CONCERN IN BRITAIN

Sun (Auckland), Volume III, Issue 881, 27 January 1930, Page 11

CONCERN IN BRITAIN

NATIONAL FINANCES NOT HEALTHY LONDON, Saturday. The hope was expressed a fortnight ago that the decline in Australian Government stocks would not continue. Unfortunately this has not been realised, and the prices of most of these have receded still further. Commonwealth 5 per cent, were particularly weak, and sales of these were made yesterday as low as £B6, a fall of fully £9 compared with six months ago. Writers in the financial newspapers attribute the decline to sales by nervous holders on apprehensions regarding local politics. But there are other causes. Undoubtedly one of the chief of these has been the collapse of the wool market, and the effect that it must have on the earning powers of banks and pastoral and other campanies which to a large extent depend ca wool. General business on the Stock Exchange has been very dull. It might have been thought that the combined effect, of the satisfactory ending of The Hague Conference, easy monetary conditions, and the announcement that the date of the Hatry group settlement had been fixed, would have been to rouse the markets from their lethargic condition. The fact is that apprehensions of what the Budget mav bring forth, and the continued dullness of the Wall Street market, have combined to counteract all favourable factory. STEADY PRICES The only matter for satisfaction is that prices generally are steady, except Australian stocks, and also Indian stocks, which naturally suffered as a result of Gandhi’s latest announcement. British monetary conditions are as easy as any. This week’s Bank of England return reveals a very strong technical position, the reserve of £64,889,435 being the largest ever recorded. In these circumstances disappointment is expressed in some quarters that the bank rate has not been reduced. But the best-informed financial writers consider the Bank of England directors wise in maintaining the rate. Their action is apparently due to caution inspired by a further decline in the American exchange, and although a recovery is expected by the end of the month the doctors are wisely not taking risks. The Economist’s” monthly survey the state of trade says the new year opened with feelings of distinctly qualified optimism. It was believed that the progress made in 1929 had fallen considerably short of anticipations, but insufficient allowance possibly had been made both for several factors, which place current statistics in too unfavourable a light, and also for the effect on trade of the many disturbing influences of the year. There It' , h °" ever - no gainsaying the fact tnat the approaching Budget, and the general position of the national finances, are viewed in industrial cir'L® 8 * Uh considerable apprehension, and this is having a bad psychological effect on trad©.