TRADE AND FINANCE

Evening Post, Volume CXXV, Issue 152, 30 June 1938, Page 12

TRADE AND FINANCE

PRODUCE & MARKET REPORTS FROM DAY TO DAY

CREDIT CONTROL

COMMONWEALTH BILL

TRADING LIGHT

ATTITUDE OF THE BANKS

"Evening Post," June 30,

AUSTRALIAN SHARE MARKETS / (By Telegraph—Press Assn.—Copyright.) SVDNEY, June 29: Industrial shares were quieter on the Sydney "Stock Exchange today m view of the closing of the financial year tomorrow. Prices were generally steady. Taranaki Oils were active round 14s, closing at 14s 4d. Today's sales included:—

Proposals by the Federal Government of Australia for minimum deposits to be made by the trading-banks with the Commonwealth Bank axe the subject of much discussion in banking circles in Australia. Comment is fairly guarded, however, although Sir Alfred Davidson, general manager of the Bank of New 'South Wales, has spoken out frankly on the subject. The inevitable consequences of compelling the trading banks to keep a nercentage ol their deposit liabilities, as a cash deposit with the Commonwealth Bank,, he said, wouleT be a drastic reduction in advances. He" described the: proposed legislation as disturbing to the pifesent development of the Australian banking system from the lines of the weli-tried «id flexible English system, and to effect a revolutionary change, bringing undesirable rigidities which have proved so unsatisfactory in other coun"other bankers' views are in line: with those of Sir Alfred Davidson. For instance. Sir Howard Uoyd, chairman of the Bank of Adelaide, holds th at the minimum deposit plan would result in ajreduction of bank profits, a rise m advance rates to the public, and if the banks were forced to sell. Government securities to replenish their cash assets, a flaila in the market 1 values of these anffi other securities. . . Sit John Sanderson, presiding in London at the annual meeUng of the Banlc of Australasia, said that if legislation wafrequired, the existing.elas; tfcityl of the banking system, which had stood\ the country in good stead for many* years.shouidbepreservel „ Sir Uames Elder, chairman of ttie «a tional Bank of Australasia, mhisre'cent ikddress to Mel_,l held that the present powers of tlte Commonwealth Bank, were ntnpig for all reasonable purposes. Any nrimtio tis "to them could .be effected only bV irks olll6 legislatuve rßstric"nT the trading banks. It would of folly to attempt to demMd :?)r control of bankmg really exists." ', 'FALL IN ADVANCES. T4. t, n c been, ascertained on inquiries \eiannnnnn- if by 71 per cent., then hv '£37000 fl'OO. Between 192* and i i&i the Advances of the trading banks a sk fef' 00 2en o t. ' a^TducUonHi sioii years wis brought about by a reduction in W demand for accomodation in a; period of industrial infctfvlty A fafil enforced by the minimum deposit scheme would be cn the of the» banks, and thus would represent a.red action in the supply ot manded! & the "aarly stage, it fc suggested, the statutory deposit, msy no exceed l or 2 peir R. is .further proposed that a t«iding bank in need of funds shall be {(able to call for an ■advance from rate ; Commonwealth B Baiiking opinions elicited by , the "Sydney Morning Herald were to the effect that the trading banks will oppose strenuously wn at they regard as the principles of compulsion and of rigidity in the r.o ihimum deposits scneme. They, mui;t consider their statutory deposit a 4, something manently v withheld. lrom.the credit structure. That beinftt so, their liquid items, upon which Itheir abilrty to lend largely depends, .would-be, reduced, and only by tiuildmg them up till they reached the flotal held before the statutory deposit, was: subtracted could they restore advances to their old dimensions. . i„ , , . , It was argued that to demand minimum deposit fr6in a bank, and then to suggest that at might draw upon or borrow against that deposit in an emergency, introduced an element of speculation. Tbte Royal Conimissipn on Banking irecommended legislation to provide tHat the C,om- " monwealth Bank Board, 1-vith the consent of the-Treasurer, dould require the trading banks to mhke deposits with it, of an amount ntot .less than a given percentage of their liabilities to depositors. The C jovernment, according to a report earlier this year, has rejected the suggestion that the Treasurer's approval be necessary. It is believed that siuch a. provision might lead to political interference, which the Government is anxious to avoid. ■ . The New Zealand position is that under the Reserve Bank (Act, 1933, banks trading in this Donlinion are required to maintain mmi.tnum balances of 7 per cent, of thei(r demand liabilities-, or deposits on ciirrent. account and, 3 per cent, of tlieir time liabilities; on fixed depositsPRICE OF GOLD (By Telegraph—tresa .Assii.—Copyright.) , (Received June 30, 10 a.mjL) / LONDON, Jurj.e 29. The price of fine gold per' ounce, 140s Bid. s. .I '3. June 28 .!. 14(1. 9 June 24; 140 JlO--e 1 23. 140 9 , , June 22 140 10 June 21 140 \9 June 18. ... 140 ft June 17 ............ 140 IWJ June 1® 140 10 June 15 , 140 9 June 14 " 140 8 June 13 140 gi June 11 140 June 9 140 « June 8 140 5; June 7 140 7> June 3 140 v 9. June 2 140 8i June 1 140 It May 2 139 6i April . 1 . 140 Of March 1 J39 j|s February 1 139 7 January 3 139 5 Highest price in 1937, March 6, 14Ks 7Jd; average price in 1930, 85s per cfe. DOLLAR RATES. The Associated Banks (other than the Bank of New South Wales) quoted the following dollar rates today, on a New Zealand currency basis. They are subject to alteration without notice. U.S.A. Canadian Dollars. Dollars i (Per £1 (Per £1 N.Z.) N.Z.) Selling— . ' * T.T. 3.97 3-16 4.013-16 On demand .. 3.97 9-16 4.015-8 On demand ■ • 4.01 i 4.05 5-8

£ s. d. Bank of New South Wales 31 5 0 Com. Bank of Sydney ... "20 10 0 Bank of Australasia 9 15 0 Colonial Sugar 46 17 6 Australian Gas, A X 2 - 2 British Tobacco 2 7 o Tooth and Co 2 14 9 Tooheys, Ltd } 11 la Dunlop-Perdriau 11 " General Industries ...... • plf | General Industries (pref.) . 14 6 Kandos Cement f R. Fowler 0 114 W. Adams J> 16 9 Broomfields p ' « Felt and Textiles ......... 1" 9 Newbold Brick 1 " g United Provisions p ° " Goldsbrough Mort i n 71 Woolworths, Ltd. . .. •• • 10 'a Woolworths. Ltd. (2nd pref.) 1 8 u Electrolytic Zinc 2 1 0 Electrolytic Zinc (pref.) .. 2 5 6 Mount Morgan 0 8 J Mo,unt Lyell 17 4 Larut Tin " " ~ Placer Development £ " ° Emperor Gold -•••• ° 2 Loloma Mines i A * Taranaki Oil 0 14 MELBOURNE, June 29. On the Stock Exchange of Melbourne today leading industrials were inclined to ease slightly, but trading was still light. There was continued activity in Barriers. Sales'included: £ s. a. E.S. and A. Bank . •> ® ° National (£5 paid) » 13 o National (£lO paid) 13 ? _ British Tobacco ........... £ ' *j G. J. Coles •••••••■riv-r 420 Australian Iron and Steel 1 7 Q (pref.) 1 J ft Australian Glass * H , 0 Dunlop-Perdriau | g q GoldSbrough Mort ....... • Australian Paper Mfrs. 140 (pref.). • ••.• ........ 0 ,11 Herald and Times ... 6 1 National Reliance Invest- 0 g 3 Invest. Trust 0 3 0 Electrolytic Zinc § g 8 Mount Morgan « » 3 Pr^prie'taiV' '• '• |19 9 North Broken jHUI ........ f n 6 .Broken-Hill South n 12 7 Emperor Gold .._...••••••• 1 2 0 Loloma Mines . . FRICE AND RETURN t atpcf. sales reported and made on the Stok Exchanges of the Dominion, subject to appropriate taxes and exchanges where operative^ the cafe of redeemable security where dated, were as follows.— _ , Highest Yield price, p.c., p.a. • £ s. d. £ •• <1. Wellington. Inscr. Stock, 4 p.c., ... ( 15/2/43-46 ~, ...... a. 102.10 0 315 t Inscr. Stock', 4 p.c„ . .. 1 15/4/46-49 a. 102 10 0 314 J . Inscr. Stock, 3% p.c., . . Ifl , 1939-43 a. 100 7 8 310 , ; Eastbourne £ v Borough, 4% p.c., 15/12/51 a. 100 0 0 — , Bank of Austra- . ;Ba^ofjl hi : x"z? n G®Mantee"Corp. 0 4 4 014 J •N Z. Insurance • 215 9 ° " : • Huddart, Parker (ord.) 2 6 0 410 , i N.Z. Breweries ,• 2 2b * : Broken Hill Pty 219 3 4 4 4 1 Colonial Sugar ....... 46 11 3 i « j ' EleQtro. Zinc (ord.) .. 20 0 815 ( ' Felt and Textiles 1 ? ■ T»ranaki Oil 0 14 1 1 Woolworths,' Ltd. .... 1 0 6 313 ' Mount Lyell 1 6 a j i( Auckland. : Inscr. Stock, 3% p.c., ' 1 15/1/53-57 a. 97 5 0 — r Inscr. Stock, 4 p.c., . , 15/2/43-46 .:......a. 102 12 6 315 | Bank of N.S.W. ...u. 31 2 6 317 1 [ Union Bank 85 9 4 . l N.Z. Insurance ...... 215 6 1 : South British Insce. . 2 6 3 219 . N.Z. Guarantee Corp. 0 4 4 014 i [ Traders' Finance (7fl ~, : Bd'paid) ' 0 4 9. ■ 7-17 M . Westport-Stockton ... 0 3 7 — • Taringamutu Timber . 012 6 — i Booth, Macdonald i / riref ,1 0 2 1' ~" • Consolidated Brick ... 0 7 6 13 6 f , Electro. Zinc (pref.) -256 713 1C , Electro. Zinc (ord.) .. 119 3 818 4 ' Farmers' Trading 113 611 I • Moturoa'Oil 0 5 9 " Standard Cement .... 1 0 0 68 C ' Taranaki'Oil 0 14 0 5 Grey River 0 12 6 — . Martha -Mine .......' 010 9 Mount Lyell ........ 16 0 — ; Mount Morgan/ (ord.) 0 9 4. — . Chrlstchurch. , ' 1 Bank of N.S.W, ...11. 31 5 0' 316 t • Comm. Bank Aust. .u. 015 8 4 5 1 5 Bank of N.Z 2 211 413 5 ' N.Z. Insurance .....i. 215 6 312 C N.Z. Breweries ...... 2 2 6 4 0 fl Broken Hill Pty. 218 9 4 5 1 Dominion Builders .. 0 5 0 ' 10 0 C Electro. Zinc (ord.) .. 2 0 1 814 S I Electro. Zinc (pref.) ..2 5 3 714 S Goldsbrough, Mort ... 1 811 416 £ G. J. Coles 42 3 411 5 Taranaki Oil 0 14 1 — i, Wilcox Mofflin 0 6 6 — Woolworths, Ltd.' 1 0 6 313 2 Broken Hill South ... 110 8 — Westport-Stockton ... 0 3 7 — Big River : 0 11 —, Mount Lyell '...1. 16 6 —'' ; Dunedln. N.Z. Refrig. (10s pd.) 0 8 4 612 0 N.Z. Guarantee Corp. 0 4 5 6 12 ; 0 Electro. Zinc (ord.) -.. 2 0 6 • 8 12 10 Regent Theitre 1 0 6 616 7 Taranaki Oil 0 14 6 — Broken Hill South .. 1 10 0 — Mount Morgan 0 9 6 — North Broken Hill .. 2 4 0 — Wellington Alluvials .058 a.—Market price includes accrued interest but not brokerage, I.—Less English income tax. s.—Paid in sterling. u.—ln Australian currency. THE FRENCH FRANC Is : 5. (By Telegraph—Press Assn.—Copyright.) (Received June 30, 10 a.m.) LONDON, June 29. Sterling exchange' on Paris, 177 74! francs to £1. / i) Francs. a June 28 177 7-8 "1 June 17 fV May 4 168| • '• May 2 162? n April 25 165} 3 . April 1 162} 1 March 26 16315-16 March 8 15515-16 l - - Par with sterling, 124.21 francs tc I £1. JAVA EXCHANGE. » (By Telegraph—Press Assn.—Copyright.) (Received June 30, 10 a.m.) BATAVIA, June 29. r , e Sterling exchange, 8.94 guilders tc lk £1. g. The rate on June 28 was the same