LONDON TRADE REVIEW.

New Zealand Herald, Volume LIX, Issue 18235, 31 October 1922, Page 7

LONDON TRADE REVIEW.

DISTURBING INFLUENCES.

EXCHANGES AND ELECTION.

TRADE REVIVAL NEXT YEAR. Bv Telegraph—Press Association—Copyright. A. and N.Z. LONDON. Oct. 29. The continued demoralisation of the mark, lira, and the French and Belgian franc is having a serious effect not only on the foreign exchange market, but also on the Stock Exchange, and worst of all, on our export trade. The depreciation of these currencies places Germany, Italy, France, and Belgium in a favourable position to compete with British exporters, by making it easier for those countries, to sell products abroad, but more difficult to purchase from us. Thus the revival of our trade is hindered, and similarly that of other countries with comparatively stable currencies which depend for pro* perity oh the maintenance of foreign trade. The decline of the French franc ap pears chiefly to be due to the growing appreciation of the country's serious financial position, and more genera] recognition by the French people that little is to be hoped for from Germany, an unpleasant fact which at last is being acknowledged by French newspapers, which hitherto havo blinded themselves to what other nations saw clearly. Revival in 1923 Predicted. The collapse of the mark appears momentarily to have been arrested by tho decision of the Reparation Commission to proceed to Berlin again to study the conditions, but no real permanent improvement is likely until practical measures have been adopted to stabilise the mark. With exchanges in this position ?t is not surprising that the foreign section of the stock exchange has been seriously disturbed. Large Bales of foreign bonds emanating from Paris caused weakness all round, and although the improvement in the franc caused a slight rally yesterday, markets are still depressed. Business on the Stock Exchange generally is suffering from the effect of tha general election, which is in full swing. Dealings have been on a small scale, but without any material decline, though the gilt-edged market was somewhat taken aback by the unexpected issue of the Indian £20,000,000 loan.

Regarding the future, a well-informed financial writer says that there is no doubt that the Stock Exchange is fully aware of the real revival of trade which appears likely to develop in 1923, as in all leading centres of the world supplies of finished material have been brought to levels that will mean a shortage before long. The world's crops are excellent, and the impetus to trade is likely to be considerable. No sharp rise in money rates is probable. There is plenty of money availablo to finance the trade movement. Strength of Wool Market. Regarding wool, Mr. H. Dawson writes that the sensational prices realised for Merinos were almost entirely due to scarcity, rather than to a new demand from the consuming centres. The position undoubtedly requires caution and cool judgment. The great question is whether business in textile goodr. can continue to be prosperous at such advanced prices. The preference for soft fine goods has been' so universal that there has been justification till now for appreciated values, but consumers are beginning to find interest in a cheaper article. This mcvement is bound to be slow and gradual, but already the disparity between Merinos and crossbred& has been greatly reduced, and the levelling up of, crossbreds has begun. It would almost appear that tho crest has been reached.

The strength of Merino wool on the market is all the more remarkable when it is considered that the Continental section has been seriously hampered during the past series on account of the constant fall of the franc and mark. It has been a great tribute to the strength of the industry that French and Belgian buyers were able to operate under these adverse conditions. Germany has been quieter than usual. Yorkshire, however, has shown remarkable activity, especially in all crossbred sorts, thanks to depletion of stocks at Bradford for export account. The signs for continued prosperity are all favourable, if the edifice does not topple over because of unsupportable prices. Consumption has been wonderfully maintained, and is undoubtedly great, including the United States,