CHEAPER MONEY YET

Sun (Auckland), Volume IV, Issue 987, 2 June 1930, Page 13

CHEAPER MONEY YET

KEEN WOOL DEMAND MAKES OUTLOOK BRIGHT ’CHANGE MARKET DULL Reed. 9.20 a.m. LONDON, Sunday. The Stock Exchange is passing through a very dull period. There is is. complete absence of speculation and the week just closed has been one of the quietest experienced for many months so far as industrial shares are concerned. The oil;.- activity has been in gilteclgeds, which have experienced an increase of business, thanks to cheap money and the expectations that the bank rate will be lowered in the earfy future. Many people hoped the rate would be lowered to 25 per cent, last Thursday, but were disappointed. It is, however, regarded as almost certain that a reduction will come in a week or two. "The world as a whole is passing through the throes of a major trade depression,” says the “Economist’s!’ monthly review of the state of trade, and reports of other authorities make equally dismal reading. Lloyd’s Bank Monthly, for instance, in dealing with home trade, says: “Conditions remain generally very disappointing, and unemployment has again increased. Commodity prices have again fallen during the past month and until traders have some certainty that the fall has reached its end, they are unlikely to extend corumi ftneiits»” KEEN COMPETITION

The only bright spot appears to be the wool market. All broker’s reports of the wool sales which closed yesterday are couched in optimistic vein and express the view that confidence has been restored.

Thus Charles Balme and Company write: “From the active and widespread competition it would appear that the trade has confidence in the future, and it seems reasonable to hope that we shall not see any setback in values during the next few months.” H. Dawson and Sons write: “The outstanding feature is that practically all medium combing and Merino wools aro meeting the keenest competition. Continental buyers, particularly German and Alsatian spinners, are evidently needing these for immediate requirements and have been prepared to pay a very solid advance. But Yorkshire has not been able to join issue to any large extent at the new level which has been established.”

It is apparent that the pessimism of the early months of the year has given place to a new confidence. Moreover it is evident that the bogey of a heavy surplus of supplies at the primary sources, which contributed so much to the nervousness in the past season, has been thoroughly laid. FUTURE IS BRIGHT

The salient factors to be considered may be summed up as follow: Raw material is still at a relatively low basis, and Merino wools are finding new outlets. Stocks in consumers’ hands are generally below normal and the policy of restricted operations when our market was falling can now be revised, and with the incentive of cheap money, we may now encourage replenishing of stocks. Anyhow there is such renewed confi - dence in the situation that one may be justified in looking forward to improved prospects in the industry, although the change has been so remarkable and so rapid that it Is still viewed with some nervousness, especially in Yorkshire. An important step toward control of the tin output has been taken by the Tin Producers’ Association in the appointment of a special committee to deal with the regulation of the output throughout the world.

The committee comprises membeis representing the Dutch East Indies Malaya, Bolivia and Nigeria, and a significant feature of its composition is the presence of Dutch interels. which hitherto have not co-operated with the Tin Producers’ Association. Tho four sections represented include the bulk of the world’s tin producers outside Chinese-owned mines m Malaya. At the first meeting of the committee it was announced that a complete agreement had been reached on all points.