CRISIS AND FINANCE

Hawke's Bay Tribune, Volume XXVI, Issue 80, 16 March 1936, Page 7

CRISIS AND FINANCE

CITY PRO-GERMANISM British Interests Abroad INFLUENCE ON MARKETS (By Telegraph— Press Assn., Copyright.) (Received 16, 8.30 a.m.) LONDON, March 10. The pro-Germanism of many City business men in the present crisis is the natural result of Britain’s investment policy before Hitlerism. Millions of British capital is at present locked up in Germany owing to the Nazi Government’s exchange and other restrictions. Investors on the whole, realising that their hopes of again seeing their money are slender, are naturally opposed to any policy which might destroy them altogether. Britain's financial stakes in Franco cannot similarly be considered. The recent £40,000,001) loan to France is secured on the Bank of France’s undertaking to maintain, for the duration of the credit, balances in sterling and gold in London equal to tho outstanding amount of the loan. The City is also influenced toward Germany by tho Bank of England’s notorious admiration of Dr. Schacht’s financial abilities. It remains to be seen whether Dr. Schacht’s reported estrangement from Herr Hitler will influence the Bank of England’s attitude.

Lloyd’s premium for war risk for any of the nine principal European Powers for three months is five guineas per cent., but the rates are expected to rise, not because the risk is considered to be becoming worse but because the market in such speculative insurances is most limited. A rate of half a crown per cent, was accepted to cover a large amount of mechandise at Strasbourg against war perils. NO TRACE OF PANIC. The “Economist’' declares that the behaviour of the market has afforded reassuring evidence that London continues to possess the qualities appropriate to an international financial centre in time of crisis. Though considerable soiling developed lato in the week-end, there was no trace of panic Gilt-edged foreign bonds declined appreciably, but Dominion issues wero firm. The heaviest falls were recorded in industrials, many of which lost two mouths’ gains. The future course of the markets cannot be predicted, but it is generally agreed that if the international situation clarifies tho strong undertone evident last week will lead to a rapid recovery.

Commodity markets naturally swung the opposite way from the Stock Exchange, but a sober determination to await events prevented spectacular developments. The downward movement of foodstuffs continued. Butter especially was irregular. Australian choicest salted was quoted as low as 83/- during the week. The weakness was due to the continued lack of support from the general trade, which seems to lack confidence generally. Tooley Street merchants considered that buyers will, at least in the immediate future, operate on a hand-to-mouth basis, as a result of which there is no prospect of appreciation. Supplies of meat at Smithfield continue in excess of requirements and prices eased .

WOOL MARKET'S STRENGTH.

The opening of the wool sales justified expectations. A well-known broker, commenting on the growing shortage of supplies, declared that the sheep are nearer the machine than ever. The “Financial Tinies” reports an enormous demand for woollen manufactures, especially cheaper qualities, which are regaining popularity at the expense of rayon. Unemployment in the wool trade was halved during the year. The Associated Press Association understands that the pace of the London sales was set by the Continent, especially Russia, which was taking all qualities at good prices. Bradford was buying considerable weights of crossbreds but little merino, presumably because topmakers feel it impossible to make higher prices. The trade is speculating how far the international situation is responsible for the present activity, but it is agreed that merinos are unlikely to weaken for some time. The majority of buyers appear not to be influenced by politics, but are guided simply by the healthy statistical situation.