ECONOMIC CONDITIONS

Wairarapa Times-Age, 14 November 1938, Page 3

ECONOMIC CONDITIONS

POSITION IN CANADA STEADY INDICATIONS OF LATEST TREND. OTTAWA, Canada. Economic conditions in Canada during the first seven months of 1938 were remarkably steady from month to month. Conditions showed a declining trend during the latter part of 1937 and activity at the end of the year was considerably below the level of the first quarter. The Dominion Bureau of Statistics reports that stability has characterised the movement since the first of this year, monthly fluctuations having been of minor proportions. Considerable variation has been shown in the fluctuations of the major economic indicators. The index of the physical volume of business is at present very close to the line of long term trend of the post-war. The index averaged 110 during the first seven months of the present year. Marked declines were shown in this index during December and January, the reaction slowing up in the second month of the year. Since that time more favourable indications were recorded.

Common stock prices showed a marked recovery for three weeks about the end of the second quarter. A change in sentiment symbolised by the advance in stock prices suggested that the intermediate downward movement was reversed. The highest point,, in high-grade bond prices in recent years was reached in May, 1936, and the reaction from that high point has been of relatively moderate proportions. Measured by the amount of deposit liabilities, the chartered banks are in a strong position. The sum of the notice and demand deposits averaged 2,271,000,000 dollars in the first seven months of this year, a gain of 1 per cent over the same period of 1937. The gain in security holdings was also 1 per cent, the 1938 average having been 1,445,000,000 dollars. This increase was achieved despite a gain of 7 per cent in current loans, which rose to about 762,000.000 dollars. It is anticipated that in view of the excellent crops of the present season a further demand for commercial loans will develop during the remainder of the year. Call loans both in Canada and elsewhere reached considerably lower levels during 1938.