COMMERCIAL SUMMARY

Press, Volume LXIX, Issue 21024, 28 November 1933, Page 13

COMMERCIAL SUMMARY

BAD EFFECT OF WORLD SITUATION BRITISH TRADE BETTER STRIKING RECOVERY IN TEXTILES (UXITED I'KESS ASSOCIATION—BY KLECTKIO 'iELEOBArH— COPYRIGHT.) LONDON, November 25. The stock market recently has presented a very dull appearance, which is not surprising when the uncertainties of the international situation are considered. A well-informed financial writer says the investment market is still apprehensive regarding the outcome of the dollar depreciation policy, and the French position is creating some misgivings. The virtual collapse of the Disarmament Conference is also a disturbing factor. Amid these surroundings the favourable trend of home developments, reflected in brighter trade and hopeful revenue returns, failed to have any beneficial effect. Such were the conditions prevailing till Thursday, when brokers and jobbers began to take a more optimistic view, and there was a general recovery. Prices, though business was not very active, were satisfactory. Australian and New Zealand stocks generally remained firm when British funds showed weakness. Australia's position is now regarded as most satisfactory and the newspaper comments are unanimously laudatory. For instance the Stock Exchange "Gazette" has an article headed "Australia Advances." Effect of American Policy. Although Mr Roosevelt's policy of depreciating the external value of the dollar is hampering the economic recovery of the world, it has had no great effect so far in Great Britain, but as the "Economist's" trade supplement says, the scope for further expansion in this country is definitely limited in the absence of improvement elsewhere. Moreover, the present level of activity cannot be maintained long in face of serious deterioration in other countries. For example, a further fall in the value of the dollar with a renewed decline in the purchasing power of agricultural countries might seriously weaken Great Brtain's export position. Busy Factories. Meanwhile as far as individual industries are concerned reports are satisfactory. Both in activity and volume of enquiry the revival in the engineering industry shows no signs of falling off. Motor-car manufacturers are working at full pressure and many firms have been compelled to increase their staffs. The value of building plans passed in October, though somewhat lower than in previous months, shows an increase compared with Octooer, 1932. The chemical industry has made further headway, and the pottery trade is more active. The shipping industry remains depressed, but recently there have been indications of a slight improvement with a hardening of freight rates. Boot and shoe manufacturers report a falling-off in demand, but news Irom the textile districts is encouraging. The wool and textile trade has experienced a striking recovery. The increase in demand for rayon fabrics has been maintained, and even the cotton industry appears to have made some headway both at Home and abroad. Retail trade reports have boon more encouraging in the last month, and present indications point to an improvement in sales for Christmas. Butter Prospects. The consumption of butter continues to be remarkably good, thanks to low retail prices. Some stores are soiling Australian "Kangaroo" brand at 91d per lb, and other sorts at lOd and lid. Several firms are packing Australian and New Zealand butter in lib and lib cartons, which is proving very attractive. But the market is overshadowed by heavy prospective supplies, no fewer than 1,170,840 boxes being afloat from Australia, New Zealand, and Argentina, and consequently prices of Australian and New Zealand supplies dropped 8s this week. Buyers showed more disposition to operate at these lower prices, but the ouUook is not regarded as promising. The egg market also is depressed for the same reasons. English and Continental supplies are plentiful, due to a continuance of mild weather. It is reported that 75,000 cases of Australian eggs are due to arrive next week. IRRESPONSIBILITY OF POLITICIANS AUSTRALIAN CRITICISM There is a feeling of resentment in financial circles at the growing tendency of politicians to shift their responsibilities on to the board of the Commonwealth Bank, and ask it to advance the money they need, states a Melbourne paper. Time and again the Loan Council has approached its problems in this way. The same thing has happened over the wheat question. Everyone surely agrees that it is unsound to pay bonuses on seasonable products out of loans, but the politicians hesitate to risk unpopularity by raising the money by a tax on flour, although the public to-day is paying a bonus to the butter producer and to the sugar grower through the enhanced retail prices on their products in the Australian market to compensate for the low prices abroad. If the bank refuses the accommodation that is sought it will have to bear the onus of causing a political crisis. It is unfair to place the board of the bank in this position. With a loan of £10,000,000 already launched politicians know the impracticability of floating a special wheat loan, and they know also that the Commonwealtn Bank has an agreement with the Loan Council that treasury bills shall be resorted to only for the purpose oi temporarily meeting deficits in Government accounts. The political difficulty looms ahead, however, and the board reluctantly decides that the bank itself shall make a loan to the Government. Will there be another similar loan next year extracted under similar pressure?