BRITISH TRADE

Hokitika Guardian, 4 November 1931, Page 7

BRITISH TRADE

FORTNIGHTLY REVIEW.

(United Press Association.—By Electric

Telegraph.—Copyright.)

LONDON, October 31

The high spirits which prevailed on the Stock Exchange on Wednesday morning as a result of the National successes at the polls were not surprising, but, unfortunately, the buoyant tone was not maintained. The public demand for securities which all sections had anticipated did not materialise, but there came instead a rush of profit-making by professional operators, who, under the cash dealing regulations, had to sell within •three days if they wished to avoid taking up the stock and paying stamp duty. This naturally lowered prices. Gilt-edgeds especially suffered, their difficulties being accentuated by the decline of sterling exchange in most centres.

In these circumstances, it was satisfactory to note that Australian issues maintained the improvement that has been going on since the beginning of the month. New Zealands also have shown steady appreciation, but until the Government’s intentions regarding tariff® are known stock-brok-ers do not anticipate much investment by the public. SOCIALIST ATTACK ON BANKS. ; Among the shares showing improvement were a number of banks, including the Australians, and in this respect the city editor of the “Morning Post" writes:— “It iis impossible, when- recording the verdict of the country at the election, not to- recall the prominence given in the manifesto of the Socialist Party to the attack upon the banks and the- proposals towards their nationalisation. Unquestionably, these tactics were not without effect in bringing about the electoral massacre of practically all the leaders of the Socialist Party, for the electors have seen quite enough of the effect of two years’ control of national finances by a Socialist Administration, without desiring to witness- what might happen if control were granted of the banks and the credit system. Moreover, the public probably has formed a pretty shrewd idea not merely of the baseless character of the charges made by the Socialist leaders against the banks, but also of the fine part actually played by many banking leaders during the past two years in warning the Government of the country of the results which must follow a prolonged orgy of national expenditure." ENCOURAGING SIGNS. Reports from many parts of the country afford striking evidence that the revival of Britain’s trade and industry is continuing. This is particularly the ease in the North of England, where the number of unemployed has fallen by 61,000, or 10 per cent, in six weeks. One of the most cheerful signs is the demand for new sites for factories from both foreign and British firms,

The city of Birmingham information bureau is in communication with fourteen Continental and American firms that are contemplating opening works in the city, and definite application for sites has been received from France, Germany and Holland, with tentative inquiries from Sweden, Belgium and the United States. Discussing the position, the “Economist" says: “There is as yet no disposition to launch out on new capital expenditure. The continued lack of business in the new capital market confirms this. From the financial angle, this lack of enterprise is due to several cause®. First and foremost, no one is able to 'take a view.’ No one know® when and where sterling will settle down, and what is going to happen in foreign countries. At home, too, there have b&en two serious obstacles in the way of immediate business progress, one the general election and the other the 6 per cent. Bank rate. Some observers were inclined to believe that the Bank rate would be maintained during the election primarily as a precautionary measure against any unsettling effects the election might have at home and abroad, but there can be little doubt that so high a rate, if indefinitely con. tinued, will have a de-terre-nt effect on trade, because it directly raises the cost of bank advances, and also because it tends to deflect funds into the money market, more particularly into Treasury bills. Now that the election is over, there would be, perhaps. grounds for hoping for a reduction, were it not for the upward trend of rediscount rates abroad, with the prospect of further increases in important centres."