CHRISTCHURCH WOOL SALE.

Press, Volume LXVI, Issue 19819, 6 January 1930, Page 10

CHRISTCHURCH WOOL SALE.

J SECOND OF THE SEASON. 1 ■ ! The second wool sale of the season for Christchurch will open in the Caledonian Hall, Kiknore street, tonight, commencing at half-past seven. On the whole the woo! is in quite satisfactory condition, quite up to the average, with some exceptionally good clips. Plains wool, however, is heavier than that from the high country; it is usually somewhat earthy, and anyone seeing this portion of the offering only, might easily get an erroneous impression as to the quality of the wool, generally, to be offered at this sale. The indications point to there being a full bench of buyers to-night and to-morrow, and it is thought that, prices will be about on the same basis ej those realised at the opening sale of the season. Up to the present local mills have bought very little, and thev may be operating at this sale. At the January sale last year 25,113 bales were offered and of these 24,530 were sold at an average price of 17,57 d per pound, the average price per bale being £23 7s od. At this year' 6 Jaminry sale, 34.021 bales will be offered, leaving over 8000 bales in store to await the third sale. The order of the present sale, and the number of bales to be offered by each of the selling firms are as follows : Bales. Matson and Co. ... _ 2,090 Pvne. Gonld. Guinness ... N.Z. Farmers ™ .... 5.163 Dateety and Co. ... „. ; 5,666 National Mortgage <». 2,243 N.Z. Loan Co. -. ~. 1.853 Total „ AUSTRALIAN SHARES. A DEPRESSED MARKET. In their last Stock Exchange letter for the year Messrs J. B. Were and Son, of Melbourne, review the effect of the year on Australian share values. The review states: — The course of events during 1929 so far as the Stock Exchange is concerned is indicated by the following facts. The average return from all Commonwealth loans as at January 17th, 1929, was £5 3s lid per cent. On December 19th it was £5 13s lid per cent. The following small table gives a comparison of interest rates obtainable in January and December by a few representative Commonwealth loans: — Eeturn p.c. as at Jan. 17. Dec. 19. Loan— £ a. <L £ b. d. Commonwealth, sJp.c, 1933 * 4 3 5 17 5 Commonwealth, 5J j>.c, 1931 5 16 516 2 Commonwealth, 5J p.c, 1941 5 5 8 5 IS 9 Commonwealth, 6 p.c, 1930 5 1 1 5 15 1 Gilt-edged securities have declined in market price at a rate corresponding with the rise in interest yields as shown above.

Company shares also have shown weakness. To take prices of a representative group of stocks (omitting mining issues) with a capital value of £44,286,199 at the beginning of the. year, the end of August (at which time the market was about top), at November 14th, and December- 19th, we find surprisingly wide fluctuations. At the beginning of the year the market placed a total value of £101,750,000 on the companies selected. By August 31st the valuation was £104,000,000, or £2,250,000 greater than 7\ months, earlier. On November 14th the valuation was £95,500,000, or a drop of i £6,250,000 since the beginning of the year, and £8,500,000 since; the end of August. The present valuation of £87,000,000 showed a loss of £17,000,000 since the end of August— £5,500,000 of .this within a little oyer a month> Le., since November 14th. This depreciation in value occurred on only 14 selected companies, and the total fall in value over the whole market is, of course,"much greater. At August 31st the shares selected, were standing at an average premium of 135 per cent. By December 19th this had shrunk to a premium of 96 per : cent. The fall in value shown has been 16J per cent.; every £IOO as at August 31st has now dwindled to £B3 10s.

The companies selected are:— (Banks), Australasia, National, New South Wales; (pastoral), Goidsbrough, Mort., Elder Smith; (brewery),.'Carlton; (shipping), Burns, Philp; (motors), Holden's Motor Body Builders; (general), Australian Glass, British Tobacco, Broken Hill Proprietary, Colonial Sugar, Mount Lyell, and Victoria Nyanza. Discussing the causes of this fall in values, the review says:Looking back over the year we can now see that the situation contained all the dangerous elements making for the complete reversal which has taken place. Australia was out of touch with world conditions, and getting more so>especially in regard to cost of production. We were living to a great extent on borrowed money, treating it as income rather than capital, which should be put to profitable use, and we were relying, perhaps unconsciously) on Nature to maintain her bounteous outpouring of new wealth, without which a continuance of the conditions at the close of 1928, even for a limited time, was not possible.

THE GOLD STANDARD. Notwithstanding that the exchange rates show that the gold export point has been exceeded, Canadian authorities deny that the Dominion of Canada has departed from the gold standard. They admit that there has been some restriction recently of gold' exports, consequent upon the abnormal situation, but state that the reserve required to enable the Dominion to remain on an absolute gold basis has been maintained, and the flow of gold between Canada and the United States has been merely dependent upon the exchange and business situation. The admission gives the whole ease away. Even did Canada possess a gold reserve, sufficient to encash every I>ominion note, the country. would not be an a. gold basis were the export of gold restricted. The essence of the operation of the gold standard is that there shall be free trade in gold, and this fact appears to have been . lost sight of or ignored in Australia. The ".Sydney Morning Herald" points out that with the increase in the*rate of exchange between Australia and London so that it costs £lO2 5s of Australian money to pur-. chaße £IOO of British money, combined with the fact that the Federal Treasurer, on the recommendation of the directors of the Commonwealth Bank, may place an embargo on the export of gold, Australia may be taken to be definitely off the gold standard. That is the position which should be faced. Australia is away from the corrective which automatically keeps price level in line, making allowances for tariffs, with prices of countries on the gold standard. "When, we decide to come into the standard again,"

remarks the "Herald," "we may find that it will be necessary to deflate in order to bring the price level hack to the world price level. Canada, as we have on other occasions pointed out, is also off the gold standard, and has been so cince the- commencement of September. The reason for the restriction is that high rates of interest for short-term investment in New York was drawing abnormal amounts of Canadian funds thither with the danger of heavy gold shipments."

TARANAKT OIL FIELDS. IfKESS kSSOCU.no* TELEGRAM.) GISBORNE, January 4. Taranaki Oil Fields, Ltd., reports:— ' Gisborne No. 2 Well—Water shut off and caving -in overcome with mud. Drilled to 3213 feet through sandy shale; noifc in hard material with increasing gas.