FINANCIAL OUTLOOK

Evening Post, Volume CX, Issue 48, 25 August 1930, Page 12

FINANCIAL OUTLOOK

AUSTRALIA'S PEOBLEMS

fNVESTMENT MARKET • IMPROVES

(Received 25th August, 0 a.m.)

LONDON, 23rd August,

Not for years have Australian financial affairs received so much attention in tinBritish Press as during the past week. First-came a series of differing forecasts of the Melbourne Conference decisions from various correspondents. Financial circles Were relieved by the decision, which was immediately published with the full official report of which adequate summaries appeared in the entire Press. The city generally having taken time to digest the report, has favourably received the decisions as evidence of a nationwide and common policy. ' The appointment of a committee representative of the States, as well as the Commonwealth, to carry out the decisions, is welcomed as proof that the problems are going to be tackled earnestly and effectively, leading to a steady, if gradual, movement towards equilibrium. In the meantime, despite some wild alarmist Press cables from Australia, responsible quarters never doubted that the recently consummated exchange pool ensures absolutely due provision for the.debt services. Sir Otto Niemeyer's approval of the Melbourne resolutions has naturally given added value to this, and leading authorities are convinced that if people will only accept the inevitable sacrifices entailed by the necessity for reducing costs of production, there will be surer confidence here in the Australian situation than there has been, for some time past.

Further, liquidation of industrial shares and the steady investment in the demand for gilt-edged securities have been features of the Stock Exchange during the past week. The firmness of gilt-edged investments is not surprising. It is a corollary of bad trade. Cheap money has been fostered by the holiday rest in the new issue market and the shortage of floating stock. This is practically the peak of the holiday season, a circumstance rwhich has been plainly reflected in the restricted chafacter of dealings. Australian stocks have shared with other gilt-edged securities in the steady imjjrovement during the week, and publication of the Melbourne Conference resolutions was only an additional contributing factor to the movement which had already begun in favour of trustee securities owing chiefly to the depression in industrials.