BRITISH FISCAL POLICY.

New Zealand Herald, Volume LXV, Issue 20104, 15 November 1928, Page 9

BRITISH FISCAL POLICY.

CHAMBERLAIN'S STATEMENT.

CANADIAN WHEAT POSITION*

(Received November 14, 5.5 p.m.)

MONTREAL, Nov. 13

In (ho course of an interview to-day-Sir Austen Chamberlain, British Foreign Secretary, said the policy of the Conservative Party in Britain was that whenever there was a duty . there should bo preference. At the next election he was convincd the party would refrain from proposing any new duties on loodstuffs.

Therefore the idea of any new preference on Canadian wheat must bo abandoned unless and until a, great change came over the British people. At presont it would ho impossible to carry such a proposal. Therefore it would be unwise to revise it.

OIL IN AUSTRALIA

BRITISH CAPITAL AVAILABLE

(Received November 14, 11.25 p.m.)

SYDNEY, Nov. 14

Overtures have been made to the New South Wales Government by a group of British investors anxious to secure the exclusive rights to territory which shows signs of oil wealth. The Government is desirous of encouraging British capital, but has decided to seek more information.

SYDNEY WOOL SALES

PRICES WELL MAINTAINED

(Received November 14, 11.5;> p.m.)

SYDNEY, Nov. 11

At the Sydney wool sales to-dav tho market was very firm. Prices were at the best point of the season. There was good general competition and good clearances. A total of 13,043 bales was sold. Greasy Merino sold to 30£ d.

AUSTRALIAN MONEY MARKET-

RETURN TO LOWER RATES,

An indication of the easier money conditions is the striking manner in which prices of Commonwealth bonds are being pushed steadily upwards, Messrs. J. B. Were and Son remark in a letter from 'Melbourne. The dulness in trade has liberated funds for .investment, although oiily temporarily, in liquid gilt-edged securities and while the industrial and political outlook has been so unsatisfactory and unsettled many investors, have been pursuing a policy of safety and confining their purchases to gilt-edged secu>'»- ' The upward, movement, has been assisted somewhat by the action of lho l'c-'cral Loan Council in raising to £99 the price of the 5i per cent. Commonwealth bonds beino- offered "over-the-counter" at all (lie State Treasuries for the loan purposes of the State Governments. Recent experience confirms the view that the price of the "over-the-counter" issues could bo raised to £IOO and the market could easily be lifted to a 5£ per cent, basis, with only moderate buying pressure, and the natural buying that may be expected duriiia the early part of 1929 should force it then toward a 5 per cent. leveL One difficulty in the way of the Commonwealth and States being able to borrow freely in Australia at or below 5 per cent, is the fact that the banks pay 5 per cent, per annum on deposits hxed for two years, and when rates for Commonwealth and State securities approach ■that level the tendency is for more money to be diverted to the banks. The latter have apparently "pegged'' their rate.at the 5 per cent, level, as that rate has been paid by most of the institutions during the past 20 to 25 years, although rates for State securities during that period have varied nearly 100 per cent.— from 3| per cent, to nearly 7 per cent., and Commonwealth Bonds have ranged between <H per cent, to about 6| per cent, per annum. , With the' huge 1930 conversion _ already commencing to loom on the financial hoi izon it is expected that the Commonwealth authorities will be forced, in the interests of a satisfactory conversion, to commence taking a personal interest in the market a very long time in advance of the date of maturity of the December 6 per cents. , „ The average return from the 17 tornmonwealth issues listed is now £,5 6s 7d per cent., as compared with an average of £5 lis 3d per cent, only a couple' of months ago. The extent of the upward trend is further illustrated by the fact that not one of the Commonwealth issues is yielding 5£ per cent. There is no reason why- prices in this section should no* further appreciate during the next few months, as although some of the banks are expected to be selling Commonwealth bonds when the financing of wool and wheat is in full swing, the .demand by then may be expected to have improved ■ sufficiently to counteract any such reahsmr of holdings • . The 1930 Commonwealth conversions comprise £10.750,420 of 6 n?r cents, due on March 15. and £61.917.750 of 6 per cents, due on December 15.