TRANSFORMATION

Evening Post, Volume CXI, Issue 151, 29 June 1931, Page 12

TRANSFORMATION

KISE M PBICES

EFFECTS OF HOOVER

SCHEME

(B»celve<T 29tlr June, 9 a.m.)

LONDON, 27th June.

' Not for many years has there been such a marvellous change in financial and commercial conditions as' was witnessed, this week following President Hoover's dramatic announcement of a proposed one-year war debts moratorium.

-A week ago the-Stock Exchange and most commodity markets were ; plunged in gloom and despondency, everybody fearirigwhat was going to happen in Germany. On Monday there was a complete reversal of the position. Everywhere Mr.' Hoover's proposal is acclaimed with enthusiasm.

practically every .market rallied sharply. Almost every section of investments in the Stock Exchange list advanced. . Wheat, cotion, rubber,1 copper, zinc, tin, and silver all rose considerably in price. The only commodities that failed to respond were perishable ■ goods, which were mostly in such plentiful supply that an advance was impossible. These good conditions continued throughout the week, markets yesterday closing firm. ■ * •

The' Stock Exchange official list shows many extraordinary rises in prices. The most marked, naturally, have been foreign stocks, with Germans leading. British funds, although firm, have been somewhat disappointing, and this is probably due to the approaching end of the half-year and mistrust of the Government's financial intentions.

Dominions Government stocks 'made a fine recovery, and they were materially assisted by the announcement of the British Government's concessions..

A satisfactory feature,of the improvement is the advance in prices of several Australian bank shares, which are usually quoted in London. For some time past the market for these shares has been very depressed. [..>■ Mining shares also improved considerably on the rise in the prices of metals. Financial circles have been discussing the probabilities of an early reduction in the Bank of England rate. Many thought that it was likely to be made last Thursday, owing to the growing strength of the Bank of England's position, thanks largely to the heavy gold influx from Germany. The reserve of notes in the banking department is now £71,182,000, the highest ever recorded, and the stock of gold is £162,----894,416, the highest since May_, 1930. But, although the position is soi strong, the bank authorities have exercised discretion, waiting until it is definitely known ■what, the French attitude towards .the Hoover- proposal- will be. Now that_ the French Chamber has accepted it, it is generally anticipated that ttie bank rate yill be reduced to 2 per cent, next week.