THE NEW YORK SITUATION.

New Zealand Herald, Volume LXVI, Issue 20242, 30 April 1929, Page 9

THE NEW YORK SITUATION.

INTERNATIONAL EFFECTS.

POSSIBILITY OF GOLD EMBARGO. Discussing tho effect on the exchanges and European monetary conditions of tho situation in America, the City editor of tho Times referred to a statement by the Governor of the Federal Reserve Board that " the Federal Reserve system had no intention of raising rediscount rates in tho United States until every other effort to keep commercial rates for money at a reasonable level by curtailing the speculative uso of credit had been employed," to which he added an appeal to tho speculator to restrain his ardour. " If this represents the policy of the Federal Reserve Board, it can hardly be regarded as impressive," tho Times observed. " The Inderal Reserve system, having failed to restrict tho speculator's operations, although it has caused him to pay more for his money than would otherwise have been necessary, can hardly expect the speculator to refrain from operations which up to the present have been profitable, for reasons that may not be very clear to him. It is not, of course, the level of rediscount rates in the United States which menaces the foreign exchanges ahd tho gold stocks of other banks, but the high level of rates in the open market—namely, moneys which are outsido tho control of tho Federal Reserve system. At present the only result of official policy appears to have been to benefit the owners of these free balances, which are able to command high rates. " Tho crisis in tho European dollar exchanges has given rise to somo strange comment in Wall Street. It has been alleged that the raising of foreign bank rates is part 'of a concerted action throughout the world to prevent the movement of gold from foreign countries to tho United States,' but it seems to be overlooked that tho still higher money rates which have prevailed for some time in New York are responsible for the present unsatisfactory position. These high rates have attracted largo amounts of foreign capital to that country, with tho result that the exchanges of most of tho important foreign countries have been depressed to a point making shipments of gold in a number of cases inevitable. If there was a real financial crisis in America which could be remedied by gold shipments, there would be little disposition to check the giving of such relief as was necessary, but there is no such crisis. The high money rates which rule in Wall Street, although international in their effects, are not international in their origin; they are due to a deliberate, though so far ineffective, domestic policy. While the principal reserve banks maintain a rediscount rate of 5 per cent., the banking authorities have contrived by restricting credit for speculative purposes in Wall Street to make money in the open market dear, but not expensive enough to stop the Stock Exchange boom. Nevertheless, it is these high rates in the open market that have disturbed tho equilibrium of the exchanges and menaced the gold reserves of other countries.

" Imports of gold from abroad bring no relief to the American situation, since the policy of the Federal banking authorities is to sterilise gold imports so as to prevent any relaxation of the monetary stringency in Wall Street. In these circumstances, it is not surprising that foreign countries should feel it their duty to protect their own gold reserves. If they failed to do so, they would accentuate" their own difficulties'by causing stringency in their own countries, without relieving it in America. Ihe raising of foreign bank rates is merely a matter of aclf-defence. Obviously, American policy contains a serious menace to the gold standard, and if ft were continued it would in the end cause other countries to take the extreme step of placing an embargo on gold exports to the United States." BREWERY AND MALT COMPANY. OPERATIONS IN DUNEDIN. [BY TELEGRAPH. —OWN CORRESPONDENT.] DUNEDIN, Monday. The third annual general meeting of shareholders in tho Dunedin Brewery and Wilson Malt Extract Company, Limited, was held this afternoon. There was an attendance of about 45 shareholders. Mr. C. A. Wilson, chairman of directors, presided. The report and balance-sheet showed that tho business of the company continued to make steady progress. Complimentary reference was made by the shareholders to the success of tho year's operations. A dividend of 8 per cent, per annum was declared. Mr. William Anderson was re-elected director, and Messrs. James Brown arid Company were re-elected auditors.

PRODUCE IN LONDON, l-RUIT MARKET QUIET. [BY TELEGRAFH. —OWN CORRESPONDENT. ] WELLINGTON, ilonday. The Department o£ Agriculture has received the following cablegram dated April 27 from the High Commissioner lor New Zealand, London Tallow. —No auction this week owing to the small quantities of fresh material at hand. Mutton, fine, is 6d per cwt. below last quotations. Other sorts are unchanged. . . Fruit. —The market is quiet. Ihe lonic consignment arrived in good condition except for a few cases being frozen. Only a little pit is showing. The Port Melbourne consignment was variable. Cox s Orange Pippin generally was pitted. Iho Auckland consignment is rather dull and lacks colour. Prices: Cox's Orange I'ip* pin, 15s to 20s, up to 22s a case; Delicious and Jonathans, 13s to _l6s, up to 17s; Cleopatra, 15s to 16s; King David, Ribston Pippin and Alfriston, 12s to 15s; Dunn's Favourite and Willie Sharp, lis to 14s. Pears: Bourre Bosc, 6s 6d to 7s 6d for single trays, 9s double trays; Winter Colo, 4s 6d to 6s 6d single trays, 7s 6d double traps; Vicar of Winkfield, 6s 6d double trays; Packham, 7s to 7s 6d double trays. Hemp.—Manila: The market is weak owing to tho continued heavy output and lack of support from consumers. Closing value "J" grade April-June shipment, £36 ' Sisal: Tho market is dull and easier. Kenya and Tanganyika No. 1 afloat sold at £37 10s; No. £3o 10s. April-June shipment is quoted by sellers at £3B to £36. New Zealand: The market is easier in sympathy, no interest being shown. Nominal comparative closing values about 20s below last week s figures. Tow: Unchanged. Wool.* —Bradford tops business is slow in Merino and fine crossbred. Medium and coarse crossbred are firm. Present quotations for 64*s are: Warp, 3s 7Ad to 3s 8d; average, 3s 6kl to 3s 7d; others unchanged. LONDON MEAT MARKET. Tho Bank of New Zealand has received the following advico from its London office as at tho close of business last week:—Frozen meat: There is a fair demand for wether mutton, lhc market for ewes is quiet but firm. 'llie trade in lambs is slow, owing to the cold weather. Tho beef market is'short of supplies and prices are nominal. Quotations: Wethers, light, 6d to 7£d per lb.; heavy, 4|d to s£d; ewes, to 6d; lambs, twos, 9|d to 9j{d; eights, 9d to 9id; fours, B£d to 81d; seconds, 9d to 9jd; ox hinds, 6d to 6-^d; fores, 4Ad to 4|d; cow hinds, sjd to sgd; fores, 4£d to 4£d.