BRITISH TRADE REVIEW

Dominion, Volume 21, Issue 116, 14 February 1928, Page 9

BRITISH TRADE REVIEW

UPWARD TENDENCY OF PRICE OF MONEY CAUSES WEAKNESS IN STOCKS AND SHARES DOMINION ISSUES STEADY Loans and shares have shown some weakness on the London Stock Exchange, as a result of the upward tendency of the price of money, but Dominion issues ' remain steady, many showing a slight appreciation. By Telegraph.—press association. Copyright. London, February IL The gilt-edged section of the London Stock Exchange lias been somewhat overshadowed lately by the upward tendency of the price of money. The knowledge that there is no hope of an early lowering of the Bank of England rate and Dlr. Winston Churchill’s announcement that a reduction in the income tax is out of the question have had their effect on the' gilt-edged security market. Consequently loans have shown some weakness, which is reflected, more or less, in other investment stocks. Dominion issues, however, remain steady, many showing .a slight appreciation. Rubber stocks and shares have been under a cloud since the announcement of the Government inquiry into the restrictions; but there has been a small boom in other industrials, notably in gramophones, artificial silks, electric supply, and newspaper shares. Commonwealth Borrowing in New York. The news cabled from New York that the Commonwealth of Australia is floating a ten to fifteen millions sterling loan there naturally created some interest in London financial circles. Although definite information regarding the issue is not obtainable, newspper cablegrams from Sydney state that it is believed in financial quarters in Australia that London would prefer the issue being raised in New York. From what can be learned of the best informed authorities, there is not the slightest ground for this belief. In this connection it may be pointed iut that 'since July seven Australian loans, totalling over £30,000,000, have been floated in London. With the solitary exception of the City of Sydney issue, all these are now quoted at substantial premiums. The Wool Position. Discussing the wool position, a Bradford correspondent writes: "Persistent hardening, of raw material values has had the effect of creating greater confidence in other sections of the industry, and consequently there is steady business, and prices for partially and fully manufactured paterials are being gradually placed on higher levels. This continuous response to the lead given by the raw material and substantial active bidding for wool at the colonial sales,, despite . hardening prices, entourages a feeling of optimism particularly at the raw material end of the trade. ’ But on the other hand, some predict a very awkward time for our spinners and manufacturers -in the second half of the year. Assuming that the present measure of \vorld consumption is maintained, and there are no difficulties in financing present (purchases of weol, acute scarcity of all qualities of wool is not improbable, with something akin to famine prices later in the year; but spinners and manufacturers in this’ district are not worrying unduly about the future. They are making the most of the opportunities offered bv the present improved demand for their products and limiting their risks by carrying light stocks, so that when reaction comes their loss will be restricted.” Advance in Hides and Leather Prices. In an interesting article explaining the extraordinary advance in the prices of hides and leather, the ‘Statist” says two factors are mainly responsible. Firstly, hides are purely by-products, and their number is regulated by the consumption of beef, as cattle are raised and- slaughtered for beef. There has not been an increase in the consumption’of beef commensurate with the increase in the usage of leather. There have been very large increases in the demand for leather for the motor industry. It is estimated that in the United States motor upholstery now absorbs 62 per cent of the total production of dressing hides. The second factor contributing to the shortage has been the heavy replacement buying by the United States and Russia. Preservatives in Butter. In connection with the agitation for the removal of the prohibition on preservatives in butter, one of the biggest blenders states that his firm this season has been compelled to abandon Victorian butter, of which; it had previously used large quantities, substituting’for it Esthoman and Latvian, for which it is paying higher prices than asked for in the Australian official mice list of produce. The Provisions Exchange yesterday quoted Australian at 1545. to ’lsBs. per cwt, except’onally good, 1605.; Polish, 15/s. to 160 s. per CWt. .