BRITISH TRADE REVIEW

Dominion, Volume 23, Issue 104, 27 January 1930, Page 11

BRITISH TRADE REVIEW

BUSINESS ON STOCK EXCHANGE DULL FALL IN AUSTRALIAN STOCKS THE WOOL MARKET i Business on the London Stock Exchange lias been dull, but prices generally are steady, exeept for Australian and Indian stocks. Australians have receded further in price, Commonwealth 5 per cents, being particularly weak. (United Press Association.—By Electric Telegraph.—Copyright.) (Rec. January 26, 5.5 p.m.) London, January 25. The hope expressed a fortnight ago that the decline in Australian Government stocks would not continue unfortunately lias not been realised, and prices of most of these have receded still further. Commonwealth fives are particularly weak. Sales of these were made yesterday as low .as £B6, a fall of fully £9 compared with six months ago. Writers in financial newspapers attribute the decline to sales by nervous holders on apprehensions regarding local politics, but tnere are other causes. Undoubtedly one of the chief of these has been the collapse of the wool market and the effect that it must have on the earning power of banks and pastoral and other companies which to a large extent depend on wool. . General business on the Stock Exchange has been very dull. It might have been thought that the combined effect of the satisfactory ending of the Hague Conference, the easy monetary conditions, and the announcement that the Hatry Group settlement had been fixed would have been to rouse the markets from their lethargic condition. The fact is that apprehensions of what the Budget may bring forth and the continued dullness of the Wall Street market have combined to counteract all favourable factors. The only matter for satisfaction is that prices generally are steady, except for Australian stocks and Indians, which naturally have suffered as a result of Gandhi’s latest announcement. No Change in Bank Rate. Our monetary conditions are as easy as any. This week’s bank return reveals a very strong technical position, a reserve of £64,889,435 being recorded. In these circumstances disappointment is expressed in some quarters that the bank rate has not been reduced, but best-informed financial writers consider the Bank of England directors wise in maintaining the rate. Their action is apparently due to caution inspired by the further decline in American exchange. and though recovery is expected by the end of the month, the directors are wisely not taking risks. Development of the Empire’s Trade. The British Empire’s Trade is not developing at a rate equal to the average for the whole world. The League of Nations has just issued a review of world trade from 1926 to 1928, according to which it appears that the growth by value of the total trade of the British Empire for that period amounted to only 2 per cent, compared with an increase of 8 per cent, for the whole world. The relatively slow development of the British Empjre trade is attributed largely to the contraction of trade in Australia and the low prices for crude rubber. Despite this, however, New Zealand and Canada have the largest foreign trade per head of population, namely—£6s and £56 respectively. Position of Trade in Britain. The “Economist’s” monthly survey of the state of trade says:—“The New Year opened with feelings of distinctly qualified optimism. It was believed that the progress made during 1929 had fallen considerably short of anticipations, but insufficient allowance possibly has been made both for several factors which place current statistics in too unfavourable a light and also for the effect on trade of any disturbing influences of the year. There, however, is no gainsaying the fact that the approaching Budget and the general position of the national finances are viewed in industrial circles, with considerable apprehension, and this is having a bad psychological effect on trade.” The Decline in Wool. Discussing the wool situation a Bradford correspondent says : —“The decline in London has not made trading conditions better in. Bradford, where there is at present no sign of a movement to take advantage of the current low prices, but spinneys make no secret' of their intention to buy heavily when they are satisfied that the decline has reached its limit. The position of the wool market again brings into prominence the justifiable complaint that while raw material has sagged 'back to or somewhat below the level of values current before the war, there is no sign of the advantage of cheap raw material being reaped by the ultimate consumer of wool commodities. It is pow becoming recognised in Australia, as in Bradford, that excessive retail charges for wool attire constitute the sole serious impediment to that free flow of manufactures into the hands of the public which is essential if the industry from the wool-grower onwards is to operate in a sound and healthy manner. There is a block in the stream between the manufacturer and the public, consisting of excessive charges, which raise the cost of clothing so high as to curtail demand. Long charges rather than short dresses have been the cause of the sluggish demand in wool textiles.”'