THAWING OUT

Gisborne Herald, Volume LXVI, Issue 20076, 24 October 1939, Page 7

THAWING OUT

GILT-EDGED MARKET LIBERATING FINANCE RECOVERY OF SHARES (British Official Wireless.) Reed. 1.30 p.m. RUGBY, Oct. 22. The stock markets continue the revival which started a week ago when Government stocks rose above fixed minimum prices. The financial editor of the Sunday Times states: “The thawing out of the gilt-edged market is liberating money all along the line.”

The Financial News states: “With the war only seven weeks old the markets largely have recovered from the paralysis of the initial shock. Over 'the past fortnight the improvementin prices, tone and volume of business —has been highly encouraging.” The newspaper points out the responsible factors as the reviving confidence and easy money for although the bank rate is still "at an illogical halfway level between dear money and cheap ’money,” there is evidence of an active policy of credit expansions.

The newspaper comments that the Vise might have been higher but for the sinking of the Royal Oak. On the o f her hand, but for the agreement with Turkey, the normal week-end reaction might have been more pronounced. The paper continues: "But the fact remains that generally the trend reflects rather the underlying confidence in the ultimate outcome ;which is largely independent of such ’transitory influences.” Although wholesale prices show an increase of 7i per cent during the last month, this increase can be explained by the increases in real costs and the rising prices, therefore are no sign of inflation, but the adjustment of'the new conditions and a return to normal trading. Financial quarters thus regard the past week as an encouraging sign.