FINANCE AND TRADE.

Wairarapa Daily Times, Volume XVI, Issue 5096, 6 August 1895, Page 3

FINANCE AND TRADE.

(Specially compiled tor tlio 1 Walrampi Dally TimcV A I'OOI, 01! A I'UDDIiE. Tho loading item for tho past week in all circles has been the " Botcliy Budget" of the Colonial Treasurer and the light that will bo thrown upon it during the debato this week will&how where the pools or monopolies como in, and where the puddles of bad financing exist. It is impossible to mora than glance at one or two of-tlio features presented by the Budget, but before touching upon these it may not be out of place to congratulate the Hon. J. G, Ward on tho excellent manner in which lie has padded with interest a dismal story, and the number of incongruities that arc compressed into so important a document as the .Financial Statement. The Budget, however, is meant to catch every hreezoaud its shortcomings must be judged accordingly, A CORXBIt IX CONSOLS. Tho New Zealand Consols account as oxhibited in the Budget, is comical, to say tlio least of it. Thero are 20 holders who have subscribed for £158,025, but of this, the Bank of New Zealand corners £150,000, so that nineteen venturesomo individuals have actually invested £8025 iu New Zealand consols, not a very great exhibition of thrift. There is not the same mad rush iu tho Colonies for this very select class of gilt-edged securities, at any rate 3| per cent, per annum, from the Government, is not sufficiently tempting when firstclass mortgages can be obtained at 5 percent, and over. The inscription of consols in the Colony, will never bo a great success with the people, firstly because of tho absence of that class who indulge in "oldstocking " investments, secondly becauso tho market forconsols is uncertain, and realisation cannot beell'ccted within a reasonable time, and thirdly because the Post Office Savings Bank offers greater facilities and a bettor rate of interest for the thrifty classes of the community. How the Colonial Treasurer expects to see heavy subscriptions for Consols r.t 85 per cent for a fixed period of 14 years, when i per cent, at call can he obtained at the Savings Bank, is one of those mysterious financial freaks that cannot bo understood by the ordinary individual. BRILLIANT BANKIXI!. The gamo of battledore and shuttlecock that has been played by the Bank of New Zealand, the Colonial Bank and the Colonial Treasurer, with the £150,000 Consols shows clearly to what a state of perfection banking lias been brought in New Zealand. The Bank of New Zealand Ims invested £150,000 in N.Z. Consuls, and Ims obtained this sum from the second guaranteed million. To understand the brilliancy and the peculiarity of the transaction, it is necessary to bear in mind that the Bank is payiig interest 011 the guaranteed two millions at tke rate of 4 per cent, pw annum, while tlio return on this investment in Consols is !ij per cent, only, a loss to the Bank of 10s per cent, or £750 per annum. Further, the guaranteed millions are repayable 011 the 19th July, 1901, while this Consols investment is for 14 years, or until 1909. The Bank has to pay the London money-lender this £150,000 in 190-i, and cannot get it back from the N.Z. Government until 11)09, and we are to accept all this as first-class business The money obtained from the Bank of New Zealand was deposited with the Colonial Bank at 4 per cent. When this deposit was made the Colony owed the Colonial Bank £IOO,OOO, which did not mature

until a few months after the deposit of £150,000 was made. Notwithstanding the indebtedness of tlio Treasury to the Colonial Bank, this monetary institution apparently gladly accepted tho deposit at a higher rate of interest than it was receiving for its loan to the Government. It may be correct banking, and strictly legal, but scarcely business-like, and the pablic will not fail to see how very thin and emaciated the transaction looks. Let us put the matter in this light, A. owes X. £IOO, which has to bo paid in October next, but A. becomes flush of cash and goes to X. with £l5O, and offers to lend him the money for 2 years at a greater rate of interest than he is paying for the £IOO, Under ordinary circumstances, or rather I should say in every day commercial life, X. would smilo at such request, but would no doubt be agreeable to accept the £l5O from A., but, setting tbo debt of £IOO against the amount, and paying in reality only for the surplus of £SO. But the Colonial Bank lias worked upon another system, sud is paying tho Government 4 per cent on £150,003, while it receives only 3J per cent for its loan of £IOO,OOO to the Treasury, As far as the Colony is concerned it is a splendid transaction, for we are making £750 per annum by this simple transaction in Consols, Wo have popped in between two banking institutions and make an excellent profit, but tho two banks should apply for tho patent rights for such unique and brilliant banking tactics. Possibly there is nothing in this deal of Consols beyond what is disclosed,but thepeculiarunbusinesslike mode in which it has been carried through,will set men a thinking who will draw their own inferences as to tho why and wherefore.

TWO TICKLING THINGS

Conversion is ono of them, ami in the Budget the Colonial Treasuroi, spreads himself out in a catchy paragraph. The substance of it is that it lias occurred to him (possibly in a dream) whether a scheme could not be formulated whereby the addition to our debt, arising from further conversion operations, could not be so provided for as to prevent such incrcaso becoming n permanent addition to tho public debt, This is possibly the result of Mr Ward's enquiries in London, and the matter will no doubt be kept steadily in view, but in the meantime it serves as a feather for tickling the ears of the public ass. Tho other brilliant but illusivo idea which has given] the Hon. Joseph much concern, is j the extinguishment of our public debt. The proposal looks extremely patriotic on paper, and will serve as ' fino fodder for tho donkeys in tho W Labour Party, but to apply it, in any! / shape or form, will be quite a different thing. THE TARIFF. Protection, remissions in favour of manufacturers, remissions in favour of the working-classes, revenue, and extra taxation of luxuries, are t'.ie ostensible reasons for the production of the Customs Tariff, which came into force last Wednesday morning. It will be noted that no consideration has been extended to ihe producers, their

needs lnvo not influenced tlio tariff, although it must bo conceded that tho remission of tlio duty on wool packs, butter paper, tubular wovon cloth used for meat wraps and wooden handles for tools, will, to a certain extent, help tho agriculturalists and pastoralists, but tho good so obtained is minimised by tho higher cost of living, that must bo tlio result of tlio protectionist olement in tho Tariff. The Budget opens with tlio statement that the great, reduction in the spending power of the people is duo to the low prices obtained for our staple products, and this restriction is to be intensified by making the cost of living higher. America is generally or rather invariably trotted out when protection needs :i pedestal, and it is therefore interesting to learn that a Committee of the House of Representatives recently appointed to enquire into tlio agricultural depression in tho United Slates reported "That so long as tho present unjust and uneqmil system of protection continues agriculture should receive its just proportion, and as this cannot be secured by a protective tariff, a bounty on oxported agricultural staples should he allowed " and this conclusion is reasonable and fair, If it is fair to encourage the manufacture of boots and shoes in the Colony by a protective tariff, is it not fair also to encourage the meat freezing industry by a bounty 011 the export trade ? and why should not the saiuo encouragement be given to tho butter factories and cheese factories ? Protectionists should cany out their fad to its logical conclusion and apply it as between tho two islands, If it is 1 iglit that the bootmakers of New Zealand should be protected against the competition of the boot-makers of Australia why should not the llotirmillers of the North Island be protected against the competition of the flourmillers of Canterbury. Why not have protection all round and savo Masterton tradesmen from the competition of Wellington houses. The Tarilf, as propounded by the Liberal-Labour Parly, is a magnificent cloak for monopolies, and the "pore workin'man" will find it out before long. It is throwing dust 111 the eyes of the labourers to say that remissions in favour of the working-classes liavo influenced the Tariff. The debate this weekwill lay bare many sore places, and time will prove its rottenness. Industries that were fostered by the protective Tarilf of 18SS have hadniore protection thrust upon them, and when the Tarilf is again revised they will need more, because the foundation upon which they are built-up is unreal and unstable. JIKAT KXI'OIiT COMI'ASY. The Sixth Annual Meeting of the Wellington Meat Export Company will be held on the 27th insfc., and the report of the directors to be presented at the meeting is as follows:—" The directors are glad to report that notwithstanding the disastrous prices which have ruled in the English frozen meat market for some months past, the result of the past year's work is 011 the whole satisfactory. After writing off £180(114s from buildings, and machinery and adding ,-GlyOO to the reserve fund and a further £IOO to the insurance reserve , there remains to the credit of profit , and loss account £305515s (3d, from ; which it is proposed to pay a dividend of (i pr.rcent. This will absorb £29(jfi '2s 2d and leaves £59 13s 4d to cany forward. The whole of the company's buildings and plant have | been maintained in the highest state . of efficiency, and were fully occupied , during the busy part of the past I season. The quantity of stock dealt 1 with during the season was consider- 1 ably in excess of the prcviousyear's work." Thereport is decidedly good, when it is borne in mind that the past season has been a bad one all round. , The excellent report was not unexpected, as for some weeks past, the shares have been in steady demand, and advanced in price from £2 15s to £3 10s for the £5 paid-up shares. With the bettor prospects of a revival of trade and a hardening | of prices, the shares in I his Company should rise, and I should noi be surprised to sec them at par this time next year. MOCKS. Last week all stocks recorded 1 a violent drop, and I was in hopes that the period of inflated prices for gilt-edged securities had come to an end, but the recovery this week, though in most cases not equal to the drop, knocks out the idea for a time, The gradual return of confidence which will now gain in volume as time pioceeds, and which is stimulated by a change of Government in England, will cause all the high-class securities, which have been advanced in price by I the operations of timid people anxious for safe investments to recede to their proper level. When New Zealand per cents get back to OS or 99 we may expect to see trade in a better state. Tho tendency, how- ■ ever for Colonial stocks is to recede but their downward carnr will be gradual and almost imperceptible. I British 2f per cent Consols (Goschen's;are<[uotedatlo7and have not I recovered the drop of 10s recorded last week. In Colonial Govoi.imont 4 per | cents,, three denominations have advanced, but the rise except in tho 1 case of West Australia is not equal 1 to the decline of last week. Victoria shows a further fall of 355, thus | recording a decline of 65s in two weeks. Queensland as compared with a fortnight ago have dropped 355, Tlio table of comparison is as follows July Aug, Move25tl>, Int. meat, New Zealand... 1939 110} 111? Ri:e2oi : N.S, Wales ... 1933 11-!} USJ Riseloi ■ Victoria .. 1020 life 105 Fall Cos S. Australia ... 1936 1101 110| Queensland ... 192-I 110) 110 Fall 5i ■ W. Australia ... 1931 118. J. 120 RitoSOs In the per cent, stocks, there is an ull-round advance, hut tlio riso does not equal tho drop of last week, in a single instance. The compara- 1 tive statement is as follows July An 1 ;. .Move25tli. Ist. ment, . Now Zealand ... 1010 101 lor. Kite 20s N.S. Wales ... 1921 ltJl 107} Iliso2oa Victoria .. 1923 Oil} II )J li'sc2ss 8. Australia ... 1930 101 105 Rise 20s Qu'ensland ... 1021 105J 1011 Rito 15s 'ltomania ... 11M0 101 10-!"j Rise lib PEIICT PEXLYN.