MONEY AND BUSINESS AFFAIRS.

Manawatu Standard, Volume LVII, Issue 221, 18 August 1937, Page 4

MONEY AND BUSINESS AFFAIRS.

THE MONEY MARKET. (By Last week reference was made to the enormous increase in the note circulation of the Bank of England during the bank holiday week. The jncreass was £5,600,000, bringing the total to £503,900,000, which was a record. But, for the week ended Wednesday, August 11, about £6,000,000 of the notes were returned to the bank, making the circulation £497,900,000. Even this is greater than the circulation in the Coronation week. But rvhab becomes of the returned notes? We would naturally think that if the notes are not dirty and somewhat worn they would be reissued: this, however, is not the practice of the Bank of England. Once a note is returned if it never issued to the public again. It should be remomberea that the Bank of England is divided into two- departments, an issue department and a banking department. The issue department is concerned with the note issue only. It can issue notes up to £200,000.000 against Government securities. When the Bank of England first took over the note issue of the British '1 reasury issued during the Great War, the bank received about £4,000,000 of silver. The bank has gradually got rid of the white metal and whatever it holds in silver is merely till money. The issue department deals only with the banking department and not with tiio public. It is the banking department that issues the notes to the trading banks which of course deal directly with the public. The notes, when they reach the issue department on return, are withdrawn from circulation, and etored for a period and then destroyed. The notes are a special feature for the paper is made by one firm for a great number of years and is of special quality.

THE MEAT QUOTA. The Minister of Marketing (Hon. W. Nnsli), having returned to the Dominion, we know officially the quantity of beef and mutton and lamb that can lie exported to Britain. In the new season we can ship 56,200 tons of beef, While this is an excellent concession to Now Zealand, it is of doubtful value to us because we have not the beef cattle to enable us to export the quantity. During the half-year ended June 30, we exported 163,513 c\Vt of chilled beef, against 141,870 cwt in the corresponding period of last year, an increase of a little more than 21,000 cwt, and 200,500 cwt of frozen beef, against 264,044 cwt in the correspondin'l' neriol of Inst year, a decrease of 63,500 cwt. The actual shipments of chilled find frozen beef during the half-year were 364,013 cwt, equal to 18,200$ tons, against 405,914 cwt or 20,290$ tons in the corresponding halt of last year, a shrinkage of 2095 tons. There is very little prospect of our being able to export 56,200 tons, the quota quantity. The tendency appears to be to ship chilled beef, but the steers for this trade must be ot special quality if we are to stand up against Argentina. ■ The position with rospect to mutton and lamb is very much the same. In the six months of this year the exports of lamb totalled 1,841,164 cwt, ns comparel with 1,752,898 cwt in the first six months of last year,' an increase of 88,266 cwt, and the exports of mutton totalled 414,747 against 499,684 cwt, a decrease of 84,63/ cwt. The total of lamb and mutton for the half-year is 2,255,911 cwt or 112,/95$ tons as compared with 2,252,582 cwt or 112,629 tons; the increase was thus only 166 tons, and wp have the right to export an additional 5500 tons. There can be nO doubt that the shipments of mutton and lamb during ths first half of this yoar have _ been affected by the rise in wool which is estimated to have been 71 per cent, more on the prices of the season ol 1935-36. Farmers are obviously holding all the sheep they can. while more farmers have taken to sheep farming. Wool at present pays better than mutton and lamb, and while the disparity between the two lasts the shipments of meat will ho relatively snwlj. However, should wool values decline to the level of 1935-36. the probability ,is that there would follow heavy shipments of meat and the increased quota of 5500 tons may then be found usoful. . , The Minister did not, however, secure an agreement with respect to dairy produce, and such an agreement is no doubt what he mostly desired. Mr Thomas Baxter, the chairman of the British Milk Marketing Board, recently told a gathering of 700 British dairy farmers that tile Government would in the new session, which begins towards the end of October, introduce its long tehn agricultural policy; lie liad hopes that the repeated requests of the Milk Marketing Board that a levy should be imposed on all butter imported would be embodied in the legislation. We may bo sure that Mr Baxter is not talking at random for lie must have some good inside inforriiation. It will be remembered that when Air Baxter was in the Dominion some two years ago lie suggested restrictions on our exports, which were refused by our dairy farmers. The encouragement of dairying in Britain besides being of special economic value to the country is in the nature of a war precaution. Sir Thomas Inskip, tho Minister for the Co-ordination. of Defence, will probably side with the Minister of Agriculture in taking vigorous measures to increase dairy production in Britain.