TRADE REVIEW

Dominion, Volume 14, Issue 305, 19 September 1921, Page 5

TRADE REVIEW

GILT-EDGED SECURITIES FIRM WILD FLUCTUATIONS IN EXCHANGE POSITION OF WOOL AND BUTTER By Telegranh—Press Association—Oonvrlant (Rec. September 18, 11.5 p.m.) London, September 17. The outstanding feature of tho Stock Exchange has been tho firmness of giltedged securities, which even the unsatisfactory Irish development has failed to affect. Tho chief cause for the firmness was apparently the removal of the selling pressure which previously existed and tho absorption of heavy blocks of Government issues which have been hanging over the market. Instead, there is now a persistent buying pressure in the investments markets. Another factor is the extremely easy conditions prevailing in the money market, as an instance of which three months Treasury bills were placed yesterday at an average rote of 6Q.6 per cent., compared with 119.3 on April 21. In marked contrast is _ the dullness in tho more speculative sections, in which prices are mostly tending downwards. Slump In Value of the Mark. The wild fluctuations in foreign exexchangos are mainly due to the heavy slump of the German mark, the cause of which is difficult to ascertain. In some quarters it is attributed to heavy reparations payments, and it is suggested that Germany may be trying to bring about a complete collapse of its currency, hoping thereby to secure a revision of the financial terms of the 'J reaty. On the other hand, it is stated that leading German bankers have given the Government assurances as to '(he provision of funds necessary for the next reparation payment on November 15. The Wool Market. A well-known wool authority says that the severe financial pressure continues to dominate tho situation in the manufacturing and wholesale selling sections. There lately has been more inquiry for export, but orders are principally filled from stock. Tho home trade is in the unfortunate position of being unable to find a market in America owing to the tariff and is also suffering acutely from the European exchange position Nevertheless the conditions are less adverse to improvement in business, and there are encouraging signs of gradual relief from < the more depressing features of tho slump. Tho progress is extremely slow, hut » gradual adjustment is being mads in the direction of reduced costs of production and for better wages, at Borne and on the Continent, which together will tend to lessen the existing disparity between Continental and Home costs. Provision Trade Depressed. A wave of depression is passing over the provision trade. Butter, cheese, bacon, lard, and eggs have all slumped, and despite tho considerable fall in prices there is little trade passing in any of these commodities. The position regarding butter is particularly unsatisfactory. The optimistic feeling prevalent among traders two months ago has disappeared and been replaced 'by doubt and nervousness. Many importers consider the present position is largely due to the mud-dle-headed policy of the Government in the handling of its stocks. After hurriedly rushing tho price up in July, the Government is now taking an equally hurried downward course. When prices were raised, many retailers, anticipating a further rise, purchased heavily. The public, refusing to pay tho high prices, retailers are now saddled with large stocks, on which tho loss is increased by each reduction in Government prices. So instead of Government stocks being steadly cleared, there are still thirty thousand tons on hand. Tho prospect of moving it seems remote, unless prices are further reduced. Consumers show increasing disinclination to pay tile present high prices, and though tho‘best New Zealand is obtainable nt 2s. 3d. per lb., consumption is small, housewives taking margarine, of which best brands are obtainable at Is. 2d. per lb. The newspapers are carrying on’ a campaign against high food prices, alleging that retailers are profiting excessively. and tho campaign undoubtedly is influencing the public—Aus.-N.Z. Cable Assn.