RECOVERY IN TRADE.

Taranaki Daily News, 22 August 1921, Page 5

RECOVERY IN TRADE.

OPTIMISM IN ENGLAND. BETTER TIMES EXPECTED. BOOM IN GERMANY. / , By Telegraph.—Press Assn.—Copyright. Received August 21, 5.5 p.m. London, August 20. The Stock Exchange had a severe fit of depression during the last few days, the gilt-edged market suffering from the unsatisfactory position of national finance and the indefinite outlook of Irish affairs, and declines are apparent in most securities. The one bright spot is the colonial corporation market, where a fair demand is apparent at late prices. Industrial shares have been influenced by the fact that many companies either passed or reduced dividends, and consequently many shares were marked down. Distinct weakness has developed wherever selling pressure has been exercised. Oils have been particularly bad, and at one time a panic appeared likely, owing to an avalanche of selling. There has been a sharp rebound from the lowest, but the market remains extremely nervous.

The exchange position, so far as Australasia is concerned, shows little change. There seems no probability of the realisation of the fears entertained in many quarters that the autumn would see a recurrence of the serious stringency which marked the autumn of 1920. The banks certainly are not offering anything like the old-time facilities, indeed, they are doing all possible to discourage exports, except of necessities, but this policy is working well. The position is improving steadily, and confidence is returning. This is greatly helped by shipments of wheat, wool and butter, which are all realising good prices, and if these are maintained it seems there will be no difficulty in weathering the awkward autumn period, which caused so much anxiety last year. In connection with the exchange question it is interesting to note the Financial Times’ criticism of Mr. W. M. Hughes’ address to bankers. Mr. Hughes referred to Australia as loading gold bullion amounting to over seventy-six per cent, of the outstanding notes. The Financial Times considers this backing far beyond what is necessary. Mr. Hughes dwelt on the value of Australia as a consumer of i British exports, and the Financial Times asks: “Why then did Mr. Hughes refuse to release some of this superfluous gold a year ago when British shipments to Australia were held up by a deadlock in connection with exchange ?” Although present trade conditions, except with Germany and other countries, which are specially favored by the exchange position afford little ground for optimism, many financial authorities believe a recovery from the depression is not far distant. The newspaper Statist gives the following unmistakable indications : “There is a universal absence of financial stringency after one of the severest periods of financial strain that has ever been witnessed, and the decline in many rates has improved the speculative sentiment in Japan and the United States, and a reaction in commodity prices.” This strengthens the belief that business conditions are on the eve of recovery from the recent depression, and the coming months are likely to bring more hopeful prospects. The trade boom in Germany continues, and the condition of all industries, except the chemical, machine and shipbuilding branches, are all extremely good. The iron and steel trades, particularly bar iron and wire, are very busy, and the textile branches enjoying the sudden and quickly increasing clothing, tailoring, millinery and underwear industries have more work than they can execute, and many will be unable to fulfil orders owing to materials not being available. Scandinavia and Holland have sent large orders for woollens to America, ordering knitted goods. The Yorkshire newspapers state that German manufacturers are selling to wholesale export houses in England both men’s and women’s wear and fabrics at less than they can be made at Bradford to-day. They are even offering many open credit to induce business. A reduction in the cost of bunker coak from about 41s to 26s for Tyneside, and 20s for South Wales has caused a weakening in wheat, and some owners are sending and are willing to send steamers in ballast, hoping for further reductions in bunker coal to enable them to run at a profit, so that rates have declined from 75s to 70s, at which several fixtures were made after 73s 9d and 72s 6d had been paid. Chartering has now filled its requirements, and will not consider anything over 65/-.—Aus.-N.Z. Cable Assn.