ENCOURAGING SIGNS

Manawatu Standard, Volume LII, Issue 245, 15 September 1932, Page 2

ENCOURAGING SIGNS

RECOVERY OF TRADE

PROFESSOR’S VIEW’

CHRISTCHURCH, Sept. 12. The recent rapid rise in the price of practically all raw materials is taken as a very encouraging sign by Professor A. H. Tocker, Professor of Economics at Canterbury College. He stated in an interview that there were undoubtedly still great difficulties to be overcome before complete world recovery could be assured, but every upward movement in confidence, every increase in price and every expansion of trade tended to lesson those difficulties and to make recovery easier. “While many people have been busy preaching the necessity for inflation or reflation as a remedy for tho depression,’’ stated Professor Tocker, “they have too often omitted to notice that others were quietly practising it. In the United States, particularly, there has been a considerable expansion of money and credit during the last year or two. In London arid other centres the rapid lowering of the bank rates, which in tho case of the Bank of England fell from six per cent, to two per cent, between February and July, has given a strong stimulus toward credit expansion. •‘Meanwhile there has been a marked recovery in confidence and there is now much evidence that a definite improvement lias begun. In almsot every centre for which records are available share prices are rising, which suggests that investors are becoming increasingly confident about the ability of industry to earn dividends in the future. In addition, an upward movement in prices has begun and has already extended over a wide range of commodities, including metals and raw materials, price movements of which are usually regarded as being sensitive of market trends.” Professor Tocker added that the monthly circular of the National City Bank of New York quoted live index numbers of American wholesale prices, all of which showed rises during July. In some cases the rises were substanital, as in tin, petroleum, sugar, rubber, meat and hides, where the improvement averaged more than 30 per cent. Raw sugar had risen by 93 per cent.

The latest Economist recorded a rise in prices expressed in gold for each of the four weeks to the end of July, and tho improvement there was strongest in the case of primary products.

“The improvement in wool prices at the Sydney sales should be encouraging to New Zealand, particularly when it is realised that most of the woolmanufacturing countries are buying,” ho said. “There has also been an appreciable recovery in dairy produce prices, duo partly to tho increased European demand for Continental butter and consequently a lessened ssupply of that butter in London. “An index of New Zealand share prices prep a red by Canterbury College shows that, on an average, these prices have improved about 10 per cent, during the last two months, and the improvement lias spread over a majority of tho shares included in the index.”