BRITISH TRADE REVIEW

Dominion, Volume 23, Issue 34, 4 November 1929, Page 11

BRITISH TRADE REVIEW

SPECTACULAR CHANGES ON STOCK EXCHANGE DEPRESSION FOLLOWS WALL STREET CRASH REDUCTION OF BANK RATE BRINGS REVIVAL A severe depression set in on the London Stock Exchange as a result of the Wall Street crash, but tha reduction in tha bank rate brought a spectacular change and a general revival of markets. (United Press Association.—By Eiectrie Telegraph,—Copyright.) (Rec. November 3, 5.5 p.m.) ■i London, November 2. This week has witnessed one of those spectacular changes which occasionally occur on the Stock Exchange. A severe depression had set in as a result of the crash in Wall Street, combined with persistent liquidation from Continental centres, and gloom reigned in every section of the exchange till the surprise reduction of 'the bank rate on Thursday caused a complete reversion of sentiment, and brought about a general feeling of cheerfulness and optimism. The Bank of England’s unexpectedly prompt decision was regarded as indicating confidence regarding the future, and immediately was followed by a general revival of markets. As a writer in the “Investors’ Chronicle” says, it appeared as if all the troubles were forgotten in a moment and the instantaneous effect on prices gave the bears very little chance of covering to advantage. It had been duly realised that the breakdown of the bull movement in the United States would prove a blessing in disguise. But for a time this aspect of the situation was overshadowed by the severity of the collapse, which has been unprecedented. Steps were taken by financial and even Government interests to restore confidence, but these did not have the desired effect until prices had reached a level from..which there was bound to be an upward swing. In Continental sources confidence also has beenurestcred to some extent after the weeks of depression had forced liquidation from Stockholm to Vancouver. The genuine investor as well as the speculator took fright, and despite many uncomfortable moments it may be said that on the whole the London Stock Exchange has come through the ordeal much better than could have been anticipated. It is, however, just as well to realise that much wreckage remains to be cleared and that but for the timely relief provided by the bank rate surprise, the forced liquidation which was. in progress would have made further serious inroads on quotations. More Cheerful Tone on Wool Market. The. Bradford wool market is showing a decidedly more cheerful tone than of late. Thanks in some degree to the reduction of the bank rate, which will, appreciably benefit importers in financing the large quantities of wool that have yet to be lifted, the Australian wool growers’ decision to extend the selling period is meeting with a certain amount of adverse criticism in Bradford. For instance, the “Yorkshire Post” says": “The decision appears to have been taken without any regard for the manner in which the wool textile- industry is conducted throughout the world. It seems to imply that Australian growers and selling brokers are under the impression that an even rate of wool consumption is maintained throughout the year. They ought to know that it is not so, because when some of their representatives were in Bradford two or three months ago, it was pointed out that there were periods when orders were placed freely for partially or fully-manufactured goods, and at such periods manufacturers wanted to cover requirements as quickly as possible. It was understood that growers’ representatives fully appreciated the importance of the point, and promised to do what they could to have ample supplies put on the market when required. The Australian wool growers have talked much lately about a campaign in favour of “use more wool,’ but before they have fairly started the scheme they resort to tactics to give their raw material an artificial value and refuse to let it find a sound economic basis at a time when consumers desire to make provision against the season’s trade, thus causing irritation.” Butter Prices Maintained. Butter prices, after being maintained at a high leved during the past month, are beginning to show an easier tendency, which is likely to be accentuated, as cable messages from Australia and New Zealand report rapidlyincreasing production. The first arrivals of new season’s Australian are giving general satisfaction. Small quantities of Australian eggs are now on the market and meeting fair demand, but prices are not satisfactory owing to the large supplies from other sources. Prices for Australians range from 15s. 6d. to 17s. 6d. per 120.