MONEY AND MARKETS

Dominion, Volume 14, Issue 7, 4 October 1920, Page 5

MONEY AND MARKETS

POSSIBLE ADVANCE IN BANK RATE

THE WOOL OUTLOOK (By Teloeraph-Presi Association-Copyright (Rec. October 3, 11.5 p.m.) London, October 2. Humours have been current regarding a possible advance in the bank rate as during October nearly 488 millions in Treasury bills will fall due. If the sales of Treasury bills continue on tho same small soale as in September, the' Government may lie forced to borrow so largely on ways and means that the raising of the bank rate may be necessary, as it was'in April, but it is expected l by. the banks that the money- market will be so well supplied with funds that probably tho maturing Treasury bills will be renewed in sufficient amounts to obviate ihoneed of raising the bank rate. Business .on tho Stock Exchange has been affected by the Irish troubles, fears of a coal strike, and the bank rate rumours, but was Iteadicr at the close, and fairly firm. 'Several colonial stocks have cased scmewhat on the expectation of new loans in the near future.

All the metal markets have been disturbed by uncertainty regarding the coal situation. The decline in ' copper is mainly due to fear that tho American prico of electrolytic will be further reduced, probably causing a further setback. Business in spelter is being done on a small ecale. Norway and Germany are holding for higher prices, and Belgium's offers here are not producing business. Makers threaten to shut) down unless prices reaoh a remunerative level. Commenting on tho wool outlook, Messrs. H. Damson and Company state that the ohief feature of tho situation is the adoption of a determined hand-to-mouth policy, and the postponement of operations until a greator assurance of a stable basis has 'been reached. The small existing dcttnand is due to machinery requirements, chiefly Continental, for longi haired merinos. There will be an increasing demand.shortly in order to keep the machinery employed, but the general feeling is that the improved turnover will be on a lower basis. .Tho Bradford market is practically stagnant. The causes of the stagnation, come from both ends of the traao. There is a heavy accumulation of pieco goods, mostly produced at the highest level of values, and even where cancellations are disallowed, deliveries aro being postponed-indefinite-ly, to the serious dislocation of finance. Messrs. Dawson and Co. continue: "On the other hand, there has been since April a remarkable transition from scarcity t» a surplus of raw material in almost every 01f\69 of wool. The position i 8 aggravated by the knowledge of accumulated stocks in the United States, Buenos Aires, and South Africa. lb is r.o exaggeration to say that confidence ii broken. The main things to be hoped for are a clearance, df old and manufactured goods, and a machinery hunger for raw wool. It seems that it must shortly bo necessary to readjust values of raw material and the costs of production. Selling margins aro lower, aud a more stable basis of values seems to be within early reach; indeed,' thero is a growing fcoling that somo of tho cheaper crossbred? aro beginning to bo attractive, and will create their own de-mand."—Aus.-N.Z. Cable Assn.