SLUMP IN MARK.

Taranaki Daily News, 17 October 1921, Page 5

SLUMP IN MARK.

INFLUENCE ON TRADE. COTTON INDUSTRY IMPROVES BETTER ’’"TUES AHEAD. By Telegraph.—Frew Assn —Copyright Received Oct. 16, 11.5 p.m. London, Oct. 15. The chaotic condition of foreign exchanges bat* cause<l some uneasiness on the Stock Exchange, and there is also nervousness regarding the course of events following the Silesian decision, but despite these adverse factors gilt-edged securities have been an outstanding feature of strength, aided by the favorable position and prospects of the money market. There is a likelihood of numerous new issues of ‘ colonials”, of which a long queue are waiting their turn, and all seem likely to be absorbed. The New South Wales loan had a good effect on the market, though sales by ‘’stags", who threw their stock cm the market directly they received the allotment notes, caused its price to ease to about a quarter discount. The extraordinary dump in the German mark has overshadowed all other movements in the foreign exchange market. The immediate cause of the slump is unduobtedly the Silesian decision, but it is pointed out that the rapid increase in inflation and distrust in the mark, which has grown enormously lately both in Germany and abroad, make almost any depreciation possible. French financiers suggest that Germany is deliberately encouraging deterioration in order to have an excuse for rot fulfilling the reparation terms, and color i lent to this assertion by a remarkable heading to an article in the Vossische Zeitung on the blessings that flow from the fall of the mark.

The Voeaische says: ‘The fall makes the boom in production and export, which, if artificial, unhealthy and fleeting, is bringing to-day and to-morrow extraordinary profits to German industry, guaranteeing German workmen work and bread. In none of the great industrial States is there so little unemployment as in Germany. At the rate at which our money is sinking the anti-dumping laws against us must break down; they cannot prevent German competition forging ahead.”

The decline in the mark is having an effect on several of our markets, notably metal* and wool. Of late Germany has been the largest European buyer of copper, the recent decline of which is almost entirely due to the cessation of German activity. The German demand at the wool sales also shows most marked diminution compared with previous sales. This is a disturbing factor, and one well-known wool authority says there is undoubted nervousness regarding the stability of values for next years commitments, due largely to the fall in the mark and general disquietude regarding German finance. The Lancashire cotton industry has shown a distinct improvement during the last quarter. Higher values for the raw article have stimulated the demand for manufactured articles, but production is not yet at its full stretch, and many operatives are still unemployed. A satisfactory feature is the appreciation in the value of stock*, which undoubtedly prevented financial difficulties. There seems to be ground to believe that better times are ahead for Lancashire, and there is little likelihood of trade slipping hack to such depression as existed in the early summer.

The prarects for the cotton yarn industry ar? nrighter than for a long time. There i.« a better demand from most market? abroad, and every likelihood of prices Incoming more profitable before the end of the year. An improvement in raw cotton prices was a natural sequence of the decreased estimates of the output in the United States. According to the latest estimates it is indicated that probably the output will be only 7,590,000 hales, compared with 11,355.000 for the previous season. Wheat freights have further declined owing :o the cessation of all enquiry from the Airentine, the North Pacific, and the Eas». The full cargo market is left open to America and Australia. Much tonnage is prepared to go to Australia in ballast, the present figures being 55s and 60s, according to the port of loading. The same figure- apply to South Australia, while the Victoria (November shipment) figure is i7f> 6d.