COMMODITY PRICES

Hokitika Guardian, 29 October 1930, Page 8

COMMODITY PRICES

EFFECTS OF HEAVY FALL

NEW ZEALAND COMPANY'S OVERSEAS OPERATIONS.

AUCKLAND, October 23

otriKing facts concerning the present slump in commodity prices were presented at to-day’s meeting of shareholders in the South British Insurance Company by the acting-chairman of directors, Mr V. J. Lamer. “Shareholders,” said Mr Lamer, hardly need to be reminded that the company’s operations are cairktl on in many other parts of thd world, the bulk of i-o premium inr-om: . -

in® derived from countries <• overseas. It is tliesr- distant fields that I have in mind when referring to commodity prices. In India, for example, during the eight months from November to July last tlie price of jute fell 30 per cent, of wheat 38 per cent, and of cotton 4.0 per cent, while the other products all suffered a slump in varying measure. Jute and cotton are the two main industries oi India, Calcutta being the centre for the former and Bombay for the latter. In Malay.a rubber has, during the year, fallen from approximately Is to 4jd, per pound. There are between fifty and sixty cotton mills in Bombay representing an investment of something like £15,000,000, and some months ago the total capital of nine mills was written down from £6,250.000 to £2,250,000. At the present time twentyfour of these mills have suspended work completely, nine of the number having been closed since 1925, while twenty-three have paid no dividends for six years.

In China contending military factions continue to keep the country in a state of disturbance. Famine and banditry also play their part, 'hut, in spite of these evils, trade goes on fairly well. The low exchange consequent upon the heavy slump in the value of silver has naturally encouraged exports, although the burden > of military taxation and the difficulties of transport in the interior impose some check on these. Our own business in China, has, considering the circumstances, been very well maintained. The current rate of exchange, however, lias operated very strongly against us in the conversion of silver into sterling. The previous year we closed our hooks with the Shanghai tael at 2s 4d and the Hong Kong dollar at- 2s. Tn the accounts now before us the rates used are Is 6d and Is 3d respectively. This lias meant a reduction of approximately one-third in the sterling equivalent of the premiums received in currency. As the company has an important business in this territory the effect upon the figures i» our underwriting account will he readily appreciated. “Nearer home the financial stringency in the Commonwealth has already begun to make itself felt in our revenue figures. To touch on one phase only, wage sheets in recent months have been getting noticeably lighter, and a.s the premiums under 'corkers’ compensation policies are based on the amount of wages paid, wo must be prepared for a further shrinkage in this department of our activities while the depression in Australia lasts.”