REVIVAL IN INDUSTRY.

New Zealand Herald, Volume LXVII, Issue 20520, 22 March 1930, Page 11

REVIVAL IN INDUSTRY.

GOOD HOPES IN BRITAIN.

EFFECT OF NEW BANK RATE.

WOOL MERCHANTS PLEASED. EARLY RECOVERY EXPECTED. By Telegraph—Press Association—Copyright. (Received March 21, 10.35 p.m.) LONDON, March 21. Wool merchants at Bradford believe that the reduction in the bank rate will react favourably on the wool market and news of the drop was well received on the Wool Exchange.

A leading importer said: " There is nothing now to stand seriously in the way of a revival in the wool industry. We are likely to enjoy cheap money for some months and there should be less restriction in the placing of new business.

Mr. George Whitaker, president of the British Wool Federation, saidlt seems that one reason for tho reduction is that money is not being used in industry. Tho drop will be an incentive to thus use it again."

The Daily Herald says the reduction in the bank rate foreshadows an extension of credit to an extent not reached for seven years. Rightly used, it should check the long decline in prices, which is the chief cause of the depression in industry.

LONDON BANK RATE.

FURTHER REDUCTION.

CHANGE TO 3i PER CENT. British Wireless. LONDON, Mar. 20. The discount rate of the Bank of England was to-day reduced from 4to per. cent. / The reduction was generally anticipated yesterday. Investment securities displayed activity and strength on the Stock Exchange. This tendency was also marked this morning before the announcement of the reduction was made. It is only a fortnight since the bank rate was reduced from 4£ to 4 per cent. The present alteration confirms the opinion then expressed by the Herald that. " there are substantial reasons for anticipating that the movement toward cheaper money that, has been so, pronounced since the beginning of the year has not yet reached its minimum." The rate was at 3A per cent, from June 15 to July 13, 1923, and was on the latter date reduced to 3 per cent., that rate being maintained for almost a. year, an increase to 4 per cent, being announced on July 5, 1923. The 3 per cent, rate marked the culmination of the recovery from the stringency created by the postwar slump. Bank rate was at 7 per rent, from April 15, 1920. to April 28, 1921; the descent to 4 per cent, was spread over a year, and the final steps to 3 per cent, over three more months. Reduction of the bank rate twice in a month is not unprecedented. In August, 1914, following the temporary application of 10 per cent., it. was reduced to 6 per cent, on the 6th. and 5 per. cent, on the Bth. The circumstances were then extraordinary. In January, 1914, the rate was reduced on the Bth from 5 to 4j pel cent., on the 22nd t0.4 per cent., and on the 29th to 3 per cent.. Following is a summary of the changes in bank rato from the increase to 5£ per cent, at the beginning of last year together with the amount of gold held by the Bank of England at corresponding dates: — icj29 Rate. Gold Holding. £ February 7 tv rr." Si 1^.91i,446 September 26 .. •• 6i 133,212,06 d October 31 ..i r.-. 6 ■ 332,141,823 November 21 r.v 5} 132 103.434 December 12 .a r.-. o i3<,404.4i8 1980 Februn'rv 6 v? rrv i\ 151,212,106 March 6 ,v 4 152 290 193 March 20 3i 1»4.245,3/o The London bank rate was at 2£ per cent, for a time in 1908 09. and at 2 per cent, for a long period in 1894-95-96.