WELLINGTON NEWS

Hokitika Guardian, 3 November 1931, Page 6

WELLINGTON NEWS

THE BUSINESS ASPECT. (Special Correspondent). WELLINGTON, November 2. Th e political side of the results of the general election in Britain have been Very, freely canvassed by many newspapers,' -but there is more than politics attached to it. What will he the . business results to Britain anu the Empire/ One fact stands out very prominently, and-,;,that is the wholesale defeat of socialism has sent a wave of confidence surging through the Bri tish Empire. Capital is holding up its head, and is looking about to render services to itself and the community That wave of confidence is beating against our shores. The market that is most; sensitive to changes, whether they be .political or financial, is the Stock Exchange. Capital is both timid and courageous. It goes into hiding at the first sign of danger, hut the moment it believes that the danger signal has been removed, it emerges from its hiding place and immediately sets to work.

Towards the end of September, after Britain’ divorced the. gold standard, there existed considerable uncertainty and the Stock Exchanges of the Dorninion were dull. ; Share values were very /much depressed and the shares of some very ySound companies were available at bargain prices.' Now there is: confidence and a general belief that the outlook will improve steadily.

Because of this confidence, the values of shares have been advancing. For instance, during the first week in October, Union Bank shares could have been bought at £6/15/-; as a matter of fact, they were sold for much less in September. 1 Now they are readily changing hands at £B/4/. Nothing has ■ happened to the shares, that <s to say, there is no increase in the div-, idend aiid no increase is expected, yet the shares have risen sharply since the British election. This is evidence of an outburst bf confidence and it-4 s pleasing-: to note that the feeling of confidence 'is pretty general.

The National Government in Britain has been presented with a blank cheque by the electors. The povernment has the powers of a dictator, but those powers have not been usurped but have been acquired in a strict, ly constitutional manner. There is ample evidence that Britain will abandon free ti/Tde temporarily, if not permanently, jitst as she abandoned the gold -.standard .when the circumstances war_ ranted’. Britain will not impose a tariff. on food stuffs: that would he foolish, if not suicidal, for she must protect her workers. There is, however, the probability that strenuous and organised, efforts wfflrjp made to develop, the—Empire. -There will be no tax on wool for instance, nor is a tax necessary, for wool is a world commodity with a world demand. Wheat stands in a different category, Canada, - Australia and India can .'supply the H6iMh Malltht- -With ■Vi II the wheat that may he required, and a small duty of 3d per bushel would penalise the wheat growers of Russia, the United States and the Argentina. Frozen meat end Initer do not lend themselves to such treatment because supplies from within thg Empire are not sufficient to meet the the require, merits of Britain. It seems that each commodity must be dealt with separately. There is no doubt that trade within the Empire has become an urgent problem and the political heads in the various Dominions are showing n- definite trend towards Empire trade, the “Good-will” ship visiting Canada from Australia' has proved to he excellent publicity and it was reported recently that both Australia and Canada are anxious' to negotiate a reciprocal trade treaty with New Zealand The task before, the National Government in Britain, is not budget balancing but trade) balancing. and the stag* is set for remarkable developments in inter-Empire trading.