THE Wairarapa Age MORNING DAILY. FRIDAY, JUNE 14, 1907. CHEAP MONEY.

Wairarapa Age, Volume XXX, Issue 8464, 14 June 1907, Page 4

THE Wairarapa Age MORNING DAILY. FRIDAY, JUNE 14, 1907. CHEAP MONEY.

Perhaps the best definition of the attitude which the Liberal Government desire i£o adopt towards the colonies is that put forward by the London Daily News, which "hopes that Mr Deakin will carry away with him the message that England will be glad to give the colonies freetrade, a free navy, the cheapest money market, and common citizenship, but that she will neither tax her food nor restrict her industry." This matter of cheap money, while not made prominent in the Conference, is still one of the essential advantages which we owe to being part of the British Empire. It is easy for any nation to set its own value on its securities, and say that other nations should live up to them. Financiers, however, do their own valuing of securities. It is usually said that there is no sentiment in the money market, and that but the realities of Imperialism, "which are solid fact, have a splendid cash value to the colonies. Germany, the third, if not the second, wealthiest nation in Europe, recently sought to raise £20,000,000, and secured it by offering 4 per cent. At this rate there was a good demand for the security, and it was tendered for heavily by English capitalists. It is certain that the German Government are much too economical -to have offered 4 per cent, if there was any likelihood of 3J proving acceptable to bond holders. Yet 31 is the normal for Australasian loans, although Australasia is far less wealthy than Germany, and far more heavily burdened with debt. Yet merely through being a section of the Empire we receive this great advantage. The reason for this, as has been suggested, is not sentimental but practical. In the first place, there is the fact that almost every country outside the British Empire has at some timeor another defaulted as far as Bri-

tish creditors were concerned, while theJßritish colonies have not done so. In the next place the fate of English investors in foreign stocks in the event of a long war with a foreign * power is unpleasant to contemplate. Then there is the general feeling that people cf the British race, wherever they are, will somehow maintain a certain uniformity of conduct and a certain mercantile honesty of practice on which their cousins may depend. Apart from these reasons, which appeal to the private capitalist, there is the important fact that Australasian stocks are recognised as gilt-edged securities by the United Kingdom, and so rendered available for trust purposes. This is the greatest boon which the richest country in the world has at its disposal. That it is not without its cost to England is indicated by the fall in British Consols which sold above par when they held a somewhat exclusive monopoly as trustee investments. This advantage is not to be j forgotten in estimating the Imperial situation as it stands at present.