TRADE REVIEW.

Taranaki Daily News, 1 November 1921, Page 5

TRADE REVIEW.

CONDITIONS AT HOME. MONEY EASIER. HEAVY BORROWING. By Teietraph—Preus Assn.—Copyright London, Oct. 29. Abnormal ease prevails in the money •narket, which is due almost entirely to he Government's continued heavy bornwing from the Bank of England. The K>sition is that during the last few veeks the volume of Treasury bills for ,ale by tender has been much below the imount of maturing bills and the mar* set’s requirement of Treasury bills. The •esult has been that Treasury bills have alien to unremunerative levels.

The Exchequer has been unable to rover maturing bills by the sale of new >iils, and has been compelled to borrow >n ways and means advances over and ibove the amount of revenue deficit.

Experts consider the present ease is likely to continue. The Statist says hat the trade slump and the fall of 'om modi tv prices are fundamental factors which would ensure cheap money, ipert altogether from the effect of the

iovemment’s artificial creation of credits, therefore the ease is likely to cons tinue till trade begins to revive or Government expenditure is again brought substantially below the level of expenditure.

The Stock Exchange is rather firmer and more cheerful. The easiness of money caused a steady flow for investment- in gilt-edged stocks until the announcement of the 20 million local loan stocks which curtailed business, causing investors to wait for the new loan instead of coming on the market to purchase new stocks. WOOL POSITION UNCERTAIN. Regarding wool, a prominent member of the trade says the outlook for the new year is somewhat obscure. Buyers are adopting a cautious policy for future business. The advance has been too large and too rapid for absolute confidence. Margins of profit are impossible under present conditions and the values of the manufactured product and of raw wool do not meet. Manufacturers complain that the advance nas checked new business, though a few weeks ago there were hopes of a new order on the basis of 42 pence for 64 tops. The conditions prevailing at the retail price of goods end of the trade are still far from satisfactory. The advance will, however, help towards a better liquidation of the old stocks, although it hinders new business. Meanwhile manufacturers are still squeezed between the millstones of the high cost of production here and the low prices offered by competitors -♦.broad. IMPROVEMENT IN CROSSBREDS. The most remarkable featnre of the series of wool sales just closed has been the absorption of proportionately large offerings of erossbreds, to which both Home and foreign buyer* contributed. The only explanation of the broadening competition in crossbreds is their relative cheapness, which is creating a demand and encouraging confidence. Germany’s eagerness to secure supplies is amazing. Germany has taken in direct imports from South America during the year ended September 134,000 bales, a total which is higher than that of any other country. Their mills are better placed with orders than those of any other country. Their future looks rosy, but depends entirely on their ability to struggle through the acute financial difficulties. It is evident that lack of confidence in the mark is an inducement to many to invest in raw materials, especially in view of the good trade experienced. The least satisfactory feature in the Home trade is the position of the manufacturer and the merchant of piece goods. The difficulties are. however, less acute, and are gradually being alleviated. but th< promise of a revival has not jret materialised. BUTTER AND CHEESE. The position of the provision trade shows no revival, but seemed to b#» going from bad to worse. Government stocks of butter are moving off very slowly, despite a further reduction of selling price. Nobody seems to take anv interest in this old storad stuff, and it "is suggested that the Government ought to cut the loss and sell it at any price, or send it to famine-stucke.n Central Europe. The only satisfactory tiling in the butter market is the good demand for small arrivals of new Australian, which are clearing rapidly. Jt is hardly safe to mention the word cheese in Tooley Street nowadays. Evervbodv who touches it aeems to g«t bitten. Eight firms which combined to purchase Queensland’s last output at 13y s d per lb, f.0.b., find it only saleable Jiere at about SO per cent, (3 7-8 d per lb), so that their losses must run into many thousands of pounds. People who bought Canadian also lost heavily. Other food' continue on the down grade and the public are at last able to get them at something approaching prewar prices. Excellent auttw now being retailed at Is 10d and 2s per lb, cheese at lOd and Is.