DRAIN ON STERLING CONTINUES

Press, Volume LXXXV, Issue 25705, 18 January 1949, Page 8

DRAIN ON STERLING CONTINUES

NOTE RESERVE REDUCED A further fair of £1,349,081 in New Zealand’s sterling funds to £42,155,424 accompanied the reopening of business in the New Year. For. three weeks the London funds of the Reserve Bank had been slowly rising, but the return for the week ended January 5, which would cover any half-yearly interest payments due on the first day of the year, shows that sterling holdings have shrunk to a lesser figure than at the beginning of December. Since the return of August 25, 1948, when sterling funds were first converted to New Zealand pounds at virtual parity, the bank’s sterling holdings have fallen from £63,537,071, a loss of £21,381,647 in a little over four months. At the same time the Dominion’s note issue has risen by over £4,000,000 to record figures. The current issue, as holiday demands relax, has receded from the previous week’s record level with a decline of £356,335 to £52,754,096. The loss of sterling and expansion of the note issue have brought <bout a heavy fall in the ratio of reserves to notes and other demand liabilities. In the first week of this year the ratio stands at 35.3 per cent. A year ago it was 57.2 per cent., and in January, 1947, 78.0 per cent. The minimum statutory requirement is 25 per cent. LONDON QUOTATIONS (N.Z. Press Association—Copyright) LONDON, January 13. Quotations for British and New Zea-

SHAREMARKET INDICES

New York.—Dow Jones (1926 equals 100) Shares

LONDON MINING QUOTATIONS (N.Z. Press Association—Copyright) ’ LONDON, January 14. Mining quotations on the London Stock Exchange are:— Broken Hill North .. .. 72 9’ Broken Hill Proprietary .. 48 0 New Broken Hill .. .. 35 7J ECONOMIST’S WARNING «BUSINESS CRISIS COULD BE PRODUCED ” Present economic trends and rising costs could well produce a business crisis of the 1930 type, and it might persist until business could readjust its costs, said Mr T. Hytten, economic adviser to the Bank of New South Wales, at the Science Congress in Hobart. One of the most obvious results of recent full employment had been the removal of one of the compulsions to high output—the threat of unemployment, he added. There had been some slackening of effort, leading to increasing industrial, costs and, in some trades, to inferior work. However, slackness by labour was not entirely to blame. An important factor was the shortage of raw materials.

land Government loans are:— Jan. 6 Jan. £ 3. 13 d. £ s. d Consols, 2£ p.c. .. 80 2 6 80 7 6 Fund., '60-90, 4 .. 114 5 0 114 5 0 War Loan, 3j .. 103 10 0 103 13 9 Brit., 31. con. .. 106 10 0 106 18 9 Victory Bonds New Zealand .. 116 3 » 116 6 3 1952-55, 3 .. 103 3 9 103 0 0

London.—"Financial Times" (1926 equals 100) In ds. Ord Govt. Gold. December 28 .. 120.6 113.58 95.37 January 5 .. 121.3 113.61 93.82 January 8 .. 121.3 113,71 93.37 January 7 .. 121.7 113.79 93.33 January 10 .. 121.8 113.76 92.22 January 11 .. 122.0 113.78 91.52 January 12 .. 122.3 113.76 89.29 January 13 .. 122.3 113.84 88.49 January 14 .. 122.1 113.84 88.06

Rails Indus Sold. December 23 . 52.67 175.98 1,650,000 January 5 . 52.56 177.08 800,000 January 6 . 53.62 180.22 1,115,000 January 7 . 54.28 181.31 1,400.000 January 10 .. 53.37 180.76 710,000 January 11 .. 53.37 180.76 710,000 January 12 . 53.35 180.69 710,000 January 13 . 52.90 180.17 700,000 January 14 . 52.38 178.80 930,000 January 15 . 52.75 179.15 270,000