British Finance and Trade

Hokitika Guardian, 3 November 1921, Page 4

British Finance and Trade

PROSPECTS KOR WOOL AND KUODSTU KFS. LONDON, Od. -IL Abnormal ease prevails in the money market, due almost entirely to the bo. vernmeiiL’s continued heavy borrowing from the Bank of England. Ihe position is that, during the hist lexv the volume of Treasury hills to r salt, hv tender has been much below the amount of the maturing hills and tl market retpiii'cments. Ihe result In. 1 let’ll that. Treasury bills have fallen to mi remunerative levels. Ihe Ext ; U '■'!'• lias been unable to cover the matm dies |,v the sale of new bills, and. bus been < (impelled to borrow- on w ays and moans fur advances over and above the I amount of the' revenue deficit. Lx- ' ports consider that* the present ease is ' likelv to continue. 1 Tit,* “Statist" says that m the trade ' slump all commodity prices are fundaI meiit-d factors winch would m. in |".J p money am,H altogether from the 1 (dl'eet of the Hovernment’s artdieud ! creation of credits. Therefore the ease is likelv to continue till trade begins to revive or the Government expenditure is gain brought substantial.; lowi'f. , The stock Exchange is rather l.rniei and more cheerful. The x-asincss «» f zt. ii'caneenienl of H.e CJO.If 0 000 of local .(od s. which curtailed business, causing investors to wait for the new loan instead of coining on the mnik. t to purchase new stocks. _ ltc.mrding wool, a prominent momhoi of tire trade says the outlook for the new rear is somewhat obscure. Buyers are adopting a cautious policy lor Hlture hiisitiess. The advance lias *iot 1 to,, )ar«e and too rapid for absolute conthlenec. Margins of profit arc impossible under present conditions, and the values of manufactured products and raw wool do not meet the manufacturers 1 complaint that the advance Inis checked new business, though a few ' weeks ago there were hopes of new eiders on the basis of *t“d for sixty-loin* tops. The conditions prcval'ing at t.m piece goods eml of .the trade are still far from satisfactory. The advance will, however, help towards the better liotiidation of old stocks, altboii It it hinders new business. Meanwhile*, manufacturers are still squeezed between the millstones of the high cost of product ion here and Hie low prices od'ered by rnmp'titors abroad. A most remarkable feature of the sor. jes of wool sales just, closed has been the absorption of proportionally large offerings of crossbreds, to which both * Homo and foreign buyers cot,tribute. The only explanation uf the broadening of competition in cross-hreds is their relative cheapness, wlii-li is creating a demand and encouraging confidence.

Germany’s lirmness to secure supplies is amazing. Germany has taken, m direct* imports from South America dut(l,.. year ended Septcmhcr. BH.Dd bales, a total xvlii-li is higher than that of anv other couulry. Their mills a'*** l M *tter placed with order: than those "I any other country, and they have refused new business. Their lot ore looks ri:kv. but depends entirely on their ability to -ti'icde tin "ngl, the M'l.ttiniincial ditl'icidlii’s. Il i*. evident that the lack of confidence in the mark js an inducement to many to invest in raw materials, especially in view' ol I he good trade experienced. Tit least satisfactory feature in the [Joule trade is the position <f the maim fnc.tiirt’i' of piece goods and the merchant. Tin' financial diH’t* nities arc. however, less acute, and ar<> gradually being alleviated, hut the prinniso nf a real "revival has not yet m iterialised. The position if the provision trade shows no icvival. but stems to he gnitlg from ibt)<l to worse. The Government stocks of butter are moving very slowly, despite a further reduction in the selling price. Nobody seems to take any interest in this onhi-stoml stuff, and it is suggested that the Government ought to cut its loss and sell it at any price orsend it* to faniine-striekon Central Europe. The only satisfactory thing in the butter market* is the good demand for small arivals of new Australian butter, which ts clearing rapidly. Tt is hardly sale ti< mention the word cheese in I'ooley street nowadays. Everybody who 'ouches it scents to get bitten. Eight, linns which combined to purchase (,)ii o <>'"sInmW last output at 13? d a lb fob. find it is saleable here nt only about Sits a cxvt. so their losses must run into many thousands of pounds. People \vh» bought Canadian cheese also lost heavily. Other foods continue on the down grade, and the public are at last* able to get them at something approaching the pre-war prices. Excellent butter is now being retailed a, t'J'_\l and '_’s a, |b. and cheese at lOd and Is.