BRITISH TRADE

Hokitika Guardian, 20 May 1931, Page 2

BRITISH TRADE

FORTNIGHTLY REVIEW

LOWER BANK RATE

“EMERGING FROM THE MORASS.”

(United Press Association—By Electrli Telegraph.—Copyright.]

LONDON, May 16. The financial event of the week was the reduction in the hank rate to the lowest level since 1909. This was generally expected when the New York rate was reduced to 1) per een.t last week, but came rather sooner than anticipated. Following the New York reduction, the action of the Bank of England is regarded as an indication of co-operation by tl;o international bankers to help the world trade recovery hv cheaper money. It is not much immediate effect, as the money rates in our open market are still well above those of New York, Paris, Amsterdam and Brussels, but it is welcomed as a sign of better times ahead. STOCK EXCHANGE DULL. The stock exchange period just concluded is described as one of the worst experienced for a long time. The only bright Spot has been the gilt edged market, which remained steady, while all the others’ were depressed, a-nc. tiiOVted Upwards on Thursday when tin haitk fate was reduced, but all the other sections have been in a slough ol despond with persistent heavy liquidations and falling prices. Tlv weakness, in industrials is due to the low value oi commodities. An especially weak section has been’ Home railways which relapsed to new low records on heavy selling from all quarters. Foreign securities, also, have been considerably affected. As, an .illustration- of the nervousness of the mar ets, one financial writes says a dealer in a certain line of Dominion stocks found the price go against him two points in mi hour because it was , believed that ho wanted to sell. On the other hand a broker buying £SOOO worth of foreign bonds put the . pride up three points. In ordinary times such a transaction would not have moved the price.

AUSTRALIAN BANKS. The “Morning -Post’s” financial editor says it is impossible not to lie impressed with the excellent manner in which -the banking community; of Australia comported itself throughout the crisis. From the commencement the Commonwealth Bank and the outside i banking institutions had not spa re a pains to show their readiness to coil operate with the Government in meat- ! iftg the difficulties of the situation, and J only j when the financial policy of the | Government has beteit manifestly in direct conflict with soiirid principles ‘ was the Ctiittmonwealth Rafik obliged to fulfil rtflf-'tlu tywby ’'the necessary protests and warnings. Even these warnings, though sufficiently im--1 pt'ossivq, ftp-pear to have been uttered | with scrupulous regard to the wee‘essity for the banks keepjng clear of anything like party politics. THE WOOL POSITION. Discussing the wool position, H. Dawson and Sons write:—“The July sales will be awaited with intense anxiety, and also strong hopes for better support from the piece goods end of the trade, which, for the past year, has shown a poor return for worsteds, al- , though the dress goods trade, particujlarly the woollen section, has not done jso badly. Tbje woollen trade generally : has given good support during the past j series, especially for merino lambs and j short; wools, and also clothing slines. The latest figures indicate that machin. ) ery -activity continues good, and employment is improving. The wool offer ing s will largely -he focussed in London.; for the next four or five months, jWe are well ahead in the absorption l of merino wools compared with recent [years. The consumption of the finer [grades shows no sign of diminution. Valites-are still reasonable/being about 12Y per cent below the average values of 1913-14. It is difficult to estimate the- prospects for the coming cloth season owing to the uncertain, if not .parlous, position of the export trade, hut ; all' imports agree that stocks of cloth We abnormally low. The are more empty than for years past. The main cause of anxiety seems to cen + "o in the unsatisfactory credit position. Ihe many buying markets, the varying exchange arid the difficulties of the export trade, while Home unemployment has" seriously reduced the spending power. The'two and a half per cent' bank' rate -will slowly hut- surely have a beneficial influence. Consumers generally are lightly stocked* .Consequently, in the finer ginues. the position is healthy. We are steadily emerging from the morass ”