WELLINGTON NEWS

Hokitika Guardian, 24 June 1930, Page 5

WELLINGTON NEWS

NEW YORK SLUMP

(Special Correspondent.)

WELLINGTON, June 23,

The world is becoming used to hearing of slumps and bcoms on the New York Stock Exchange. There have bcfjii ulumps, reported every rdmth u.is year, and they have grown in intensity and particularly the past seven or eight weeks. On May Bth. it was recorded that hut for the fact that professional interests Avere chiefly concerned and that the revisions occurred from figures not »so high as those recalled by the 1929 boom saved the day from disaster. On May 13th. there .was another, break in prices Avhen united Steel and other pivotal shares dropped by 2' to 5 points. On June lltli. there Avas again a break in prices and this AA-as attributed to sympathy Avith London Avhere there Avas a sharp fall, in prices. The losses ranged up to 20 points and there Avas little support fo!«Alie market. United States Steel reached the Loav record of 160dols. On Wednesday last there Avas another heavy decline in prices and new loav levels Avere recorded for hundreds of listed stacks. United States- Steel-slumped to’; 156 points against 180 a weeh earlicrj It Avas estimated ..iliat over 3,000,* OOO.QOOdoIs in market .- values was"’ swept away, adding'to the'vast losses-that find already been incurred. But the slump Avas not confined to the Stock Exchange and spread' to the commodities. "Wheat dropped to 95. cents (about 4s) a bushel which is lieloAv the pre-war price, for in July 1914, Avheat Avas 98 cents. Cotton, rubber, sugar, copper, silver and other commodities all broke doAvn.

Copper at 11 £ cents per lb. is an exceedingly 16av price. America has virtual control of the copper market, the United States being the principal producer of the metal, and last year , users were compelled to pay 18 cents per lb. The interesting feature about this is that if America with tlie virtual control of a commodity has been unable to stabilise the price, Avbat hope have Neiv Zealand ; producers of being able to hold up the price of butter tvith its small contribution to the total.. ,;•)

The slump in New York will, ’.nave its reconcussions throughout the. world. There.is bound to be .reaction oh the London Stock Exchange and on the Continental Bourses, and it must be reflected in Australia, and New; Zealand. The , reaction in London Avas made apparent early in the Aveeli when it Avas reported that there was renewed dulness on the Stock Exchange, and money aaus expectced to remain tight for some time.

TJfe' Londoii j,was sqsi reflected out here, for the share markets have been dull although the redpi'd of business has -been good. Australia has been unloading a good many (shares on New Zealand investors, particularly bank shares which'have beejUforccd tip. A, Melbourne firm of .sharebrokers recently stated that NeW.jZealand buying had -actedMiwrecent iveeks as a great support to the Australian market. “Undoubtedly the Australian markets would have drifted to • much lower levels but for the taking by Dominion investors of large blocks (in the aggregate) of leading securities, and particularly bank shares. Should support he withdrawn from any cause it will assuredly result in a fresh relapse.” Support has since been withdrawn and share values have been easing. \ But the average man in the street will evince no sympathy for tne investor who. incurs losses on his Stock Exchange gambles for it is gambling just now, on the ground that tlie investor can look after himself, which is quite a fallacy, 'for he jumps to the tune set by his broker.

HoweVeir, leaving 1011% the Stock Exchange slump, the scanning teatore about the break of prices in New York is that it has spread to commodities, and the question arises are we to see a further a drop in values of commodities? This seems not un & likely, and .it is a significant fact that after several weeks of a firm , and buoyant w r ool market in Sydneyeasiness set in last week. The full effects of the New York slump have still to be seen in England and on the Continent, and if those effects aie relatively as severe as they appear to be in the United States then commodity prices will slump, and prices will be pushed down lower thani conditions warrant because of the growing lack of confidence. Wholesalers and manufacturers wiLl .find the position irksome.