CONDITIONS IN AUSTRALIA

Evening Star, Issue 21744, 12 June 1934, Page 7

CONDITIONS IN AUSTRALIA

FAVOURABLE TRADING WOOL OUTLOOK UNCERTAIN Trading and financial conditions in Australia arc still favourable in spite of a few luiccriaiu features which have lately arisen, states the May review of H. Byron Moore, Day. and Jounioaux. The degree of public confidence remains at a very high level, and this will be one of flic strongest factors iu resisting any backward turn in events. The uncertain outlook for wool following the decision of some of the important purchasing countries to reduce quotas unless reciprocal trade is increased, has caused considerable concern to the pastoral industry. Fortunately the statistical position is sound, and, as Australian wool is of the finest quality obtainable, it is obvious that little diliicnlty will be experienced in disposing of our clip. The organised propaganda by the purchasing countries, however, is likely to have some effect on prices, and tlie industry must be prepared to face the facts in the coming season. As lust season’s prices were extremely profitable, a slight reaction is unlikely to cause any serious difficulties to growers, particularly as the total clip promises to be heavier than that of the season just ended.

The coming Federal elections, owing to the issues involved, are likely to cause more apprehension than usual. Nationalisation of banking will most likely be the platform ol the Labour Party, whilst the present Ministry will probably propose a vigorous policy of reciprocal overseas trade.

The early approach of the elections will hasten the preparation of the 193435 Budget; which will probably be presented lato in August next. Fortunately the Commonwealth financial position is excellent, which indicates a favourable Budget, in which some further relief from taxation may bo granted. Tt is expected that the loan council will shortly offer a newer Commonwealth loan to finance public works and redeem Treasury hills, and the return is likely to be about 3J per cent. The amount has-not been stated, but it will probably be in the vicinity of £12,000,000, and in view of the vast amount of capital awaiting investment its success is assured.

EXCHANGE REDUCTION UNLIKELY. Humours concerning a probable reduction in exchange rates which had been current for some time appear to have subsided during the last ’month, and it now seems unlikely that any immediate reduction will take place. The peak period of the Australian export season has now passed, and for the next four or five months imports are likely to exceed exports, which should-check any further increase in London funds. Moreover, seasonal influences will become an important consideration, and until the 1934-35 harvest and wool clip are assured it would lie unwise to reduce rates, because the strain-on London balances in meeting overseas remittances may he heavier than anticipated. If dry conditions continue the export of wool and wheat would be substantially reduced, and Australia's overseas trading balance would decline considerably. It .would, also/be’wrong to attempt stabilisation of the Australian pound until a definite relationship between sterling and other important currencies has been established.

NEW GUINEA SHARES Press Association—By Telegraph—Copyright. L()?\DON, June I], (Received June 12. at 11 a.’m.) New Guinea shares are quoted at 5s »!d. EULOLO SHARES Press Association —By Telegraph -Copyright. LONDON, June 11. (Received June 12. at 11 a.mO Bulolo .shares are emoted at £0 IBs I'd. DOLLAR AND FRANC Press Association —By Telegraph— Copyright, LONDON. June 11. (Received June 12. at 11 a.in.) The dollar is ((noted at o.OG’i and the franc at 70 7-10.