THE IMMEDIATE PROSPECTS.

Wairarapa Age, Volume XXXII, Issue 3104, 29 January 1909, Page 5

THE IMMEDIATE PROSPECTS.

NOT VERY BRIGHT. A STRAIGHT TALK. r .h n "Mercantile Gazette," in its irsnt ,A the 27th inst., comments veiy pertinently on the financial condition of the country as follows: "The immediate prospects are not • very bright, and by immediate we s mean say the next six months. We see nothing in the prevailing condi-tion-that makes for improvement. The whole of the primary products of New Zealand are at low levels in the markets of the world. There are exceptions, and these are butter and cheese, which are selling at fair prices. But with respect to these two products it must not be overlooked that the dealers and speculators are losing money, and such of the factor—ies as accepted the market risks are making less than the others who sold outright to dealers. As a matter of fact the market for dairy produce is lower than it was a year ago. Wool is making better money than it did a few months ago, but this does not mean much. There were very heavy reclamations to be met on the dipt of 1907 and the increased price now being realised will j'ust about meet this deficit, and the woolgrowers will have no surplus to spend. A very [important industry, and one that absorbs a considerable amount of unskilled labour, is in a parlous condition. We refer to the hemp milling industry. The presett London quotations are wholly unprofitable, except to a few millers who are favourably circumstanced. This industry has been paralysed' by two severe blows —low prices and high cost of production, and the in-, genuity of those interested in the industry does ndt appear to be equal in finding a remedy. On market quotations, the primary produce should make less money than a year ago, but fortunately the climatic conditions have been favourable for an increased production, consequently we inav safely look forward to se slightly larger income when the, produce year closes on Seotember 30th. But a moderate expansion in the aggregate value of the exports will not be sufficient to bring about a recovery. Tha imports must shrink, and while the quarterly figures show that the shrinkage has begun, it will be some time before the volume is reduced to the point where equilibrium betwesn exports and imports is restored. The demand of the moment is for money, and borrowers with really , good sound securities to pledge are as plentiful as blackberries. There is net the money to meet all the demands, and there won't be for a very long time. Many people ars blaming the banks for not doing more than they are doing, and lastances are freely quoted of this ore and that one offering very ample margin in real estate securities for very small loans, all of which are being turned down by the banks, "The banks won't lend money" js the cry, and at street corners ore hears of many schemes of WDnld-be*. financiers to alter the conditions, Alf these grumblers and disappointed '' people overlook the fact that the banks cannot. land whs* they do not" - po&ama. The banks have Lx-en very aeommodating indeed, and they have lent to the full extent of their resources. They cannot do more, without endangering tneir position. The Advances to Settlers Office is alfo doing all it possibly can to meet tie ; demands of borrowers, but that does ' r.ot amount to much. This scarcity of money is hanging up work of all kinds, consequently unempbynent is increasing, trade is languishing, and the call for economy is very strong. Obviously then we want more money, and the question is where can this money be obtained. The banks, as we have already stated, are lending up to the full extent of their reserves, insurance companies have not much available, and those doing an intercolonial business are able to obtain excellent investments in the States of the Commonwealth. The Government has authority to a million or more, but tha Government has not yet approached the London market. Some of the municipalities and Harbour Boards have gone to London for supplies, and have been successful, but the totals so obtained are trifling, compared to what is really wanted, fhere does not seem any likelihood of any considerable quantity of money being obtained from outside, consequently the existing tightness must continue, and the effects will be worse than they are. The Government is looking about for ways and means for curtailing expenditure, and already a start has been made with the Railway Department. Economy in the public service is essential, and has been admitted by the Prime Minister, There must be economy also in ... private businesses, and that will mean dismissal of workers. The prospects lor the immediate future are therefore not very good, and many people are convinced that the coming winter will prove a very trying one for New .Zealand. With care and economy the bad effects would be minimised, but economy seems a difficult thing for the people to practice."