The Daily News. THURSDAY, JANUARY 26, 1922. TRADE CONDITIONS.

Taranaki Daily News, 26 January 1922, Page 4

The Daily News. THURSDAY, JANUARY 26, 1922. TRADE CONDITIONS.

The latest review of the condition of trade and finance in Britain confirms the impression created by recent cables from London that a more healthy tone is manifest in several. directions that affect the Dominions. The state of t|ie money market appears to exhibit a much more favorable aspect than for some time past, there being plenty of capital awaiting investment, especially in what are known as gilt-edged securities, and the fact, that the British Govern: ment is able to replace five and a half per cent. Treasury bonds at 99, by an issue of five per cents at the same price, shows that money is cheapening. This is emphasised by the underwriting of thirty millions of three per cent, local loan stock at 57, as against 52 in October, and 50 a year ago. There is every justification for the bank rate being further reduced, but until' the rate in America is lowered it would not be good policy for the Bank of England to reduce the price of financial accommodation. The main point that matters is that there is plenty of money awaiting investment, so that, the Governments and local bodies in the Dominions have now far better prospects a I regards borrowing than has been the ease for a long while past. The tendency of foreign exchanges to become steadier is also a good sign, and there is little doubt that the efforts made to secure a lasting peace, to reduce armaments, to settle outstanding international differences, and to permit of stabilisation, are all having a favorable bearing on the money market. Of equal importance as a cause for satisfaction is the great strength which the raw material markets are exhibiting, especially in regard to wool. The persistent absence of competition for a somewhat lengthy period may be attributed to a concerted policy on the part of manufacturers to hold off from buying in order to bring down prices. 'The resumption of competition may, therefore, be taken to mean the determination of the producers to protect values by means of organisation and the control of supplies. The wisdom of that action is now apparent in the keen competition’ which has replaced the hand-to-mouth operations. Once this competition commenced among British buyers it was bound to spread to Continental and American operators, so that the outlook for wool may now be regarded as bright with promise. The growers have had a period of much worry and anxiety, so that the advent, of better times should be all the more welcome. Similarly the improvement in the demand for dairy produce, and the recovery of good sales and rising prices, will hearten up the producers after the depression that has existed for some months, and the clearance of the surplus stocks held by the Imperial Government still further improves the position. In no part of the Dominion will this change for the better be more welcome than in Taranaki, especially as not only have prices risen, but the demand that has set in, coupled with the desertion of margarine, would seem to indicate that the worst is over and the future assured. There is now a direct incentive to imarove New Zealand butter to the

point at which it will compete with Danish on equal terms. Here, again, organisation and judicious propaganda will be of immense service, and will repay the cost of a vigorous and well-directed campaign that will include foreign meat as well as dairy produce. Such a campaign would lay the foundations for business on the most advantageous terms, and be an immense asset-for the producers. So far as mutton and lamb are concerned there is now a much better outlook. In the ease of beef, the competition by the Argentine is, and will be, a severe handicap to Dominion producers. Yet they should not be discouraged. So long as they supply the market with the right kind end quality of meat it will in time meet• with recognition and grow into favor. The lifting of the depression appears to be the result of natural causes, and not to a spasmodic move resulting from a temporary cause. Hence it may be assumed that the producers are now on a better wicket, with the appearance of a long and profitable innings. Though the rate of run-getting may be slow, it, may liven up—and so may tbe producers at the change for the better.