MONETARY PROSPECTS.
Apart from the effect upon Government and other securities; it seems a little doubtful whether the country is benefiting on balance by the extreme ease in money rates here, and especially by the fact that the value of money is so greatly below that of every other centre, including New York. Admittedly these conditions have done something to aid the Government in its loans on Treasury Bills, but they certainly have done little to stimulate trade activity ; and the point to remember is that if they should lead to unsound conditions, either on tire Stock Exchange or through our granting credits too freely abroad, trade, when it revives, is sure to be penalised by the too rapid rise in money rates which frequently follows a period of unduly prolonged ease. During the coming month the Money Market will no doubt be somewhat affected by the ingathering of the second instalment of the Income Tax revenue, and it would not be surprising if rates were to harden. It looks, in fact, very much as though the climax of monetary case might have been reached, and I am disposed to look for a generally higher level of money rates during the second half of the year and to anticipate that the advance
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