BRITISH FINANCE

Hokitika Guardian, 16 January 1930, Page 2

BRITISH FINANCE

UPWARD TENDENCY IN LONDON

REDUCTION IN RANK RATE HOPED FOR,

LONDON, January 11

The year opened with the Stock Exchange decidedly cheerful, for the volume of business and movement of prices both displaying an upward tendency. This was largely due to the impioved monetary conditions which encouraged hope for an early reduction of the bank rate. Many people expected a. reduction would be made last

. .uirsday, 'but the bank directors thought it wise to defer the movement for a week or two. Another factor assisting the improvement is the news that the difficulties surrounding a settlement in the Hairy group companies have now been practically removed, and there are no longer fears of any serious failures of investment stocks especially.

Gilt-edge'! led tlie way in the upward movement and this spread almost to all sections except rubbers, which are suffering from tRe low price of raw commodities. In these circumstances it is- undmpleasant to have to record that Australian Government stocks still remain out ol fa vour and show a downward • tendency, many being five per cent, or more lower than six months ago. Financiers attribute this to a number of causes, the change of government, labour disputes—particularly the coal stiHke—-and the low prices prevailing for primary products, but hope is expressed that the bottom has been touched, for nt the present prices Australian stocks give very profitable returns and ought to attract buyers. NO WOOL MARKET.

As might have been expected the Australian proposal to establish minimum prices for wool has aroused considerable opposition.

'Hie Bradford correspondent of the “Observer” says that the plan is entirely defective in the most important particular. It embraces a project to fix a bedrock price, but makes no provision whatever to ensure any larger consumption of wool. No one can reasonably object to the growers aiming at securing prices for produce- which would not descend below fifteen pence and, incidentally, the average for the seasons since the- war would work out at considerably more. However, it is impossible to discover in the scheme outlined anything which would guarantee success. Its essential feature is that it visualises the holding of an indefinite quantity, provided the wool failed to find buyers at the minimum fiat rate which would inevitably lead to' accumulation and the creation of a worse position in the end. A better plan, as experience lias amply proved, is to aim at popularising wool commodities and the surest and possibly the only way to attain the end is to secure a reduction of retail prices to encourage the public to take advantage of the abundance of raw material. On the question of sales the “Yorkshire Post” writes: “It is for the wool-growers to consider whether it will be better for them to sell their surplus woof in their own market at 'the best price they can command in the next three or four months, or to send it to London for sale in the hope of better prices later in the year. If a revival of world textile industries c-omes, the nearer the surplus wool is to the centres of consumption the better will be the prices realised and London is the market to which buyers will Hock if the want wool between March and September,

OTHER PRODUCE. The Australian and New Zealand egg season has been anything but a euc*assful tone. Prices throughout have been low. Those prevailing now are the lowest of all. Australians arequoted at IBs 3d to 17s and New Zealands at 14s 9d to 17s. A large importer gives, a. simple explanation : “We are getting far too many eggs from all parts of the- world, in addition to the usual Continental supplies, which are exceptionally large owing to the mild weather. Eggs have been coming from Argentina, Uruguay, South Africa, Australia and New Zealand, and China. Stamping eggs with the place of origin has also affected the sale of Australian' and New Zealand eggs, for housewives have not yet learned that an egg can be perfectly fresh although it has travelled 12,030 miles.” “One of the few bright spots of 1929 hasdieen the sugar beet industry,” said Mr Noel Buxton, Minister for Agriculture, when addressing his constituents at Norfolk. During the some 232,000 acres had been grown for nineteen factories, with a high average sugar content of 18 per cent., and the farmers had increased their contracts for the coming season to 315,000 acres, an increase, of no less than 30 per cet. This, he considered, was an astonishing development, far exceeding his expectations when he initiated the sugar beet subsidy scheme five and alialf years ago.