EASIER MONEY

Evening Post, Volume CV, Issue 83, 9 April 1928, Page 12

EASIER MONEY

THE EUBBEE SLUMP, PRICES OF TIRES Australian Press Association. , (Received 9th. April, 9 a.m.) LONDON, 7th April. The most noticeable feature- of the short week on the London Stock Exchange has been the remarkable strength of all giltedjjed securities under the 'combined miiu*ccc of easy money conditions and the announcement that the revenue returns have shown a surplus for the financial year of over four millions. All British funds showed an improvement in prices. War Loan 5 per cent, stock reached £103, the highest quotation since 1924, and Colonial and Dominions Government securities have been in good demand at higher prices. There has also been a revival of activity in industrial shares.. The only weak spot in the market has been in the rubber shares, which slumped on Mr. Baldwin's restriction announcement, prices being marked down heavily, but without much actual selling. The rubber outlook at the moment is very obscure, and, as the "Financial Times" points out, the "decision to terminate restriction is too recent for reasoned views to have been formed." This journal continues: "The long view is that when the inevitable initial period of unsottlemcnt has passed and calmer conditions prevail then the strength of the British-owned rubber estates underl the new conditions will be realised, and market values will respond. The short view at the moment is that both commodity and share prices will decline; but even this, should not-be accepted slavishly." One of the most important Stock Exchange firms specialising in rubber shares mentions a heavy demand for United States account as a noticeable feature of the share market. Transatlantic interests are being prepared to take all shares offered at sacrificing prices. The same thing occurred in February, when the market weakened after Mr. Baldwin's initial announcement, from which one firm deduces that whoever may have lost} faith m the future of the British planting industry, it is not the Americans. The fall in rubber prices is causing motorists to wonder hoy/ long it-will be before' prices of tires are reduced. Inquiries pt a number of leading manufacturers have not resulted in any definite promise ot early reduction, although it is admitted that the question must be considered. The managing director of one tire company said no reduction is likely at present; but he is disposed to look for a possible 20 per cent drop in prices towards the end of the year, but not before.