TRADE REVIEW

Evening Post, Volume CI, Issue 91, 18 April 1921, Page 7

TRADE REVIEW

BETTER FINANCIAL TONE

PROSPECT OF LOWER BANK RATE

HEALTHIER WOOL MARKET.

(nUITSB PRESS ASSOCIATION.—COFTMMT.)

(AUSTRALIAN • NBW ZBAI.AHD CAJLE ASSOCIATION.) -" LONDON, 16th April.

Under the influence of the threatened strike, business on the Stock Exchange has been most dull, but there has been no -pressure to sell nor a serious decline even in railway and industrial stocks, though naturally the tendency has been downward. What money is coming .into the Stock Exchange for investment is seeking channels outside those affected by Home Labour troubles, hence the noticeably improved prices in many foreign Government and municipal bonds, colonial and foreign backing shares, and the steadiness of colonial Government bonds. General satisfaction is expressed on the money market at the Government's reveision to the old plan of tendering for Treasury bills, of which fifty millions will be offered on Thursday. The new departure is regarded as virtually meaning the decontrol of the money market by the Treasury, and a step towards a freer market in money. The announcement is taken as another step towards a reduction of the bank rate, which many business men have been urging for a long time, and which many banks now favour. The general impression is that it will be reduced directly the present crisis is over.

The Wine Trade Review anticipates that the Budget will remove the ad valorem duty on sparkling wines, to be replaced by taxation on a sensible basis. The ad valorem duty has been an absolute failure from the point of view of revenue, and has done enormous injury to the wine trade with France and other countries.

The prices of Government stocks of first and second grade Australian butter have been raised 6s per cwt. The New Zealand is unchanged, and Argentina'has been lowered 9s. Traders anticipate that business will be slow iv the immediate future, as retailers mostly bought largely early in the month in anticipation of a strike.

A well-informed authority in the wool trade considers that though the immediate outlook is menaced by the industrial strife, which threatens to strangle the business, there is no doubt that the real state of the wool business is gradually becoming healthier, and the undercurrent of influence making for improvement will gather, force and ultimately lead to recovery. Stocks of merinos and fine crossbreds tops_ at Bradford are very low. A gradual liquidation is proceeding in every section of the trade, and with the. removal of the old high-priced goods the way is being cleared for a replacement on- safer levels. Financial difficulties are being readjusted after the disorganisation and anxiety caused by the sudden^drop in ,yalues and the settlement of the excess profits duty accounts. Now the costs of production and freights are gradually decreasing, and there are signs of easier financial conditions. The progress of all' these factors has been slow, but the general trend is towa-i'ds relief. , .

The metal markets, under the influence of the strike menace, are lV^arly at a standstill. The few transactions "taking place "are no real criterion of trade conditions. Only the fact that prices are cheap has prevented . a further decline in demand by consumers. Tifi and. copper are at a very low ebb, but the le-opening of. several tinplate works gives .promise of expansion if labour permits.