LOST CONFIDENCE

Sun (Auckland), Volume III, Issue 847, 16 December 1929, Page 10

LOST CONFIDENCE

STOCK EXCHANGE MEN IN BRITAIN MONEY POSITION REVIEWED United P.A.—By Telegraph—Copyright Reed. 9.5 a.m. LONDON, Saturday. The reduction of the bank rate was welcome, though it has so far had little effect on the Stock Exchange prices, except in gilt-edgeds, which have developed in strength, but industrials, especially those of a speculative nature, are still under the cloud of numerous adverse influences, notably the losses of the Herne group, the Royal Mail Steam Packet Company passing dividends, and fresh disclosures regarding the Hatry case. All these unpleasant incidents, coming at the same time, have outweighed the possibilities of cheaper money, which the reduction of the bank rate foreshadows. The “Statist” thus describes the situation: “The brokers, no less than the public, appear to have lost confidence in themselves, and are as reluctant to give an opinion as their clients are to accept it. Meanwhile, the banks remain very reluctant to grant new loans, however good the security, and their attitude contrasts strangely with the amazing trustfullness with which, they in company with finance houses and important brokers, made advances to the Hatry group during the boom.” In these circumstances the news that the Stock Exchange will be closed on December 27 is welcomed, and it is hoped that things will improve after the long holiday. The monetary position has a more cheerful aspect. The Bank of England yesterday received another million sovereigns from Australia, this being the third of four such shipments by the Commonwealth Bank. Other large shipments of gold are near at hand, including £4,000,000 from New York, and before the end of the year it is expected that the bank will have received a further £6.000,000. Thus the bank’s stock of gold will be substantially replenished, and should total about £142,000,000. There is some uneasiness about the possibility of demands for gold by Germany, as well as a renewal of the drain for France, but at present neither country's exchanges permit purchase.