PRICE RECOVERY

Evening Post, Volume CXX, Issue 155, 28 December 1935, Page 14

PRICE RECOVERY

HEADWAY IN BRITAIN

The London financial journal "The Statist" gives special consideration to recovery of commodity prices and efforts made to that end in Great Britain. In its annual survey of international banking it is pointed out that for eight months we have enjoyed exchange stability virtually equal to that it should have enjoyed had an effective gold standard been in operation. Under such conditions the level of international prices has staged its most pronounced advance since the slump of 1929 began. While the recovery has admittedly been due in part to certain ephemeral influences, such as the war scare, there have nevertheless been forces of a more fundamental character. In particular, there has been a genuine expansion in the industrial consumption of raw materials in the United States and throughout the sterling area. In the United Kingdom industrial production rose by 10 per cent, in 1934 over 1933 and during the current year is running at a level of 6 per cent, higher than 1934. In the United States the recovery has been even steeper. As between 1933 and 1934 the rise was one of some 4 per cent, only, while this year there has been a rise of some 10 per cent, on the corresponding 1934 figures. This tendency towards expanding production affords the real explanation of the current recovery in commodity wices. "The Statist" asserts that all purely monetary conditions for a further rise lin commodity prices are satisfied today.