COMMERCIAL AND FINANCIAL THE CIIY.

Evening Post, Volume LXXV, Issue 24, 29 January 1908, Page 3

COMMERCIAL AND FINANCIAL THE CIIY.

The continued spoil of dry weather is bow beginning to havo an appreciable effect upon the turnover of tho distributing houses. Country storekeepers and retailers are restricting then- orders to littlo better than hand-to-mouth supplies ; consequently wholesalers are oxpenonolng a rather quiet time. These remarks apply particularly to tho grocery and hardware sections,. In other trades business is plentiful, but monej is somewhat tight. This latter scarcity very probably is caused by the large withdrawals of wool from tho local sales this season. In tho two previous seasons the prices obtainable locally wero relatively higher than London, •uid growers uid not hesitate to quit their v/00l as soon as possible. Many of the biggrowers have shipped to London thia season, sooner than accept the lower values ruling The total clip in the Dominion must be worth, even at the reduced values, between six and seven millions, and most of this will not be available -for a month or six weeks. Advances are on a much •mailer scale this year. As wool constitutes in value nearly one-third of our exports, tho postponement, even for a month or two, of the operation of converting wool into cash will account for tho temporary tightness of monoy. TOE FINANCIAL OUTLOOK.— A feature which will tend to greater monetary easiness is the increasingly strong position of the Bank of England. Tho discount rate is now reduced to 4- per cent., but it is still 5s per cent, above the open market. The Bank, during the ,week, increased its sto:k of bullion by over a million and a half, and in comparison with a, year ago its bullion resources are greater by almost four millions. The Bank's proportion of reserve to liabilities now stands at the exceptionally high orie of 54.87. Last year at this period tho proportion was only 48 91. If bullion keeps flowing in at tho rate it is doing tho Bank will bo bound to follow the market,, and it would not be surprising to see a 3 per cent, rate ruling. "With such a rate in force -the Australian and New Zealand banks would not find ' London such a profitable outlet for their surplus funds. The banks havo made huge profits in London during the last couple of years, and it is ' really time a, larger propo v tion of their loanable resources wns available- for the development of legitimate enterprises out here. Heuco it may fairly be assumed that the sooner London assumes its normal financial oondition tho better it will be for the trader of tho Dominion, whose facilities have been restricted to enable the banks to participate to the fullest extent in fhe golden harvest to be reaped in the world's greatest money centre SOFT GOODS.— Tho soft goods houses will bo showing their winter goods next month, and deliveries commence on Ist March. All over the Dominion, for somo months past, tho soft goods importers have been shipping cotton-piece goods to Sydney and Melbourne under drawback. Cotton-piece goods are now 20 per cent, cheaper than they were last year, and the only way importers could avoid serious losses was to ship the balance oi their stocks and obtain a refund of tho duly. The shipping companies quoted freight and a half for tho carriage from Now Zealand to Australian ports and return. The Customs took every care to prevent the department being exploited, and insisted upon the original labels and numbers being attached to each piece — m addition to inspecting the original invoices. Even with a refund of duty the wholesale houses incur loss in the shape of /freight, cartage, wharfage, etc, which \in the gross must be a considerable sum. GRAIN AND PRODUCE.-The grain and produce trado not unreasonmbly anticipates another period of scarcity and high prices. Just at present, however, values are in somo cases -very reasonable. For example, feed oats are down to 2s 3d or 2s 4d for fair quality, anc( even highgrace, suitable for milling purposes, aro qu6tsd as low as 2s sd. Oatmeal will pro- > nably see a lower range of values, but >it is difficult to get fixed quotations for quantities from southern millers. Meantime it may bo quoted at £14, f.o.b. Flour is unchanged at £11, f.0.b., less 2£ per cent. Potatoes are not in plentiful supply, and at the auctions last week as much as £15 per ton was paid for new. Maize is firm at 4s lOd, and feed barley at. 33 9d has with many poultry-kceper3 taken the place of fowl wheat, which thia eeason has been almost unprocurable. Chaff looks like going to higher prices, values ranging now from £4 to £4 se, f 0.b., whilst millers are not able to fill all their orders for pollard at £5 10s. HEMP.— The High Commissioner's .cable, dated London, 25th January, shows that the quotation for good fair grade January-March shipment is unchanged at £28. Millers appear to be showing a "readier disposition to meet the market. Merchants and shippers, in consequence, aro fixing up contracts for fairly extensive shipments of February-March # on basis of current prices.^ Authorities agree that the present price of New Zealand hemp is a good one when the price of Manila is borno in mind. Only a few years ago it would have been deemed an extraordinary achievement if tho New Zealand fibre had realised within £5 of Manila of equal grade. The consistent quality and high tensile strength of phormium have evidently forced the product into a high position which makes it sought for by manufacturers, oven in tho face of a heavy production of Manila. Life insurance offices are perhaps the first to feel the pinch of bad seasons and the last to benefit by good ones. It is satisfactory therefore to learn that the Australian Mutual Provident Society wroto a greater volume of new business in 1907 than in any previous year. To secure in twelve months £4,850,000 of new insuranco shows that Australia and New Zealand have enjoyed remarkable prosperity. 1906 was a splendid year for the society, but e,ven that year's record fell short of last year's performance by a quarter of a. million. WOOL. — Dalgety and Co.'s revised estimate of the Australasian wool clip ?h ,ivi -i decrease of 40,000 bales, and this ay oiiifcinrnt._ backed up by the easier ,r-onetary conditions should have a powerful effect upon the future sales in' Londoa. This feeling^ has induced many .•trong shippers to withdraw a number of clips from the January sales, and they propose to submit them at the second series which opens on 17tb March next. Opinions are practically unanimous that prices have bottomed,' and that the tendency from now on will be in favour of sellers. The Times # (London) of 13th December, in an admirable articlo on tho position of the wool trade, emphasises the increasing consumption against which there is no likelihood of more ampie supplides. It points out that the decrease in tho European domestic clip is inevitable. In the German Empiro alone tho flocks have decreased by 3,000,000 sheep in seven years. Of special importance to the New Zealand grower _of crossbred wool is the lessoned export from tho Argentine, where theofEcial figures show a decline in production of no less than one-third since 1901. There is not only tho increased demand arising from tho natural increase in tho world's population, but a larger consumption per head ; a most important consideration. Without an increase in supply any reduction in the cost of raw material can only be of a temporary nature. Tho contention of those who would accept the prices of today -as an approximate future standard is based on stronger ground than tho claim of others who, reasoning from past history, prophesy lower values. Tho article goes on to say that a much greater quantity; of wool than was formerly the case is placed upon the markets, in London and Australasia, between • the months of Novembor and May, and imposes a correspondingly heavy strain upon financial resources. During this period the trade is extremely sensitive to outside influences, and it is at such time that the weak holder becomes of such temporary importance that ho may provo as dangerous to the most powerful concerns as a 500-ton derelict to an Atlantic liner In a falling market the man with £10,000 capital, who imports £40,000 worth of wool is quickly in difficulties, and the effect of a few forced sales can easily assume proportions not in tho

leasfc commensurate with tho actual size of the transactions themselves. Thr» Times proceeds to state that the contributing causes to the decline in values wero the financial crash in America, with its resultant dearness of money, and concludes by the striking remark "that tho trade must soon contemplate a considerable, perhaps a sorious, falling off in production." A recovery in values is regarded as probable rathor than possible, (or an examination of tho causes which have brought about an advance in tho cost of wool of 56 per cent, in 12 years permits "the bolief thai ideas formerly existing as to tho normal average cost of the raw material must ba adjusted lo suit a new soalo— tho result of greatly increased consumption — to meot which ri'> increase in production appears possible." Mr. Stringer, secretary of the Auckland Freezing Works, in an interview, has expressed himself very plainly as to some of the disabilities exporters of Now Zealand meat labour under. He stated that it wan well-known that Now Zoaland meat suffered yory # considerable loss through the freezing industry not being directly interested at Home. At present nearly all the agents at Homo had no special interest in Now Zealand^ ijjeai — that was, no interest more than in tho moat from Australia or tho Argentine, and were not concerned that. New Zealand meat shoUld be sold mora than any of the other meats. There was not atlompt on tho part of tho ugent3 to do more than simply effect sales at such a pries as would commany an easy and ready sale for whatever articlb they had ut their disposal. Thore had never been any practical interest on the part of the agents in solving difficulties of_ tlio trado or in findmg new markets or in placing any .brand at a prico fcommonsurato with its quality. There was no one at Home to study and open up now -markets and report as tv the various causes which led tn the extraordinary fluctuations #in prico from time to time. Then again, there was no ono to report on the actual statistical position from time to timo, and consequently tho high prices which might be realised in the market were seldom gained by the shipper, and there was no. one in authority to advise in reforenco to tho propoi dischargo of tho perishable goods, it was well known that tho freezing companies in New Zealand took the greatest care 'in tho slaughtering, dressing, freezing, and shipping of meat, and it was put on board in a thoroughly clean condition, and well frozen, but ''some of those interested in the industry who had been Home reported that it was painful to &co the carelessness displayed in the discharge of tho moat and the filthy condition in which some of the carcases arrived. All the»o matters could t»e improved if there was some one with authority to act for the companies. These wore the arguments for co-operafcion. It was not a combine, but dimply a co-operation for tho protection of tho industry. As a matter oJ facv, ttio co-operation would bo of more benefit to the producer than to any ono else, foi \t would mean that with betjer markets at Home the sheep-breeder would realise a better prica here. There was no idea of increasing the freezing charges, anil, is a matter of fact, the co-operation should reduce the charges, because by leading to better trade on the Home market, and therefore increased consumption, it would mean larger quantities going through, and it always followed in freezing that the larger tho quantity handled the cheaper the freezing could he done. THE "WORLD'S DECREASING WHEAT.— Last July (says Beerbohn's of 13th ' December) we gave our usual estimate of tho probable world's wheat production for 1907, the total being 388,750,000qr ; later and fuller knowledge shows the probable total to be 388,000,000 qr., being thua the smallest since 1901. It is, we think, very doubtful whether the world's consumption of wheat of late years has kept pace with the growing needs of consumption, which increases under the normal conditions at the rate of about 1£ per cent, per annum. This subject affords an interesting study, and to aid our readers in arriving at some conclusion on the subject wo give below the world'e wheat production since 1893, v/itla the world's visiblo supply on Ist December m each year. Ono remarkable result is that after tils' record crop in 1906 the world's i isible supply is this year (1907) tho smallest on r.ecord einca 1898: —

\V odd s. World s Wheat Ci op. Visible* Supply. Qrs- Qrs. 1907 .. _ .. .. 288,000,003 .. 15,750,000 L 906 411,500,000 .. 39,335,000 1905 422 615,000 .. 17,615,000 L 904 401,800,000 .. 18,£65,0C0 LSO3 411,500,000 .. 16,650,030 ISO 2 399,100,000 .. 19.045,000 LeOl 367,500,000 .. Z1, 150,000 1900 342,3E0,000 .. 20,850,000 1899 360.0r0,0C0 .. 20,250,000 1838 .'. ..\. .. 365,000,000 .. 13,600,000 L 897 .295,000,000 .. 13,500,000 L 896 342,000,000 .. 19,300,000 L 895 325,000,000 .. 22,500,C00 1894 330,030,000 .. 25,100.000 1893 320,000,000 .. 25,600,000