WELLINGTON NEWS

Hokitika Guardian, 17 September 1927, Page 1

WELLINGTON NEWS

BRITISH TRADE OUTLOOK. (Special to “ Guardian”.) WELLINGTON, Sept. 14. Tho majority of people take very little if any interest whatever in the business affairs of other countries. Even a great number of our business men avoid studying the business affairs and statistics of other coun tries, even when those affairs arc likely to have some influence on our own trade. It was stated in a cable message from London early in the week that there was considerable activity in industrial shares on the London Stock Exchange. Perhaps not one person in twenty who read that message lias given it a second thought, and only one hero and there lias realised its significance. Industrial shares are tlie shares of manufacturing concerns, and when those who operate on tho Stock F,xciLange buy shares they do so with tno hollo of getting a good annual .dividend, or it. may he they expect the shares to advance and so yield a profit

oil re-sale. At all events they do not buy the shares on the prospect of losing money. Buyers and sellers on the Stock Exchange are very keen, so that when wo are told that there is considerable activity in industrial' shares we are justified in believing that these shares have a prospective profit value for the buyers, and there can be no profit in the shares unless the industry on which they aro based is profitable. It would therefore seem axiomatic that this Stock Exchange activity in industrial shares predicate activity in British industries, and that seems to bo the true position. All authorities agree that the industrial outlook in Britain is very promising. Sir Josiali Stamp, the eminent financial authority, was in New York, when representatives of the central banks of the United States, Great Britain, Germany, and France met in conference, which was not so very long ago. His belief is that the four bankers discussed what steps could ho taken to prevent the continuous flow of gold to the United States. Sir .Josiali Stamp is firmly convinced that Great Britain is on the eve of an era of greater prosperity in every branch of its industry, except, perhaps, coaf-mining, but progress is being made by the steady fall in the price level of commodities. His opinion that the policy of the United States of taking the gold it receives off the market contributes to that result. He relies on the continued fall in the price level of commodities to warrant his prediction of prosperity, and by hoarding all the gold it receives the United States is contributing to the fall in commodity prices. The prices of commodities measured in gold of which there is an inadequate supply are declining, and this cheapening of commodities is favourable to Britain, for it will enable manufacturers to reduce costs of production. They will thus bo able to compete more successfully in foreign markets. We. shall feel the effects ol this decline in commodity prices, but it should not inconvenience us if we in turn reduce our costs of production. We have not yet tackled that problem, but we will be forced to do so before very i’ong. Britain’s prosperity is bound to benefit us, because of our close trade and financial relations with the Mother Country. RESERVES ON WOOL.

The President of tho Poverty Bay Farmers’ Union has made the discovery that the best values are not received at tho auctions at present buyers being on more or less confidential terms with ono another. When and and how this discovery was made it is difficult to say, seeing that no wool auctions are held in the Poverty Bay district. However, it is proposed to approach the wool-growers in the Hawke’s Bay, Manawntu and Wairarapa districts to place reserves on their wool. It may be stated that selling wool by auction is the recognised practice in ah' selling centres, and it is also a well-known fact that practically every bale of wool offered at auction carries a reserve. No self-respecting broker would think of letting a bale go at any old price that the buyer may offer; But what is apparently intended by the proposal is that the farmers should place reserves on their wool irrespective of any advice tendered by the selling broker. If this is what the proposal means, then very little wool will be sold at auction, for the serves are cex*tain to be well over the market value. Unduly high reserves fixed by growers has spoiled the 6ale of many a clip. Those marketing wool at the local sales wojjld do well to consult with the brokers and be guided by - their judgments and opinions, for,