BRITISH TRADE

Hokitika Guardian, 31 July 1929, Page 3

BRITISH TRADE

FO KNIGHTLY REVIEW. VERY HEAVY EFFLUX OF GOLD REPORTED. United Prtss Association.—By Electri Telegraph.—Copyright.) Tuly 27 Tiro week ended *s|jly 20 was very gloomy on the Stock Exchange owing both to thle fall of prices and the serious shrinkage of business. A much more confident tone developed early this week, although there was no appreciable improvement in the quantity of the business. Liquidation was much less persistent than recent I ,'v, while sentiment was favourably affected by Air Philip Sn''”" , cn’s cautious reassurance at the Bankers’ Banquet. The financial papers admit that this speech was partially responsible for the maintenaneje- of the Bank rate nucha,aged, despite the gold position. They have not omitted to express t,h irony of the situation, a Socialist Chancellor of the E'""’''being able temporarily to lew up the market. Yesterday, however Stock Exchange conditions *>»»*» In weakened owing to the growing seriousness of the monetary outlook, for there was a further gold efflux to +V> Continent reducing the Bank of England’s holdings tq approximately £147,759,H0Y Since June 18 the 1 withdrawals total £17,316,000. an average of £500,000 a day. Germany has taken £11,500,000,. France £6,500 000, air' America £2,250,C00. Thus the Bank of England’s laborious work of- building up gold reserves since the advanced discount rate of Fo'm-""”" has been practically all undone within a f aw weeks, and it faces the autumn with its stock of metal much l.How the quantity re carded, as necessary at t'dseason of the year. Moreover, the gold exports failed in their chief ojbccfc of turning foreign Exchanges in favour of sterling. In these circumstances it is no wonder that the depression of gilt-edged securities has been almost acute during the past week. Many interests are now inclined to view a 6 per cent Bank rate as inevitable and would welcome an announcement to this effect' as likely to relieve the uncertainty: During the week the underwriters were left with ?8 per cent of the £2,(XX).COO islr Guiana 5 per cent, stock, issued at £9B. while the average rate of slb'+”v”it of Treasury bills yesterday Was 109 s 1.85 d the highest level since June, 1921.

FOREIGN TRADE. ~ “The Economist,” commenting on Britain’s foreign trade for the first half of 1929 says: “Apart from the set-back of June, the returns can bo considered encouraging. Exports showed a 1 per cent, increase over the first half of 1928 and the excess of imports over exports showed a 1.6 per cent increase. Those percentages may appear insignificant, but an important qualification must be home in mind, namely that during the past year wholesale prices have *falleri by 9 per cent and so, if the -trade figures were expressed in volume instead of value, there is little doubt that the 1929 returns would reveal an appreciable increase over last year. An instance thereof is furnished in the re-exports. These showed a 10 per cent decline compared with 1928, 'but a substantial item of the British re-exports is rubber, which is now only half the price it was a year ago.”

WOOL TRADE

The wool sales which closed this •week wone of critical importance to the industry. They were somewhat disappointing, the slackness in the general demand and the large withdrawals. The competition for merinos, both from France and Britain, was conspicuously weak. The whole of the European is wearily waiting for new orders and is only slowly reducing its heavy stocks of raw material until new orders for manufactured goods are forthcoming. There is no prospect of hotter conditions. Tho most hopeful present factor is that cheaper wool will create its own demand in finished goods. As the nett effect of the variations in the past year, wool values are now 25 per cent below those of a year ago. Among the reasons must be included the competition of artifical silk, which is being increasingly used for wen's as well as women’s garments. Another factor Restricting consumption is undoubtedly tho heavy toll 'by merchant retailers 'beforo the consumer is reached.