THE Wairarapa Age MORNING DAILY. WEDNESDAY, NOVEMBER 13, 1912 SLUMP IN NEW SOUTH WALES.

Wairarapa Age, Volume XXXI, Issue 10713, 13 November 1912, Page 4

THE Wairarapa Age MORNING DAILY. WEDNESDAY, NOVEMBER 13, 191 2 SLUMP IN NEW SOUTH WALES.

A considerable slump has been experienced in New South Wales of late, and wholesale dismissals have been made from the public works of the State. The Government attributes the position to--its-inability to Hoat a loan, owing to tho tightness of money in the London market. The Ghristehurch Press thinks that the causes of the financial stringency are more deeply-rooted than those given by the Government, and it refers to an article contributed to the London Economist by the Melbourne correspondent of that paper. In the first place, it appears that the New South Wales Government has mis- ' managed the administration of some of the existing loans. From time to time previous Governments had issued funded stock at 4, 3£, and 3 per cent., redeemable at a certain date, or subsequently at the option of the Government. Tho 4 per cent, issuo, amounting to £2,549,350, was made payable at 12 months' notice, at, and after, January 7th', 1913. Entertaining the belief that conversion could be effected at a lower rate, the Government gave tho requisite notice to redeem at the date just named. But tho market became adverse, and in August last, in order to obtain the means for redemption, tho Government was offering 4 per cent, stock at par, with h per cent, commission to brokers. At the same time tho Sydney jCity .Corporation was offering 4 per cent, debenture bonds to the public at 97J —the security being practically qwite as good as that offered by the Government, ft was found impossible to obtain the money in Sydney, and mi attempt was made to sell the Government stock at 00 in Loudon, willi what result we have not heard. Tliv liinnieipnl venture ivns erjiiallv a failure, and hence the Sydney Council is aNo curtailing its works. T!n{ the muddling finruiee of the Government has not been the only trouble. The legislation, both of the Federal Labour

Government and of the -New South Wales Labour Government has had the effect of alarming investors and of actually causing a withdrawal of private capital. A correspondent, writing to the London Statist on the Federal Land Tax, nays :—"lt has aroused deep resentment in this country, and there is now no longer the confidence of former days that the British investor is sure of just and equitable treatment in Australia, and in consequence the outflow to Australia for the past eighteen months has been practically nil, while, on the other hand, there have been heavy withdrawals of money from Australia. One company that two years ago, had ovor a hillion invested in land in Australia has since then withdrawn £BOO,OOO and invested it elsewhere where they can better rely on fair treatment." The Melbourne correspondent of the " Economist confirms this view. The growing scarcity of money free for investment, he says, "is due in part to the withdrawals of British capital that are quietly being •effected. The principal causes of these withdrawals is a distrust of the Labour Government and its antagonism to property. The banks are now generally recognising that unless demands for furthor accommodation are resisted the position will become worse, and importers are warned that their overdrafts } will not be allowed to grow."