BRITISH TRADE REVIEW

Dominion, Volume 22, Issue 72, 18 December 1928, Page 11

BRITISH TRADE REVIEW

STOCK EXCHANGE STAGNANT GILT-EDGED SECURITIES STEADY TALK OF INCREASE IN BANKRATE There has been little business on the London Stock Exchange, the chief causes being the King’s illness, the approach of the Christmas holidays, and the slump on Wall Street. (United Press Association.—By Electrit Telegraph.-Copyright.) (Australian Press Association.) London, December 15. Stagnation has reigned on the London Stock Exchange since the beginning of the month. Anxiety about the King’s health has been one of the chiel causes, while the approach of the Christmas holidays and the slump on Wall Street have also contributed to make things quiet. But while business has been restricted, gilt-edged stocks have remained steady, which is a matter for congratulation, as there has been such a considerable deflection of gold from the Bank of England that there is talk of a possible increase in the bank rate; not this year, but early in 1929, when- it may be difficult to keep the rate at. its present level. [The bank rate has been’4J per cent, since April 21, 1927, when it was reduced from 5 per cent.] Position of Australian Loans. In a long article headed “The New Position of Australian Loans,” the London “Economist” discusses the effects of the Australian Federal Government taking over the States’ debts. After expressing approval of the financial reforms carried out under Mr. Stanley Bruce, especially in furnishing information in the prospectuses and the provision for sinking funds, the .writer proceeds to say, “An important question remains—is Australia over-borrowing?’ He points out that 67 per cent of the net Australian debt was raised for purposes directly or indirectly productive, and he arrives at the conclusion that the test of soundness of Australian borrowing is whether the money is being spent productively and economically. The writer concludes: “The London market will take a more cheerful view of Australian securities when it-is. assured that reckless borrowing has given, place to wise ahd carefully supervised borrowing. There are signs of restricted.spending on tlie part of both Governments and individuals, while an exceptionally good rainfall in October has changed the seasonal outlook for primary production. Now. is the time, we suggest, for and the States to budget for surpluses, not deficits, and apply those surpluses to accelerate the repayment of debt.” Standard of Wool Values. Regarding the standard of wool values, the “Statist’s” Bradford correspondent writes: “There is far more faith to-day in current values than at last March, when prices were distinctly higher, and when a good deal of forcing tactics had been employed. To-day this feature is entirely absent, but all sections of the industry are satisfied that current values are high enough to be safe. Higher values will do more harm than good. It looks as if we are going to see steady values with consumption maintained and tending to improve.” Advance in Butter Prices. The butter market has shown great strength this week. Prices for all descriptions have advanced, and the rise is a genuine one, brought about by a real shortage. For some time past retailers have been working on very small stocks, and they appear suddenly to have awakened to the fact that prospective supplies are much smaller than they thought. There is also a great shortage on the Continent, and considerable quantities of colonial are being bought on this market by Germany, Belgium, Holland, France, Italy, and Switzerland. This demand appears likely to continue, and prospects for the next month or so appear decidedly favourable. the year finishing with the whole trade feeling fairly comfortable. New Zealand Fruit Season. In their annual review of the Australian and New Zealand fruit season, F, W. Moore and Co. call attention to the fact that New Zealand since June has enjoyed the advantage of the fav-oured-nation treaty with the German Government. Several other nations have a similar arrangement whereby they have to pay only seven reichsmarks import duty, roughly seven shillings per 100 kilograms, instead of 15, which is charged on Australian fruit. This, ; of course, only applies to fruit bought for consumption in Germany; but Germany, with a population of 60 millions, has a large number of potential buyers who hesitate to compete for apples on which the duty is roughly 2s. 9d. per case, and concentrate their attention on apples which under the favourednation treaty pay about Sd. per case lower duty. Commenting on this position, Moore and Company write; “The Australian fruitgrower needs to stir up the Commonwealth Government to follow New Zealand’s example. The Ministry of Markets in Australia should attend to this without delay.”