FINANCE AND COMMERCE.

Press, Volume LXVI, Issue 20091, 21 November 1930, Page 12

FINANCE AND COMMERCE.

THE WORLD'S GOLD.

STEADILY DECREASING. Toe ielation of currency to the economic problems of the present time particular interest to the agings of a committee appointed under the direction of the League of Nations. This committee, known as the gold delegation, has just issued a document dealfnc with the world' 6 gold production. It shows that a serious fall is anticipated. The present total production is £3l 000,000, and it is computed thac will decline to £62,500,000 in 1940. South Africa's gold output « expected to fall from £42,310,000 to £«4.S_l,POO The United States of America s production is expected to decline from £? 560,000 to £7.220,000, with smaller reductions in Australia and India. Indeed, only Canada is expected to raise Uer output. The report says that the tneoretical possibility of a wide price variatioa influencing the output of gold should not be overlooked, but that the evidence seems to indicate that the gold production is remarkably insensitive to moderate changes in the price level. ■' The gold reserves of banks of isjue and treasuries," the report says, ••at the end of 192S amounted to about £2 007,000,000, to which must be added a 'further sum, estimated at about £183.000,000, representing gold in cirr illation in a few countries, gold in i onimercial banks, and hoarded coins, etc., outside Asia, a. total therefore of £2,190,000,000. Of the £133,000,000, £7y,000,000 lay in the United States, and we consider it probable that a considerable part at any rate of this latter sum is permanently Ic3t for effective monetary purposes." The provisional figures at the end •■>£ T929 showed an increase of £ J0,000,000 .a the total gold stocks. Shortage in I&S4. Ihe report states that it is not safe i o anticipate any material reduction in the demand for many years to come, and add» that the supply of new gold available for monetary purposes will be inadequate by 1934, unless measures are taken to alleviato the situation in time.

Although the demand for gold for monetary purposes has received a temporary check owing to the economic depression, the evidence points conclusively to the prospect of a serious situation arising when trade revives unless measures to alleviate it are taken in time.

The report estimates that the gold production for 1930 will amount to £30,800,000, and that production will decline every year to £74,000,000 in 1940. Unless new and unexpected sources of supply are discovered the decline in output is likely to continue at an accelerated rate after 1940, as the South African mines, which account for oyer half the present production, become gradually exhausted. The report alludes to the possibility of China employing gold for currency pnrpo3eß owing to the silver situation. The report eaye that one cannot shut one's eyes to fact that the question e£ the most effective distribution of gold i« likely to become of steadily increasing iroportai;eF as-, future supplies of gold become smaller. Suggested Remedies. The probable trend of future prices -mast occasion some anxiety, but remedial measures can be found which should at least during the next decade correct tho consequences feared. The report welcomes the discontinuance of gold coin for domestic currency, and expresses the view that this course has not in any way weakened general credit of the countries concerned. It expresses hopes for the concentration of monetary gold in the reserves of the central banks, ;ind that its limitation as a means of payment to international transactions may shortly become general. The opinion is stated that the minimum legal gold cover against notes is largely based upon traditional and conventional grounds, and if the current accepted minima were reduced a considerable economy of gold could be effected without in any way weakening the general credit structure, although such action would require international agreement, but the difficulties, in the way of which should not be insuperable. • The extended use of cheques and the replacing of banknotes of small denominations by subsidiary coins are suggested. Sound Currency Policy. The situation, the report continued, ealls for a concerted and sound currency policy prudently pursued, and it advocates the adoption of the gold standard by countries which have not yet stabilised their currency. In conclusion, all countries employing the gold exchange standard are urged to give serious consideration to the consequences resulting from the conversion of existing assets reserves into gold on any considerable scale.

Replying to the criticism that the extension of the gold exchange system, if improperly applied, involves the risk of inflation, it declares that the danger would be largely obviated if the foreign assets reserves were generally concentrated in the central banks.

Last, the report declares, it -will do much to establish complete confidence in the Bystem if an international understanding is reached whereby the reserves which countries hold, abroad for the maintenance of their currencies should not be subject to seizure and confiscation in time of war. TIMBER OUTPUT. REDUCTION FAVOURED. ''i\*LJ3SS 'ASSOCIATION IXLIGBAJiC.; HAMILTON, November 20. Ac a full meeting of members of the Sawmillers' Timber Trading Company, held at Hamilton yesterday, the following resolutions were adopted with a view to reducing the output of mills, which for many months has been largely in excess of sales:

That m view of the present limited demand for timber it be a recommenoation to members to reduce production to at least 40 per cent, of their Jissessment, either by further reducing working hours per week or by other means so as not to exceed 40 per cent. their assessed cutting capacity.'f . 'That in_ view of the recent reduction in prices it be a recommendation to members that as fal - as practicable wages should not exceed the r&tes fixed by the award and that the wages of weekly men be reduced proportionately " OXFORD MARKET. , ► live «toefc *.t the Oxford market yesterday. Prices were:—Fat ewes 14s 6d to 16» 9d. ewe hoggets 16s, two-tooth -wethers 12 ». ewes sod !«mb« llg 2d to 12s Bd. J* V. p f nE - dair y cows ®ade from 7 10 " to £l2, store cows £i to £5, three »te«« »t £7 17, 6d cich, three10s To £? eCr yearling heiiera £2 We»ner sold M 32i to S0»,

DAIRY PRODUCE,

EXPORTS TO BRITAIN. [THE PRESS Special Serrtce.J AUCKLAND, November 20. Owing to Canada's tariff against New Zealand butter, exports to that Dominion have almost ceased. The Niagara, which left for Vancouver on Tuesday, for tho first time many voyages, carried no butter for Canada. The only shipment on board was a consignment of 1700 boxes for Honolulu. Heavy consignments have been made to the United Kintrdom. Tho Herbford was dispatched last evening with 46,000 boxes of butter, and 10,000 crates of cheese from Auckland for the United Kingdom. Her total allotment comprised 75..000 boxes o butter and 36,000 crates or cheeses. The Mahana left to-dav. after having loaded -io.oCO hoses of butter at this port. She will complete h°r Io;id ug at Wellington, sailing finally iron there next, Thursday v.-iUi OO.UW boxes of butter and 2-8,000 crates ot ciIC€SG. During December shipments of dairy produce will be dispatched at intervals of less than a week until Christmas. The allotments for the tfhol© ot tho Dominion in five vessels to sail Ivetween December 3rd and December 23rd. total 376.000 boxes of butter and 116.100 crates of cheese. Of these quantities arrangements nave been made to lift 242.500 boxes oi butter and 25,500 crates of cheese from Auckland.

REQUEST TO -BOARD

iPEES* iSSOCIATIOS; Tit PALMEPvSTON N., November 20. The Dairy Farmers' Union to-day decided to write the Dairy Produce Hoard suggesting that tho levy on factories be not collected this . ln view of the depression in the industry. DAIRY PAY-OUT. ADVANCE OF 9i& PER LB. The New Zealand Co-operative Dairy Company (Auckland), much the biggest concern of its kind in the Dominion, and which handles approximately 30 per cent, of the exportable dairy produce of the Dominion, has decided to make an advance payment of 91d per lb to suppliers of butterfat for birtter making, and Is per lb for butterTnt for cheese making. Those prices are for superfine quality supplied in October.

The Kev Zealand Loan and Hercaoti'e Agency, Ltd., Christchurch, have received a cablesrr ara from their London office, giving tho following information, under dote 19th Butter —Kev; season's 108s, 110s. Very slow. Market is quiet. Cheese—White 71b to 725, coloured G9e to 69». Market ia quiet. STANDARDISED" CHEESE. LETTER TO MINISTER.

The secretary of the South Island Dairy Association has written to the Minister for Agriculture asking for his support in their :erideavour to stop the further export of New Zealand "standardised" cheese. A paragraph in the letter runs:— _

"We feel certain the Prime Minister will confirm tbo overwhelming mass of evidence from other sources that '.standardised' cheese is seriously damaging the goodwill of 'the British pubhe towards New Zealand produce, and we would again strongly urge you, eir, in the national interests, to take immediate steps to prohibit the export of cheese made from other than whole milk. The longer this is delayed the more damaging will bo tho effects and even if it can be proved that it is possible to make cheese from partlyskimmed milk of an equal quality to the fuil-cream, the fact that our overseas customers are strongly prejudiced against the 'standardised' article should bo sufficient to make us realise the folly of persisting to send them a product' which they do not want.' 1 NEW ZEALAND BUTTER IN CANADA. HEAVY IMPORTATIONS. PRESS ASSOCIATION —BI SL.ECIISIC TELioaApa—copraioHT.) VANCOUVER,, November 19A message from Victoria (British Columbia) states that the butter market is depressed far below the cost of production, according to opinions expressed at a meeting of the Advisory Board of the Farmers' Institutes of the province. The demoralisation is said to be attributable substantially to the Australian treaty, a secondary factor of great and immediate importance being- the recent enormous importation from NewZealand. It is stated 4hat huge shipments of New Zealand butter are now in cold store in the province, awaiting release the moment prices show signs of recovery. Mncb butter bad entered Canada on consignment to brokers, to sell at the best' prices obtainable; and, by virtue of the absence of a stated _ price, did' not come within the provisions of the anti-dumping clause. A resolution was passed asking the Minister for Trade and Commerce (Mr H. H. Stevens) to take immediate steps to protect the dairy, sheep, and. allied industries from further demoralisation. t ! STUDHOLME STOCK SALE. There teas a slack demand at the Studholaie stock sale yesterday, the present feed shortage being responsible for this. The yarding of sheep consisted of a pen of ewes and lambs and a pen of hoggets, tho latter being passed in. The cattle entry was large, but the demand was not good, and prices declined. The following prices were realised: — Fat Cattle —Cows at £ll 10s, £ll, £9 15s, £8 10s, £6 15s; heifers at £7, £8 10s, £-1 15s; steer £ll 10s.

Other Cattle —qpws £1 ss, springing cow 3 £4 and £2 12s 6d, steers £4 13s 6d, £3 2s 6d, £3, £2 15s, heifers £3 2s 6d, £1 17s 6d, £2 15«, .£1 14s 6d, dairy cows £6 10s to £7 ss, bulls £3 5a and £2 ss. EGMONT SHOW- . (raKSS AfiftOCIATIOV TXLEG&AH.) HAWERA, November 20. The Egmont Spring 1 Show vsa concluded to-day in ccrlG, squally weather, before a smaller attendance than on People'B C-ay last year. The principal championship awards were:—Clydesdalfe—Entire: Mooro, Hunter Estate (Hawers) and reserve. Thoroughbred Entire—J. Bryant'a (Ha* •were) Sandstar. Egmont Horse Jumping: ChampionshipMiss M. H. Stewart's (Halcombe) Gentleraan Jack, 1; J. Goodwin'# (OhingnHi) Mataroa, 2: Hisa M. Cole'a (Motunui) Huirangi Girl, 3. The champion Clydesdale mare wan the Moore, Hunter's estate Zobieda, not Cocotine, »3 announced yesterday*