CONDITIONS IN BRITAIN.

Ashburton Guardian, Volume XLII, Issue 9373, 31 October 1921, Page 5

CONDITIONS IN BRITAIN.

ABNORMAL EASE REPORTED. (Per Press Association, Copyright.) (Received October 1, 8.30 a.m.) LONDON, October 29. Abnormal ease prevails m the money market, due almost entirely to the Government's continued heavy borrowing from the Bauk of England. The position is that » during the last two weeks the volume of Treasury bills for sale by tender has been much below the amount of maturing bills and the market's requirements m Treasury bills. The result has been that the treasuries have fallen to unremunerative levels, and the Exchequer is unable to pover maturities by the sale of new bills and is compelled to borrow on ways and means advances over and, above the amount of the revenue deficit. Experts consider the present ease is likely to continue. The "Statist" says that m a trade slump all commodity prices are fundamental factors which would ensure cheap money; apart altogether from the effect of the Government's artificial creation of credits. Therefore the ease is likely to continue till trade begins to revive or Government expenditure is again brought substantially below the level of the present expenditure. The Stock Exchange is rather firmer and more cheerful. The easiness of money caused a steady flow of investment of gilt-edged stock until the announcement of the £10,000,000 local loan stock, which curtailed business, causing investors to wait for the new loan instead of coming on the market to purchase new stock. Regarding wool, a prominent member of the trade says that 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. The margins of- profit are impossible under the present conditions, and the values of the manufactured product and raw wool do not meet the manufacturer's .complaint that the advance has checked new business, though a few weeks ago there were hopes of a new order on the basis of 42d for 64 tops. ' The conditions prevailing at the nrice of goods end of the trade are still far from satisfactory. The advance will, however, help towards better liquidation of old* stocks, although it hinders new business. Meanwhile manufacturers are still squeezed between the millstones of high cost of production here and the low price offered by competitors abroad. The most remarkable feature of the series just closed has been the absorption of proportionately large offerings of crossbred to which both Home and foreign buyers contributed. The only explanation of the broadening competition m crossbreds is their relative cheapness, which is creating a demand and encouraging confidence. Germany's firmness to secure supplies is amazing. Germany has taken m direct imports from South America during the year ended September 134,000 bales, the total of which is higher than any other country. Their mills are better placed with orders than any other country, and they have refused new. business. Their future looks rosy, but depends entirely on their ability to struggle through acute financial difficulties. It is evident that a lack of confidence m the mark is an inducement to many to invest m. raw materials, especially m yiew of the good trade experienced. The least satisfactory feature m the Home trade is the position of the manufacturer and the merchant of piece goods. Financial difficulties are, however, less acute and are gradually being alleviated, but the promise of a real revival has not yet materialised. . The position of the provision trade shows no revival, but seems to be going from bad to worse. Government stocks of butter are.moving very slowly, despite the further reduction of the selling price. Nobody seems to take any interest m this cold-stored stuff, and it is suggested that the Government ought to cut loose and cell it at any price or send it to famine-stricken Central Europe. The only satisfactory thing m the butter market is the good demand for small arrivals of new Australian, which are clearing rapidly. It is thoroughly unsafe to mention the word cheese m Tooley Street nowadays. Everybody who touches it seems to get bitten. Eight firms which combined to purchase Queensland's last output at 13Jd per lb f.o.b. finds it only saleable here at about 80s per cwt, so their losses-mußt run. into many thousands of pounds. People who bought Canadian also lost heavily. . Othter foods continue on thevjjown erade'and the public are.atrlast-'aMß.to act them at something approaching pre-war prices. Excellent butter is now being retailed at 22d and 2s a pound and cheese at 9d and Is.