THE MONEY MARKET.

Wairarapa Age, Volume XXXI, Issue 9163, 11 August 1908, Page 5

THE MONEY MARKET.

Local bodies seeking 1.0 float loans on the local market are (says a Duredin paper) beginning to realise that there is a tightness of money. A case in point occurred only last vve.ek in Dunedin. Enquiries into th° cause seemed to point to ths faut that the present scarcity of money is r t likely to be vary long-lived unles* some factors which do not at present * affect the problem mnko ay appear* ance. According to o'te firm of brokers, there is no lack rf money awaiting investment. They find no difficulty in placing shares in ordinary trading concerns so long as the security is considered goxl; lut people have been getting good rotps of interest on mortgages, and in this class of security the market shov 3 a hardening tendency. That bthg so, theyare loth to accept the lower rate of interest offered on debenture issues. As an instance, our informant pointed out the fact that the Westport Harbour Board is endeavouring to obtain the sanction of Parliament to an increase in the rate of interest on their £ WO, 000 loan from 4J per cent, to 5 per cent. It is not the nature of ine security which hampers the flotation of the loan, for there is a Government guarantee, but simply the fact that, being able to get 5 per cent., on other investments, people are not satisfied to accept 4J per cent. The probability is that a number who are holding back at present will have to come into the market before long, to invest their funds, and . with money thu-j in better supply the market will, ease, and the rate of interest tend downwards. The present tightness of money wa3 attributed to the curtailed returns from our wool export and the check that has recently been given to speculation in land and property, in the North Island especially, besides the cause before mentioned. In support of their belief that the market will ease, they point to the altered conditions at Home. During last year an excessive amount of trade was being done at Home, which had a tendency to draw money from investment stocks. In fact, it was believed by some Home papers that there was not enough loose money to satisfy the Dominion's demand" for business purposes. Now, however, the Old Country's trade is beginning to decrease, and more attention is being paid to Stock Exchange matters, with the result that money is being set free for outside investment. Any deduction as regards New Zealand affairs that can be drawn from this is that it will tend to eass tne local money market.