THE Wairarapa Age MORNING DAILY. TUESDAY, JUNE 18, 1907. THE LONDON MONEY MARKET.

Wairarapa Age, Volume XXX, Issue 8467, 18 June 1907, Page 4

THE Wairarapa Age MORNING DAILY. TUESDAY, JUNE 18, 1907. THE LONDON MONEY MARKET.

The present state of the London money market is exciting a good deal of comment, money is cheap, even gilt edged securities show no sign of recovering from their depressed state. v What is the explanation? Is the absence of the public from the markets a sign of apathy, of lack of courage, or lack of means? Apathy or indifference, says the writer of a remarkable article in the newspaper Scotsman, probably plays no part among the influences acting on the markets. Only one recent issue has met with a really unqualified success namely, the London County Council 3J per cent, loan for £5,000,000. The position is such that every few millions sterling of nejv stock that is created exerts a wholly disproportionate effect. In the old days, if investors were without the ready cash necessary to subscribe to new issues of a promising and remunerative character, they applied to their bankers for loans, lodging stock as collateral. That, however, was only done when there was a substantial margin between the yield on the new securities and the price paid for the banking accommodation. At the present time there is no such margin. On the contrary, more has to be paid for loans than the new stocks yield and what formerly constituted a powerful support to the markets has been thereby removed. What has happened in the case of new creations has also happened in connection with an extensive class of business of the same kind which used to be transacted in many departments of the Stock Exchange. The banks are themselves in many instances a good deal to blame for the attenuated proportions to which transactions of this kind have shrunk, owing to their overcaution or to their excessive charges.

These, of course, are not the only circumstances which have been acting as a drag on investment business.' They merely supplement others of much older standing, and of vastly greater potency, among them being the enormous waste of capital incidental to war, apd the piling up of the burden of taxation, both imperial and municipal. Mr Asquith's Budget has certainly not helped to restore confidence. The whole scheme is regarded as redolent of socialism, and a design to harry and worry capitalists, both large and small. There is good ieason to believe that it has already led to realisations of consols 011 a large scale, and it is an open secret in London that arrangements are being made by wealthy houses to transfer large portions of* their investments to trustees abroad. This is one aspect in which the problem is being looked at just now. The point of view may change when money becomes easier and a reaction in trade sets free a large amount of resources which are now employed in business, but will later on compete in the investment market.