IMPERIAL TRADE

Evening Post, Volume CIX, Issue 108, 9 May 1930, Page 10

IMPERIAL TRADE

POSITION OF PREFERENCE

BRITISH OPINION CHANGING

MONEY MARKET REVIEWED

In the course of a conversation with an "Evening Post" reporter to-day, Sir Mark Sheldon, chairman of the Australian Bank of Commerce, Sydney, was shown a cablegram giving the- result of the latest Queensland conversion loan of £3,781,000, of which the underwriters were left with 28 per cent. He said that could be taken as a guide to the state of the market iv London for. Australian loans. Sir Mark has just returned from London, and there were indications in the City when ho left that Australian demands for money would not be looked upon so favourably at the present time as those of New Zealand might be. This was evident from the results of the latest New Zealand loan.

Referring to Imperial preference, Sir Mark said no doubt that question would be raised at the coming Imperial-Con-ference. "Although previously the English Labour Party had said they would do away with this preference to the Dominions," Sir Mark continued, "I think that when that. Conference comes on at the end of the present year you will find that there has been-some marked change of opinion on preference in the ranks of the Labour Party. That change has been noticeable during the past-few months. Trading conditions and tariffs throughout the rest of the world are now attracting very keen attention in England, and so also are means of the closer development of inter-Empire commercial interests. The recent move of Lord Beaverbrook and Lord Eothermere is a reflection of this. ' Although their ideals were very high, still they attracted some following. It is now clearly recognised in Great Britain that it is vitally necessary to develop Empire markets. That is their hope. New Zealand, Australia, Canada, and South Africa, excluding the Crown colonies, are the young countries in the world to-day, and nowhere else in the world are such opportunities offering and nowhere else is there such a High purchasing power as in those countries, all of which lie within the British Empire. That fact is realised, too, to the full by all the thoughtful elements .in the United States. They recognise also the vast sources of rair products contained, within the countries forming the British Empire, countries among the richest in the world and still undeveloped.

"Tho integrity of these British. Dominions is recognised as very high, and in the next generation their trade will be sought by every nation in the world. There is a growing sentiment in England that England must be. the leader of this great band of countries. Generally the conditions in Great Britain are such that it must have export markets. With judicious handling of the question of preference at the next Imperial Conference, I think some mutually satisfactory conclusions will bo come to and that the position will be much strengthened." , .

BANK RATE AND EXCHANGE.

Asked about the recent fall in the bank rate of England to 3 per cent, and its influence on the loan market "for Australia .and Mow Zealand, Sir Mark pointed out that there was considerable popular misapprehension of the relation of the bank, rate to the supply of moucy available for loans and other similar purposes. "What the low bank rate really indicated was that there was a surplus of. money not finding immediate opportunities for employment. That did not, however, mean that the London market is prepared to take up fresh loans. It was all .a question of day-to-day money. All the world looked to London for the employment of its funds. When the bank rate was, low, as it was at present, it meant that there was inactivity in the- money market and really a want of confidence. People were placing money out from day to day at low rates because trade was inactive. When that was so, London became flooded with money.

In-.reference to the exchange position, Sir Mark was asked if he. could sec signs of any. alleviation in the immediate future of the present high rates, Australia, on London. He said: "I think we can look for some slight relief of the position about January next, but it will be very slight. -It will not come back to normal. In my opinion, it will probably take from January next to the end of 1932 bofore we get back to the rates of exchange to which we have been accustomed. " . ■'