The Daily News. TUESDAY, JANUARY 27, 1914. THE MONEY MARKET.

Taranaki Daily News, Volume LVI, Issue 178, 27 January 1914, Page 4

The Daily News. TUESDAY, JANUARY 27, 1914. THE MONEY MARKET.

So largely is the .progress and prosperity of New Zealand dependent-on borrowed money, that any fluctuation in the ii:iancial market is-keenly-watched, and Hi effect discussed. For some time pa >'. both Australia and New Zealand Innexperienced considerable difficulty in oV taming; the capital necessary for developmental purposes, even at an increased cost of flotation charges and interest. The news that recently came to hand relative to the success of the Victorian loan indicates that the financial stringency lias relaxed, and this is confirmed by the reduction of the Bank of England discount rate from five to four and and a-half per cent., and by the returns, recently published, for the banks domg business in Xew Zealand. A further evidence of uneasiness in the market is the rumor of an impending loan of ten millions sterling for India. Whether, as was suggested in a recent cable, the setbacks given to syndicalism have created a more healthy confidence among live lending institutions, or whatever may be the cause, its effect is certainly welcome. The fact that the' Victorian loan was trebly subscribed is in itself inidieative of lire desire to secure gilt-edged investments, and the easing of the market, though forecasted by those who were acquainted with financial conditions, is none the less gratifying. The demands of the Balkan States, the increasing - cost cf armaments, and the 'huge draw for South American enterprises, it was contended, precluded the probability of any ' substantial relief. Fortunately on this occasion the experts appear to have been false prophets, and the prospect for borrowers wears a brighter hue. In spite of the strike, this season promises to be a record one for our staple industries, and with a lage supply of relatively cheap money available at Home we may [look forward confidently to a relaxation Jof that stringency which has been 30, I painfully apparent in the local money market for many months past. Throughout tbc Dominion there will be a feeling of satisfaction at the improved prospect of cheaper money in the near future. The low price of Consols indicates that money is. being diverted to more profitable investments than Government stocks. The money stream diverted from trade flows readily enough, finding its own level, into channels where the rate of interest may not be so high but the security is gerater. Does this, Sthen, portend a slacking oil' of British , trade? There is no doubt a elo?e rclationj, ship between high produce prices and I "plenty of work," as exporters from i this country to the United Kingdom will Jno doubt 'have observed. The coming J developments of the London money mar- { ket will undoubtedly be interesting alike j to the investor and to the men who {send their meat, butter, cheese and wool

to the same market. With large loans falling; due in Australia and Xew Zealand in the near future this opportune; loosening of the reins will relieve Stale Treasurers from grave anxiety and also have u stimulating effect on trade generally,