THE PRICE OF MONEY.

Taranaki Daily News, Volume LIV, Issue 274, 16 May 1912, Page 6

THE PRICE OF MONEY.

HARDENING 'TENDENCY. OBSERVATIONS ABROAD BY MR. HAROLD BEAUCHAMP. While in London recently Mr. Harold Beauchamp, the late chairman of directors of the Bank of New Zealand, had j many opportunities of getting into touch with financiers and others interested in the movements of the money market. He took particular note of the manner in which the financial operations of the Dominion are regarded, and made some interesting observations thereon to a representative of the Wellington Times, who interviewed him on Saturday. "ft is true." he said, "that strong, exception has been taken by many financiers at Home to the rapid manner in which our national debt has been piled up during the past five or six years. Still, it is recognised that we have magnificent assets, and if we are prepared to pay the rate demanded by lenders 1 do not anticipate that we will have any difficulty in raising all the money we may from time to time require. ft is only a question of rate. There will be mt hesitation in lending the money at all; only it will be at a price. Everywhere I went I found that New Zealand was held in most excellent repute. Her loyal and patriotic attitude towards the Empire is still the theme of general comment at Home, and this has had a very good effect." STRIKES DISTF'" 1 . BUSINESS.

Discussing the position of the money market generally, Mr. Beauchamp remarked that he arrived in London in the thick of the railway strike, was there while the taxi-cab, waterside workers' and other strikes were on, ,'and left the metropolis in March while, the miners' strike was in full swing. This succession of strikes naturally had a most disturbing effect upon the trade and industries of the United Kingdom. It was anticipated that a large volume of business would be permanently driven away to other countries. The strikes 'also'had a disconcerting effect upon capital, and many people who in the past were content to place their investments in the Old Country were now seeking an outlet elsewhere.

As far as he could ascertain, Canada was offering the greatest attractions for the investment of British capita], and with the groat development that was taking place in that Dominion it was anticipated that millions of pounds would continue to flow thither. In 1910 it was estimated that no less than £53.000,000 of British money was invested in Cunada. Having seen something of the great Dominion on his way Home he regarded it as one of the most attractive countries in the British Empire for the investment of money. Bates, too, as compared with those in Australasia, were distinctly better. For example, in Vancouver it was easy to get as high as 7 per cent, for money advanced on first mortgages, the security being real estate, whilst in other parts of the Dominion 6 per cent, was quite a common rate.

STRONG DEMAND FOR MONEY. Owing to the strong demand existing for money in different parts of the world rates were hardening when Mr. Beauchainp left London, and he thought it would now be difficult to float a loan on behalf of the Australasian States, including New Zealand, at a lesser rate than 4 per cent, to yield par to the borrower. Countries which were borrowing freely in London at present were Canada, China, Japan and several of the South American Republics. AUSTRALIAN BANKS CAUTIOUS.

Mr. Beauchamp particularly noticed that money was becoming dearer in Australia, where the banks were pursuing a restrictive policy. In this they had two objects—firstly, to restrain people from paying inordinate values for land of all descriptions, and, secondly, a desire to shorten sail in anticipation of the drought with which a substantial portion of the Australian continent was threatened. A representative of one of the largest lending institutions in Australasia told Mr. Beauchamp that lie anticipated his company's rate would be not less than 5 1 /, per cent, of ordinary mortgages almost immediately. This, of course, was bound to have an eff<ct upon the finances of New Zealand also.