THE MONEY MARKET.

Taranaki Daily News, Volume LIV, Issue 164, 10 January 1912, Page 3

THE MONEY MARKET.

(OUTLOOK FOR 1912. STRINGENCY EXPECTED DURING THE YEAR. SOME REASONS GIVEN. Auckland, January 6. For some little time past a feeling has been prevalent in commercial and financial circles that the needle points to a tightening of the money marget during 1912, so this morning a pressman waited on one of Auckland's leaders of finance for a public expression of opinion on the subject.

"There is no doubt about it," he replied, in answer to the visitor's query. "The indications do point to a certain stringency during the present year. One factor towards this stringency is that for some time past traders have been over-importing, and unless that ceases there is likely to be a considerable tightening; for it must always be borne in mind that without a reasonable margin between exports and imports the shoe will pinch sooner or later, and if you look back at our Customs figures, for instance, for the past twelve months you will see that while our imports continue to go up at a pretty big rate, the exports have not maintained a corresponding progress. Of course, if we have favorable weather conditions during this month the prospects are that farmers will have an exceedingly good season. The consequence of that will be that an increase in the volume of our exports,! and that in a great measure will be a ' set off against the over-importation that has taken place. The whole tiling really hinges on the prosperity of the producer, for it is through him primarily that outside money flows into the country. "As far as Auckland is concerned, we shall probably suffer less through this stringency than will other parts of the Dominion, one big reason being the tremendous amount of money which is being expended here now by the Government and public bodies in building operations of one sort and another. "Another factor that is likely to contribute to a shortness of money is the big developmental progress in Australia, and the consequent demand over there for money, and this demand promises to be the greater from the fact that they are now experiencing less plentiful seasons, with corresponding smaller exports. The result of this is felt over here because Australian financial institutions have less funds available for advances in New Zealand. You see, there are eo many ways in which money is affected. It is such a sensitive sort of commodity,, and nothing is so subject to reflexive in-) /fttaence, apart altogether from local j l conditions. There is genuine need, there- i fore, for caution' generally, but at the same time there is no occasion for un- . due anxiety. ( "There is, by the way, one matter 1 which financial people are viewing with some misgivings, and that is the exceedingly high prices that are being paid fqr t country land, and also for suburban land. There are already sufficient suburban allotments on the Auckland market to satisfy all settlement demands for a good while, and yet the cutting-up and selling continues at an unabated rate. There seems to be little about it that, sooner or later, someone will have to 'nurse the baby.' These inflated land values will be searched out if any suspicion of a de-1 pression comes along, and meantime; . there is a very active demand for money • all over New Zealand, the reasons being largely to be found in the efforts of people to finance their land operations, whether genuine or speculative, together with the great activity in building that is at present noticeable all over the country."