TRADE AND FINANCE.

Taranaki Daily News, 16 October 1922, Page 5

TRADE AND FINANCE.

AN IMPROVED TONE COLLAPSE OF THE MARK. BETTER WOOL PRICES. i By Telegraph.—Prass Assn.:—Copyright.. Received Oct, 15, 5.5 p.m. London, Oct. 14. The satisfactory conclusion of the Mudania conference had a tonic influence on the Stock Exchange, and business has shown a welcome expansion in most directions, the fresh slump in the mark and rumors of an approaching general election having been entirely counteracted by the good news from the Near East. Gilt-edged stock has led the way in recovery of prices, war loan and conversions loan showing much strength. Industrial stocks have also been active, notably “rubbers” on the advance of the raw material. A satisfactory feature is the success of the flotation of two good industrial issues.

The violent fluctuations of the mark overshadowed everything in the foreign exchange market. It is generally agreed that the main cause of the collapse is the uninterrupted activity of the printing presses. While they continue to turn out paper marks there can be no hope of recovery. The German Government’s action to restrict dealings in foreign currencies was in the nature of panic legislation, and financiers here ridicule it. The editor of the Statist writes: “Legislation of this character will not stop the fall in value of the mark, either at Home or abroad, even if it can be successfully put into execution. Similar regulations have been put into operation in many countries since the war, but in no instance have they achieved their object, except for a brief period.” The writer adds: “In the case of Germany, the over-eagerness of holders of marks to exchange them for foreign currency may have given additional momentum to the downward movement, but the root factor in the depreciation of the mark is the continued multiplication of units of currency, due to the Government’s inability to balance expenditure and revenue. Strict enforcement of the new legislation may arrest the decline for a brief period, and may even cause temporary reaction, but these measures cannot provide a lasting remedy for Germany’s currency disorganisation. The only real remedy lies in balancing the Budget or recovering the deficit by loan. In default of this the fall in the value of the mark abroad can only be prevented by a suicidal plan of stopping foreign exchange transactions altogether.” The advance in wool prices at the London sales has naturally given great strength to the Bradford tops market, and those buyers who have been waiting in the hope of getting cheaper wool ftave been grievously disappointed. Spinners who have been holding off are now obliged to purchase fairly extensively, although they still complain they cannot sell yarns at prices commensurate with the cost of wool tops. A feature of the wool sales is the growing American demand for crossbreds, following on the tariff deci-ion. This demand appears likely to continue to increase, and the outlook for crossbreds is more favorable than it has been for a long time past. The dried fruit market remains very firm for currants and sultanas owing to limited supplies, but Valencias are arriving in fair quantities. Prices are rather easier, and Australian agents have reduced Lexias by ss. Australian stocks arc now practically cleared, and no more arrivals are expected. Retail prices are very high, currants bringing '■from 9d to 15<1 per pound, sultanas 16d to 21d. and Valencias 14d to 18<1. There is little hope of any reduction in these prices, so the Christmas pudding will be somewhat of a luxury. The tin market shows a very firm tone on a good statistical position. The demand continues unabated in America, where consumers are buying heavily, there being a strong demand for future shipment. There are indications that producers in the east are holding up supplies for better prices. The demand for lead for home consumption and export is well maintained, the prospects as regards fresh supplies being very uncer-tain.—Aus.-N.Z. Cable Assn.