MONEY AND MARKETS

Evening Star, Issue 22353, 1 June 1936, Page 9

MONEY AND MARKETS

ATTACK ON GOLD CURRENCIES RESUMED IMPROVEMENT ON BUTTER CONTINUES LONDON STOCK EXCHANGE INACTIVE Press Association —By Telegraph Copyright LONDON, May 31. (Received June 1, at 12.30 p.m.) The attack on gold currencies has recommenced. Tho Dutch authorities, alarmed at tho resumption of the gold drain, acted with their usual promptness and raised the bank rate, with favourable results. It is generally recognised, however, that tho Dutch and Swiss currencies stand to fall with the franc, which has developed fresh weakness, which only the intervention of London control kept within reasonable limits. It is now considered certain that M. Blum’s Government will early propose in Parliament mild devaluation. It is committed to a large Public Works programme, for which it relies partly on the expansion of credit through the Bank of France, and partly on public loans. It will not be surprising it devaluation is accepted without panic. The great financial interests which have been long prepared for it are now covertly advocating it. Tho Bourse is firm, despite the strikes. RISE IN IRON AND STEEL. For the first time for seven years a wide range of iron and steel products has been increased on an average of 5 per cent. Tho industry justifies the rise on the ground of higher costs of raw materials, especially pig iron and coke. The increases will considerably increase the cost of Britain’s rearmament programme, which, the ‘ Economist ’ points out, already totals 4.52 per cent, of tho national income—the highest percentage in history—and it is likely to reach 6 per cent, in two years. Steel shares improved simultaneously. TIN AND WHEAT DECLINE, A feature of .the commodity markets has been the heavy declines in tin and wheat. Confidence in the outlook for tin has disappeared, as the decision of the International Tin Committee to postpone fixing the quota, drew attention to tho dissensions among the various producers. BUTTER. The improvement in butter continues. Tooley street merchants consider that the market is heading definitely towards higher prices. The main activity is concentrated in New Zaaland descriptions. Australian butter is rather quiet. FRUIT. Arrivals of fruit are again very heavy. The proximity of Whitsun holidays resulted in easier prices. THE STOCK MARKET. Interest in the stock markets is negligible owing to the Derby and Whitsun holidays. *Gilt-edged securities remain weak, while industrials are barely supported. Australians are affected by the current dullness, but a leading firm of stockbrokers draws attention to tho discrepancy between Australian and New Zealand issues. It instances New Zealand 3 per cents, at £99 and Australian at £94. The firm points out that Australia has a record of conservative finance and shows a satisfactory export surplus, while New Zealand nationalised tho Reserve Bank and seems to have resolved on a financial dictatorship.