BUSINESS ACTIVITY.

Auckland Star, Volume LVI, Issue 243, 14 October 1925, Page 4

BUSINESS ACTIVITY.

IN THE UNITED STATES

WILL THE BOOM LAST?

(By PENLOO.)

On Saturday, October 3, all records since 1906 for a two-hour Saturday session on the New York Stock Exchange were broken, when tho total sales reached 1,274,400 shares. There is no doubt that the United States is revelling in a great boom, and this is spread over the whole country, for in their market report dated Xew York, September 3, Messrs. Maillcr and Quereau, commission merchants, say: —"Domestic trade is all that could be wished for, and there is a large demand for everything that is being produced, and as manufacturers secure better prices lor home trade than for foreign, they are well pleased with present conditions. They admit, however, that export trade is far from satisfactory, with very little demand from any country. Europe is now producing nearly all lines of goods at less cost than the United States, and naturally business is going in that direction. The one great handicap to lower prices here is the extremely high wages that are being paid in all lines of manufacture. While this condition continues it does not look very much like reduction in prices. Labour is exacting the utmost possible, both in high -wages and short hours, and as our immigration is limited, there is no extra supply of new labour coining in. Naturally the high prices existing operates seriously against export trade, and we find it extremely difficult to meet competition from other countries. We are approaching a season of unrest in a political way in our various States, end that always brings about unsatisfactory conditions with labour, as each party is anxious to secure the goodwill of the labourers." The Americans are enjoying a welter of high prices, high living, and high claims, and the conditions are not unlike what they were just nineteen years ago. On August 18, 1906, a record was established by the New York Stock Exchange for a two-hour Saturday session, when 1,603,430 shares changed hands. In the following year the boom burst, and hundreds of those mushroom institutions known as National Banks and ■ Trust Companies collapsed like cards. Brokers became frantic to quit shares which contracted with the same quickness displayed hy stretched rubber when released. Confidence vanished, trade -was slack, and unemployment a conspicuous feature of the cities. "Various devices and slogans were set going in order to restore confidence. The position was a very serious one, for there was a very great banking panic in America. There were very heavy exports of gold from London to New York, 'and the bank rate, which stood at 4£ per cent oh August 15i'lD07, -was raised to 5_ per cent on October 31, to 6 per cent on November 4, and to 7 per cent three days later, and was maintained at this high rate until the 'January following. The slump had to run its course, just 1 as'the boom did, and it was far-reaching in its effects, for it was felt out here in 1908. History may repeat itself, for the present boom which the Stock Exchange reflects is quite unhealthy. The one satisfactory feature about it is that the ascending prices for goods made in the United States' will keep them out of foreign markets, and afford European manufacturers an opportunity to regain some of their lost markets.