WELLINGTON NEWS

Hokitika Guardian, 22 May 1926, Page 1

WELLINGTON NEWS

DUMPING DUTY ON SUGAR

(Special to “ Guardian.”)

WELLINGTON, -May 19

The decision of the Canadian authorities to impose a dumping duty of 3d per pound on Australian butter does uot take the Australians by surprise. Apparently any loss that may be made on the transactions entered into between traders in both countries will fall upon the buyers. When butter has been sold on a free-on-board basis, the responsibility of the seller ceases when the butter is placed on board steamers, while in the case of consignments lots it was understood that no dumping duty would he applied. The trade in Arelbourne does not denounce the Canadian .Ministry for imposing a dumping duty on Australian butter in the circumstances, for it is recognised that were the positions reversed Australia would act similarly towards Canada.

“ Do Canadians want to spread AnsI tralian butter on their bread.” That question has been very seriously disI cussed of late in Canada in connection with the importation of Australian butter and its sale by dealers in containers which have no reference to the place of manufacture. Dairymen in I Canada claim that the Australian butter should not be sold unless the consumer could see from the label on the dealer's carton that he was being supplied with an Australian product. The Deputy-Minister of Agriculture in Canada in reply said that not only had there been no relapse in the price of Canadian butter because of the importations, hub that it occupied a better place on the British market, than ever j ' before. During the discussion, flattering testimony was forthcoming as to the high quality of the No. 1 Australian butter. Some of the managers of leading produce stores, in view of the grade of the butter, thought that it would be mistaken policy to have the butter labelled, as to do so would lead people to discriminate ill favour of the Australian product. The reason of its superiority was stated to be the more extensive scale on which butter was made in Australia, the way in which creameries had been centralised, and the general cure exercised in manufacture. THE MONEY AIAIIfvET. Prominent bankers in ■Wellington were confident that the strike in Britain would have little effect on the money market, and their prediction* have,.been amply justified. Last week there was an increase in the gold reserve of the Bank of England of £BIO,OOO, and this followed upon an increase of £1,140,000 recorded in the preceding week, in other words during the whole period of the strike the gold reserve increased by £1,950,000. This goes to show that there vas'no loss of confidence, and no feelings oT panic. The layman may very well ask what does this accretion of the gold reserve means? The Bank of England is a regular buyer of gold, and the metal is purchased for the purpose of strengthening the banking reserve. But the effects arc more far reaching than that. When the Bank of England purchases gold it pays for it by a draft on itself, and sooner or later the cost will appear on its accounts as a deposit to the credit of one or more of the clear- ; iiig house banks, which must possess , credit accounts at the Bank of Eng- < land. Thu clearing bank's will thus

have more cash, and will therefore beable to lend more freely. Additional loans by the banks create more purchasing power in the hands of the, people, and a stimulus is thus given to trade. The London monetary position' gave evidence of the strength before the strike, and that was not disturbed by the upheaval. The sterling dollar; exchange which fell slightly at the he-, ginning of the strike, recovered very soon, and the latest quotation showed that sterling had reached the mint par of exchange. The recovery has been so marked and the strength of the London money market so pronounced that American hankers and financiers in the United States anticipate that in a very short while Britain will he drawing gold from America. That is a somewhat exaggerated view, as the exchange must go to 4.89 dollars, before it will be necessary to draw gold. The London money market should show considerable ease during the next six or eight weeks, when no doubt advantage will be taken of the situation to issue loans in London. The market position is of considerable interest to us because of the fact that our Government is anxious to raise a loan of £5,000,000 in London, and an easy money market would enable the Government to place the loan at a moderate rate of interest.