FINANCE AND COMMERCE

Press, Volume LXXIII, Issue 22251, 16 November 1937, Page 11

FINANCE AND COMMERCE

SOME RECOVERY IMMINENT

DULL INVESTMENT MARKET

Though markets are as yet by no means healthy, some recovery is thought in England to be imminent, according to the week-end commercial summary. A definite lead from America is awaited.

The wool outlook is tat present obscure. No consuming country appears at present to be anxious to acquire wool, and some observers expect reductions of up to 25 per cent, in prices at the sales this week.

The higher retail price and the heavier arrivals expected appear to be the main cause of the reaction in the butter market. It is expected that values will come back further before Christmas.

The Christchurch Stock Exchange yesterday was quiet, with no great amount of business. Prices were erratic, but in general were fairly well maintained. In Australia also markets were dull in the absence of any overseas advices. Barriers were firmer in Melbourne.

PAYING FOR WAR

URGENT JAPANESE PROBLEM

DANGER OF INFLATION

Japanese financial authorities are becoming concerned about the inflationary effect of huge expenditures on the Chinese war. The Diet has authorised expenditures of about 2,500,000,000 yen (about : £A.187,500,000) for the campaign in North China, almost the whole of ■which is to be raised by loans. The "Oriental Economist," a leading Japanese economic journal, says the outlay should be met instead by an increase in taxation. The journal recalls that after the China war of 1894-95, Japan was paid an indemnity of £38,000,000, which paid for the war and left something over. During the war with Russia, Japan was able to float large foreign Joans. In the present instance there is hardly any prospect of receiving an indemnity, because China lacks financial resources which would make an indemnity possible. Likewise, there is- no prospect of obtaining loans abroad, for the Powers are not disposed to grant loans either to China or to Japan. Consequently, the country will have to rely exclusively on its-own productive power, and cannot count on foreign assistance, even for post-war measures, i "When there is a surplus in productive facilities," the journal continues, "bond issuance and currency expansion can be carried on without the danger of precipitating inflation. But now that productive capacity is given almost full employment, the flotation of large amounts of bonds and the expansion of currency circulation are almost certain to invite inflation. If Japan comes under inflationary influences of a vicious character, there is danger of the nation's, economic sta-. bility being disrupted and its vitality sapped. The Government seems to be i on the point of introducing import I trade control in order to balance international payments, and forestall a | decline of the yen in foreign exchange j (such control has since been introduced). 'lfi'fnflationr arises in these circumstances, not only will the yen fail to come down, but commodity values w,itt;«aove up, and thereby reduce thj:volume of exports. Imports will also then decline to the level of the curtailed exports. It is impossible I to have inflation and healthy foreign trade conditions side by side. "The fcotetidri lies entirely in in-I creased taxation, whereby the State appropriates and spends national income which the public would otherwise spend itself. The purchasing power which the Government appropriates an increased taxation is not thrown away, but is used for the purchase of , commodities or services, so that the community as a whole retains the same amount of purchasing power intact." The journal is critical also of emergency war measures to control finance and trade. It claims that if foreign trade, consumption, and many other activities, are placed under control, while inflation is allowed full sway, then a complete failure is inevitable. Several measures effecting the .control whch the "Oriental Economist" fears have been passed. The Temporary Funds Adjustment Law requires an official permit when financial institutions * intend to underwrite.' new securities or to finance the establishment or extension of existing plants. The purpose is to reserve available funds for financing vital industries and buying Government bonds. The Armament Industry Mobilisation i Law, which was passed in 1918, to be I applied only in. case of war, has been ! . revived. It applies strict and direct Government control over the armai ment industries, which may be managed, used, or expropriated as the Government wills. The law regulating imports and consumption empowers the Government to restrict or prohibit the import and export of certain goods to "safeguard the national economy," and to regulate the distribution, use, and consumption of specified goods. At present these specified goods are raw cotton, wool, and timber, but restriction has been applied to other' imports as well. The Temporary Shipping Control Law provides that Japanese ships must ' n °t. without Government authority, be transferred, chartered, mortgaged, or delivered to aliens, who are not allowed to own Japanese ships. The Government may lay down certain routes to be followed, and restrict or Prohibit shipping between foreign Ports, and may issue orders concerning freights and charter rates, and Prices for the construction and sale of ships.

MINING

MATAKI JUNCTION

The Murchison Mataki Junction return for the week ended November 11 was 750z of smelted gold for 124 hours and 17,000 yards dredged. '

\CLUTHA RIVER RETURN (fHISS iSSOCHTIOH TXLIGBAM.) DUNEDIN. November 15. 4v °« the we ek ended November 12 \ Jne Clutha River dredge worked 123 oours for 91oz of gold. IHATAKI . The•: Mataki return for the week •nded November 14 was 290z for 124 ■ours'work and 8500 yards. -

LEAD STATISTICS

to . LONDON, November 14. . "g lead returns are as follows: ih Sept. Oct. P t«« _i Tons, Tons. IP a?,??*?- •• 21,709 31,341 m Australian .. 8,432 14,230

COMPANY NEWS

E., S., AND A. DANK

LONDON, November 14. The English, Scottish, and Australasian Bank brought forward £306,787. Net profit was £276,126. Reserves take £65,000, and officers' provident fund £IO,OOO. Reduction in bank premises account is £30,000. Dividends, including the final of 3| per cent., are £171,935. The amount to be carried forward is £305,978.

CLAUDE NEON (N.Z.)

ITHE PfIESS Special Service.] AUCKLAND, November 15. The accounts of Claude Neon Lights of New Zealand, Ltd./ for the year ended September 30, show a net profit of £5564, an increase of £336 over the previous year. With £3449 brought forward, there is £9013 available for distribution. The interim dividend of 4 per cent, required £2241, and the directors propose to pay a final dividend of 4 per cent, making 8 per cent, for the year, unchanged. This will absorb £2522, leaving £4249" to be carried forward. Additions to general and special reserves amounted to £2392, including the premium on new shares allotted during the year. These reserves now stand at £7403.

BRITISH OVERSEAS

TRADE

CONTINUED EXPANSION

SHOWN

LONDON, November 14. Board of Trade returns for October show imports at £96,085,000, exports at £47,216,000, and re-exports at £5,698,000. The principal increases compared with October of last year are:— Imports—Grain and flour £1,121,000; meat, £1,161,000; dairy produce, £1,039,000; fresh-fruit and vegetables, £1,069,000; non-ferrous ores and scrap, £785,000; wood and timber, £1,751,000; wooL raw and waste, £914,000; rubber. £906,000; iron and steel manufactures. £1,381,000; non-ferrous metals, £1,626,000. Exports—Coal, £983,000; iron and steel manufactures, £1,144,000; nonferrous metals and manufactures, £923,000; machinery, £1,060,000 Re-exports—Non-ferrous metals and manufactures, £93,000. .jffhe chief decrease m exports was nTwool, raw and waste, £253,000.

BANK OF NEW SOUTH WALES

The Bank of New South Wales quoted the following exchange rat^^esterday^-

N.Z. on

FU £F .to £IOO N.Z. T.T. 90/7/6 89 £F ' ,to * O.D. 90/7/6 89

N Dol YO to"£'l N.Z. T.T. 4.0306 3.9960 Dol. to *i «-o OD 4Q406 40000

"SWT* K.Z.T.T.4.0.1 3.9947 AU sl t h rI g rto £ lN.Z.T j T. z |0.83 Be B S-lo £ lN.Z. T£ 23.794 23.484 Czechoslovakia— ,„.. Cms. to £1 N.Z. T.T.- 113.06 De K n X k^ £l N.Z. T.T. 18.203 17.893 *5S5£ to «»*.££-- HV.23

GermanyReich. to £1 N.Z. T.T. O.D.

Holland — _ . Flor. to £1 N.Z. T.T. 7.344 7.194 O.D. 7.384 7.198 Ifc Sre" to £1 N.Z. T.T. v O.D.

Java — Flor. to £1 N.Z. T.T. 7.323 7.173 O.D. 7.3C3 7.177

Norway— Kroner to £1 N.Z. T.T. 16.183- 15.893 O.D. 16.243 15.899

Sweden — Kronor to £1 N.Z. T.T. 15.787 15.492 O.D. 15.847 15.498 Switzerland — Francs to £IN.Z. T.T. 17.550 17.280 O.D. 17.655 17.285 Noumea

Francs to £1 N.Z. T.T. O.D.

Papeete— Francs to £IN.Z. T.T. O.D.

Hong Kong— N.Z. pence to dol. T.T. 18 7-16 18 13-16 O.D. 18 13-32 18 13-16

India and Ceylon— N.Z. pence to rup. T.T. 22g 22 21-32 O.D. 22 11-32 22 21-32

Japan— N.Z. pence to yen T.T. O.D.

Shanghai— N.Z. pence to dol. T.T. O.D.

Singapore— , • N.Z. pence to dol. T.T. 22 9-32 22 49-64 O.D. 22 3-16 22 49-64

Chefoo— N.Z. pence to dol. T.T. O.D.

18| 18 7-64

Manila — N.Z. pence to peso T.T. 29 39-64 30 7-64 O.D. 29 33-64 30 7-64

ASSOCIATED BANKS' DOLLAR RATES

'"•The Associated Banks (other than the Bank of New South Wales) ..quoted the following dollar, rates yesterday on a New Zealand currency basis. They are subject to alteration without notice:— U.S.A. Canada. (Per £1 N.Z.) Dol. DoL.

Selling— T.T. .. .. 3.99 11-16 3.992 O.D. .. '.. 4.00J 3.9913-16 Buying— T.T. .- .. 4.034 4.02 9-18 O.D. .. .. 4.044 4.0313-16

LONDON MARKING TIME

Lead From America Awaited

LOWER BUTTER PRICES

EXPECTED

(rjCITED PSE9S ASSOCIATION—COPYRIGHT.) LONDON, November 14. While investors have little cause for satisfaction in 'movements of the last week, they have rather more reason for hope. For technical reasons, if for nothing else, some modest recovery should be imminent. News from America encourages the hope that President Roosevelt has at last determined to make an effort to restore prosperity.

Pending a definite lead from America, London is tending to mark time. Australian and other Dominion stocks share the strength of giltedged. Foreign bondholders received a nasty shock from Brazil's default, which aroused the fiercest indignation. Industrials had rather an unsatisfactory week, and an increase of 50,000 in unemployment was hardly encouraging.

Commodity Markets

Fluctuations in commodities have been extremely marked and nervewracking. They seemed completely demoralised on Monday, with tin at £175 and rubber below 7d. On Thursday markets were as optimistic as they had been depressed on Monday, then ' again turned erratic. No doubt commodity and share markets washed out the favourable'news from the United States. Lead made a sharp recovery. A Break in Butter It is expected that the break in butter will be more drastic than most traders bargained for. A complete wave of pessimism swept markets on Monday, and holders became most anxious. Sellers' prices were reduced 2s at a time in an attempt to find new business. Prices now are largely nominal. Australian importers are finding difficulty in clearing current consignments, and there seems no doubt that higher retail prices in Britain have affected consumption. Heavier arrivals early in December may bring down prices a further 20s before Christmas., Danish also is lower. Germany refus-| ing to pay full prices.

Poor Wool Outlook The outlook for the London wool sales,is obscure. It is very difficult to estimate the probable demand, and nobody seems to need wool urgently at the moment. Some Bradford dealers expect merinos to fall 15 to 20 per cent., and fine and medium crossbred to fall 20 to 25 per cent. The setback in recent months has been so sharp that restoration of confidence is becoming urgent.

WORK OF WOOL

SECRETARIAT

VISIT TO YORKSHIRE COMPLETED

INSPECTION OF RESEARCH

ACTIVITIES

(raoM ocr own coSbbbpondent.)

LONDON. October 27. The members of the International Wool Secretariat have returned to London from Yorkshire, where they met leaders of the woollen industry, explained to them the aims of the Secretariat and removed misconceptions as to their proposed activities which have arisen since the Wool Publicity and Research organisation was formed. At Bradford they were met by members of the Bradford Wool Delegation, headed by Sir Harry Shackleton who assured the Secretariat that Bradford was sympathetic towards their work and would gladly asist with advice on any problems, Several mills were visited, in some of which manufacturing problems are now being attacked by modern scientific methods. . ... , "The main object of the visit to Yorkshire." said Mr F. S. Arthur, the New Zealand representative on the Secretariat, "was to investigate research work. It is hoped eventually to make the achievement of scientific research the basis of publicity. At the British Wool Industrie Research Association's laboratories in Torridon, near Leeds, and also at the Textile Department, in Leeds University, some extremely interesting work was found to be in progress. "At Torridon an unshrinkable process has been developed. It has reached the stage of commercial application, and holds out interesting possibilities for the development of new wool fabrics such as knitted cellular underwear and a variety of other manufactures, besides eliminating the common complaint of shrinkage in woollen goods. "Unfortunately, the development of other important discoveries at Torridon has been hampered by lack of staff and equipment, and there appears to be difficulty in inducing manufacturers to adopt new methods based on scientific research.

' "The Secretariat has at present under consideration financial support for such research work. It hopes also to provide a link between research work and manufacturers, and so endeavour _to reduce the time lag which now exists between scientific discoveries and their commercial application." The outstanding impression of the visit was the community of interest which was peen to exist between the nroducer in the Dominions and the British manufacturers, and the wide ImDerial imnortance of any factor which makes for the stability of the wool textile industry.

SALE OF BULLS

SMALLER ENTRY RECEIVED

H. Matson and Company conducted their annual bull sale on Saturday. As was anticipated, the entry was not as large as in recent years, the total entry being 74 bulls, comprising 46 Shorthorns, 13 .Friesians, 14 Jerseys one Guernsey, and three Jersey heifers. The demand improved as the sale progressed, and out of the total yarding only three bulls failed to change hands. Buyers were presenjt from all parts of the South Island, and strong competition was forthcoming when good Shorthorn bulls of either beef or milking strain came into the ring. Even bulls that were not well grown made good values. Prices all round were definitely on a higher basis than has been the case for some seasons, the top price of the sale being 33 guineas for a Jersey bull sent forward by H. D. Butterick, Elgin. - Principal sales were:—On behalf of H. E. Chamberlain (Ellesmere), 1 Shorthorn bull at 21gns; Bowis Estate (Doyleston), 2 milking Shorthorns at 23|gns and 22£gns; H. D, Butterick (Elgin), 1 Jersey, at 33gns; Cunningham's Estate ("Westburn," Brookside), 1 Shorthorn at 19gns; J. L. and J. Storry (Riccarton). 2 Shorthorns at 20gns and 24gns; John Mathers (Sefton), 1 milking Shorthorn at 18gns; H. Jarden (Opawa), 1 Friesian bull at 20gns; and F. E. Martyn (Rangiora), 2 Jersey heifers 16gns each.