THE FINANCIAL OUTLOOK.

Wanganui Chronicle, Volume XLIX, Issue 12629, 17 October 1905, Page 4

THE FINANCIAL OUTLOOK.

The article en the " Financial Outlook " in the " Fortnightly Review ". - will be read-with much gratification by Colonial Treasurers 'and others, indicating, as it does, that the period of weakness and neglect with, regard to colonial loans and other gilt-edged securiuos is coming to an end. The h'gh water mark prices of the.later inner ies wtve prices, as we are told, of a pvrlf>d of plethora of money and long years of peace, which r>ay nor rociir for some time; and the South-Afrijsn \nr t with its enormous expenditmc r<-voliuw.n-isedtlio market. A flow of go: d equal to -albout £20,000,000 per ann-nn was stopped, and Government loans were issued to a larger extent than the public could absorb. The colonies and the English municipalities unfortunately took little heed of these altered conditions, and they soon found that loans hiad become practically impossible, whale ' British Consols and all gilt-edged secu- - ritips suffered materially. But why has" ) not the expected revival of the " gilt- , / ■sdged " clasis followed, the conclusion of peace? Tlie situation is absolutely unprecedented. Stilly we are assurred, the African war is themost important factor. During dts later -half that struggle was financed with foreign money, by meant, of short-dated obligations. When poace came it was naturally expected that the rates of those .securities would' be lowered, and immediately the attempt was made to reduce the interest the foreigner began to call his money back ButI,'1,' as it could not ; be paid back alt at once, rates had to be kept high, in order to retain the : •. foreigners' money. But that state of things lias happily ended; to-day it is .< \ pretty evident that " England has" cleaned her slate." She is once more ''" accumulating her homo funds. The, '* banking deposits at the end of Juiie v exceeded last year's by £23,000,000, and •: in July there was an additional gain of

£5,000,000. This growth will only have to continue a little longer, and the banks will have to look about them again for investments." Then will come the turning point in the "gilt-edged market," and at is not difficult to forecase the result — a general rise in "giltedged" securities. In view ■»£ Australia's approaching redemption loans this forecast of the future is cheering.