COMMERCIAL REVIEW

Dominion, Volume 14, Issue 173, 18 April 1921, Page 5

COMMERCIAL REVIEW

EFFECT OF LABOUR TROUBLES ON STOCK EXCHANGE

LOWER BANKRATE PREDICTED IMPROVED PROSPECTS IN WOOL TRADE ®r TeJegranh- Prcsi Aasooiatlon-OoprrlffM (Rec. April 17, 5.5 p.m.) London, April 16. Under the influence of the threatened strike, business on tho Stock Exchange has been most dull, but there has been no pressure to sell nor a serious decline even in raiway and industrial stocks, though naturally the tendency has been downward. What money is coming into the Stock Exchange for investment is seeking channels outside those affected by Home Labour troubles, hence the noi ticoably improved prices in many foreign Government and municipal bonds, colonial and foreign banking shares, and the steadiness of colonial Government bonds. General satisfaction is expressed on the money market at the Government’s reversion to the old plan of tendering for Treasury bills, of which fifty millions will bo offered on Thursday. The new departure is regarded as virtually meaning the decontrol of the money market by the Treasury, and a step towards a freer market in money. Tho announcement is taken as another step towards a reduction of the bank rate, which many business men have been urging for a long time, and which many banks now favour. The general impression is that it will be reduced directly the present crisis is over. The "Wine Trade Review” anticipates that tho Budget will remove the ad valorem duty on sparkling wines, to be replaced by taxation on a sensible basis. Tho ad valorem duty has been an absolute failure from the point of view of revenue, and has done enormous injury to the wine trade with France and other countries. The Butter Market. The prices of Government stocks of first and second grade Australian butter have been raised 6s. per cwt. The New Zealand is unchanged, and Argentina has been lowered *s. Traders anticipate that business will be slow in the immediate future, as retailers mostly bought largely early in the month in anticipation of a strike. Wool Business Healthier. A well-informed authority in the wool trade considers that though the immediate outlook is menaced by the industrial strife, which threatens to strangle the business, there is no doubt that the real state of the wool business is gradually becoming healthier, and the undercurrent of influence making for improvement will gather force and ultimately lead to recovery. Stocks of merinos and fine crossbreds tops at Bradford are very low. A gradual liquidation is proceeding in every section of the trade, and with the removal of the old high-priced goods the way is being cleared for. a replacement on safer levels. Financial difficulties are being readjusted after the disorganisation and anxiety caused by the sudden drop in values and the settlement of the excess profits duty accounts. New the-costs of production and freights are gradually decreasing, and there are signs of easier financial conditions. The progress of all these factors has been slow, but the general trend is towards relief.

Poor Demand for Metals.

The metal Markets, under the influence of the stiWe menace, are nearly at a standstill. The few transactions takin<r place, are no real criterion of trade conditions. Only the fact that prices are cheap has prevented a further decline in demand by consumers. Im and copper are at a very low ebb, but the reopening of several tin plate works gives promise of expansion if labour permits. —Aus.-N.Z. Cable Assn.--• .