wav.

"The graduated land tax, again, as now made applicable to city lands and to each shareholder's proportion of interest in lands held by any company, is calculated to disV-ourage the investment of money in such properties. A landowner, driven by, the heavy graduated tax to sell a large block of rural land, wiould liiul himself no better, or little better, oil'if he invested the money in urban or in industrial companies occupying valuable kind in their business. The primary object of this tax was understood to be to facilitate closer

settlement, but for this purpose the taxation of urban land and laud held by industrial companies is oi no avail, and tends to discourage invesltinent, and so keep or drive capital out of the Dominion. It is felt that this should be altered.

"Early in .March it was announced that the New Zealand Government had placed on the London market Treasury bonds for £500,000 bearing interest at 3% per cent., with a currency of three years. It is said that the price obtained was sliMitly under par. "On the 24th March the sum of £•270.000 was distributed in Wellington anion" the shareholders of the Manawatu Railway Company as part payment of the purchase-money of that concern bv the Government. This had some little effect in easing the local market. As to the general position, we thank we niav fairlv applv to New Zealand the words used in its latest issue by the Australasian Banking Record in reference to the Commonwealth, which lire as follows:—■ The position is quite sound,

but until banking resources are augmented a rather restrictive attitude in the matter of advances is likely to continue.' "