LOAN FOR ITALIANS

Dominion, Volume 29, Issue 227, 22 June 1936, Page 9

LOAN FOR ITALIANS

Financiers Heed Chancellor’s Warning Note

NEED OF RAW MATERIALS By Telegraph—Press Assn.—Copyright. (Received June 21, 7 p.m.) London, June 20. While the city recognises the termination of sanctions is an accomplished fact, opinion is divided regarding the advisability of a loan to Italy to develop Abyssinia, which some financiers are already urging. Mr. Neville Chamberlain’s warning that the time is not ripe for the resumption of foreign investments is taken as ah indication of the Government view that there is no doubt, the loan would be highly unpopular with the country, as even a number of Conservatives consider the Government already has gone overfar in condonation of Italian aggression. Many city business men, however, urge that Italy’s economic position is so bad that only an extension of credits would enable the resumption of normal trade. Italian policy will probably concentrate on buying from those countries to which she sells most. Lack of foreign exchange is likely to lead Italy to intensify her efforts to increase her exports and strive to maintain the speeding up of the production of manufactures achieved during sanctions, as a result of which purchases of manufactures from other countries will probably be permanently less.

Italy’s Need of Wool.

Italy’s greatest need is raw materials, especially wool. It may be some time before she operates on the British colonial markets to any considerable extent, hut for the time being she is likely to be an irregular buyer in accordance with the exchange position.

Although the franc has responded to M. Auriol’s speech, late dealings showed little confidence in London that France would be able for long to avoid inflation. It is recognised that everything depends on the response of the French public to short-term bills, the issue of which will be accompanied by an unprecedented propaganda campaign. The city is more sceptical that success is likely to attend M. Auriol’s efforts to compel hoarders to disgorge or repatriate capital invested abroad. Events in France are keenly awaited, but the position at present is fraught with uncertainty. The wool trade welcomes the Commonwealth estimate of a three million bale clip, for despite the politico-eco-nomic troubles in Europe the demand Is well able to lift such quantities. If Italy and Germany return to the market the clearances will be even brisker. Traders hope that an Empire wool publicity campaign, to operate during the season will prove an important factor in increasing the demand. Return of,Confidence.

The stock markets are quiet, though there is a noticeable return of confidence and the public are becoming satisfied that there is no fear of a recession of the general level of industrial activity. The Rt. Hon. Reginald McKenna, speaking at Blackpool, expressed the opinion that recovery was likely to continue and there was no reason to expect the end of cheap money, which had been of incalculable benefit

The International Tin Committee will meet .on June 24 to decide the quota for the third quarter. No change is anticipated. 'Butter developed irregularly. Many traders feel the weakness has been overdone as the market seems sound enough. There has been little activity in the forward market. The fruit market is depressed, but as most coloured fruit is in an advanced condition it is essential to sell it immediately at whatever prices are offering.