BRITISH TRADE REVIEW.

Auckland Star, Volume LXII, Issue 45, 23 February 1931, Page 4

BRITISH TRADE REVIEW.

AN UNCOMFORTABLE WEEK.

ALL MARKETS NERVOUS,

AUSTRALIAN STOCKS VERY LOW,

LONDON, February 21

The Stock Exchange has passed through a very uncomfortable week. Both investment and industrial stocks have undergone serious depreciation, and all the markets I are in a nervous condition, following the I speeches by Mr. Philip Snowdeu and Mr. I Lloyd George. The Chancellor's announcement was regarded as an indication of his intention to impose additional taxation on unearned incomes. This brought about heavy selling of gilt-edged stocks, with a consequent fall in values. As the "Statist"' remarks, the markets have fallen a-victim to fears of the Budget, while the Labour Government's belated admission that a national crisis exists has been calculated merely to make matters worse, in the absence of any definite proposals to deal with the situation. With such conditions prevailing, it is natural that Australian stocks were further marked down. They were mostly lowered daily until yesterday, when the announcement that the maturing Treasury bills would be repaid had an immediate and salutary effect. Several Commonwealth and State stocks hardened as a result. It is believed there was speculative buying by professional operators. Such purchases are not surprising when

it is recalled that at recent prices some of these stocks give enormous returns. New South Wales 5 per cents, redeemable in 1932, could be bought at 80, to give a return of seven guineas per cent. The return is now 23% per cent, assuming repayment at 100 in 1932. Several other stocks will yield more than 10 per cent. Australian Exchange Steadier. The Australian exchange position at last begins to show slight signs of improvement. Some people are talking about the possibility of an early reduction of rates. It may be that the wish is father to the thought, but it is a fact that the outside market and banks in London are now charging the same rate, and it is reported that business has been transacted in Australia at rates lower than those quoted by the associated banks. The repayment of the Treasury bills is also regarded as an indication of an easier exchange position. Position of Wool Trade. A call for confidence in the wool market was made by Sir Thomas Wilford, Higii Commissioner for New Zealand, in the course of a speech at the banquet ot the British Wool Federation at Bradford. He said the warehouses were empty because the West Riding of Yorkshire lacked confidence and bought only from day to day. Prices, could, not possibly get lower. I he trade was waiting. Had not the time arrived to give all a clear signal that prices must move upward Mr. Deveveaux, on behalf of Australian growers, said wool values were a long way below the cost of production, although the graziers were using every method to reduce costs. These "and other factors were having a serious result, and many growers before long would come to the end of their resources and cease to produce. , 2 Topmakers, spinners and lnanutactureis could not be described as making fortunes, but there appeared to be plenty ot scope for bringing down the retail price ot the manufactured article. This would stimulate greater consumption. Mr Devereaux said this downward tendency had already started, not only in England, but abroad. He concluded by advocating a boldei policy and the securing and holding ot supplies of raw wool and tops to enable immediate advantage to be taken ot the improved demand. Butter Stocks Cleared. The consumption of butter has recently been on a large scale, and although the demand eased a little at the end of this week, it has been sufficient to clear tiie heavy arrivals. Nearly all the Continental countries are now on their owest production, consequently the demand fiom them has been maintained. Considerable quantities, especially of unsalted, ha\e been shipped from England. The weather, however, is compaiatn clj warm, and it will not be long before the Continental production increases _mateiiallv, so importers do not expect that tn~ present demand will continue much longer. The consumption in Britain appears to be increasing. The Marketing Board's efforts to popularise Empire butfers in the north of England are meeting with considerable success. A numbei ot large London stores are also pushing it Some of the Australian butter which th-.se stores are selling is not a good adveitisement for Commonwealth dairy farmers. With laudable patriotism, Sir George Fuller, Agent-General for New South Wales, ordered Australian butter from a large West End store. He received an article which had a very bad flavour, and promptly went to the store to investigate. He found that there was not a box of ■ first-grade butter in the place. All they had was second quality. As a result of S,r George's protests a repetition of this soit of thing is not likely to occur Retailers are now charging 1/3 a lb toi finest Australian, and 1/4 for New Zealand, -and about 2d less for second grades. Sharp Rise in Tin. A more optimistic feeling prevails in the tin market. Prices have advanced by ' rearlv £7 a ton in the week, owing to the expectation of the announcement made veste-dav of the Government s approval of : the tin restriction proposals. This caused milch activity in the market. Yesterdays turnover was nearly 1000 tons. According 1 to the "Morning Post," the reduction contemplated amounts to 22.3 per cent of the ' output in exports of the participant com--1 tries in 1929. This, it is estimated, will reduce production in the current year by between 145,000 to 150,000 tons, or rather lees than the anticipated consumption .so , the excess stock should gradually diminish.