THE Wairarapa Age MORNING DAILY. SATURDAY, NOVEMBER 2, 1912. THE N.Z. LOAN.

Wairarapa Age, Volume XXXI, Issue 10710, 2 November 1912, Page 4

THE Wairarapa Age MORNING DAILY. SATURDAY, NOER B M VE 2, 1912. THE N.Z. LOAN.

It does not follow that, because the Government is asking for authority to raise a loan of £1,750,000, it is proposed to go upon the money market immediately for that amount. Indeed, in the present condition of the Continental finances, it would be the •height of folly to approach" the London market. It may be possible to raise a certain amount of the money required locally, or in Australia, but the Minister of Finance will probably find that he will have to pay dearly for it here, Referring to the effect of the Balkan war upon the money mar* 'ket, the Mercantile Gazette says:— "Over a milion men ilh the affected districts are now under arms, andto maintain these men in the field will cost a great dea lof money. True, the feeding of the men will not be a troublesome affair, nor will their pay matter much, because both can be met by the issue of paper currency. Whatever the belligerent States can themselves find can be paid for with paper and as a moratorium is declared the question of finance within the States is not a difficult matter, but when it comes to obtaining arms i and ammunition, and other war 'material, hard cash will be required, and there is where the difficulty will rise. Greece claims to have largo credit balances sufficient for immediate requirements, and Bulgaria J has certain credits in Paris, but these sums in tho aggregate are trifling to what will bo required to prosecute tho war. Fortunately or unfortunately, the Balkan are great producers of wheat, and this cereal communis a ready market. In Great Britain and the North of Europe the wheat crops have failed and large imports will be necessary. But the waterways, the Dardanelles ,iril] bo closed to th© Danubian grain traffic, and unless transport facilities are available on the European railways, felio price of wVeat must tardea fee-.

I cause an important source of supply !is cut out. Furthermore, if tho war continue for any length of time, it will prevent the planting of wheat i'or the next bea-sou :>ml a year hence the cereal may b« dourer tbaii it i> | j to-day. The trade of Liverpool and .Manchester is said to be severely ;UJfected, and the measure of this has j yet to bo ascertained. In any o.i*e I the war is found to have a far-reaching i effect on trade. Now, as to the money markot, apart from any war demands, | tho needs of commerce were sufficient- j ly pronounced to warrant the belief ] that the supply of credit would be ] insufficient to meet such demands, I and the new demands likely to arise I out of the war makes the position ex- J tremely dangerous. None of the Eu- j ropean countries with the exception of | England and Franco canafford to lond money in the present condition of affairs. The French Government am exercise, a. close supervisjoju and prevent money being spent, but with Great Britain, such a thing is impossible. It is the country where loans are easier obtained, provided the security is adequate, and the pressure on London is therefore bound >.to be great. The Bank of England, in selfdefence, must advance its discount rate, and therefore it, would .not be surprising to see Bank raies at 6 per cent or even 7 per cent.. Dear money in England will have a "far-reacbing effect—it will be felt in New Zealand as in other parts of the world, and in view of this,, a,nd the general uncertainty arising out of war, it is desirable to exercise caution, and to keep commitments and obligations well within bounds.