BRITISH TRADE REVIEW.

New Zealand Herald, Volume LXVIII, Issue 20888, 2 June 1931, Page 5

BRITISH TRADE REVIEW.

RECENT FALL IN STOCKS.

CONFIDENCE STILL LACKING. LONDON 1 , Mas' 30. Since the resumption of business after Whitsuntide, the Stcck Exchange has been in u depressed condition, chiefly owing to unfavourable developments in Central Europe and further weakness in Wall Street. Even British funds, which recently have been so strong, showed some reaction. Foreign stocks were very weak on account of the Austrian bank failure and doubts about tlie German reparation payments. Yesterday, however, saw a little ray of sunshine and the markets were mostly firmer. The extent of tlie shrinkage in values on the Stock Exchange is revealed by the Bankers' Magazine in its monthly valuation of public securities, which shows that the market value of 365 representative securities has fallen during the month by £219,000,000. The decline, with the exception of that in November, 1929, following the great slump in New York, is the heaviest for many years and brings the aggregate value very near to tlie point at which it stood in 1922, when the Bankers' Magazine commenced its records.

Taking the general index number at December, 1921, as 100, the figure to-day is 103. In January, 1929, a few months previous to the coming into power of the Labour Government in Britain, the index number was .1.27. Sinco then it has steadily gone down to the present level. Reviewing the state of trade at Home and abroad tho Economist says: "During the past few weeks the business situation has disappointed all hopes of improvement entertained earlier in the year. The plain truth is that confidence is still lacking and the business world is • still waiting for something favourable to turn up, either in the political or the financial sphere. That is by no means a healthy atmosphere, especially when it is remembered that industrialists are already fully appreciative of their escape from further taxation in the recent Budget. " By itself the reduction in the bank rate proved of little direct assistance. It is doubtful if it has reduced the rate of charges on bank loans to more than a very, small minority of borrowers. It has, however, brought nearer the possibility of dealing with the 5 per cent, war loan, and taking the long view of a substantial conversion operation which placed the National Debt upon a 4 per cent, basis would eventually result in driving more long-term capital into industry and so bringing about a geneial reduction in fixed interest rates. " Here, however, the ouestion of confidence again arises. No doubt the recent strencth of British Government securities was largely due to the reluctance of the investor to venture his savings elsewhere."

TRADE SHIP TO, THE EAST. AUSTRALIAN PROPOSAL. A scheme to send an Australian oversea trade mission to stimulate trade with the East was submitted to a representative gathering of Sydney business men and manufacturers last week. The proposals were to transport a floating exhibition of Australian produce find merchandise to Japan, China, British Malay, Burma and India, to advertise Australian products, to establish new markets and to consolidate existing ones. The ship will be equipped with a publicity staff, an office and a bank. The idea is to enable manrfacturers to get in personal contact with business men in the East. The mission will be conducted on a co-operative basis, any profits being distributed among the participants. A committee has been set up to further investigate the possibilities of the scheme.

MINE EQUIPMENT. ' SOLD AT HEAVY LOSS. Equipment at the Pinnacles mine, Broken Hill, was sold at phenomenally low prices. A large Diesel engine was purchased by the City Council at a figure which is said to be about a tenth of its value. A hauling engine brought £l. The lease, with the buildings on it, was sold for £3O. The Zinc Corporation bought the tube mill, worth several hundred pounds, for £6. The City Council purchased the engine of the mill for £7OO. It is stated that it cost £4OOO and its installation by the company about another £4OOO. WESTFIELD STOCK SALE. Owing to the holiday to-morrow the weekly Westfield fat stock sale will be held to-day. BORROWING IN AUSTRALIA. NATIONAL BANK'S EXPERIENCE. Addressing shareholders at the annual meeting of the National Bank of Australasia, Ltd., held in Melbourne last week, the chairman of directors, Sir John Grice, referred to the many demands that had been made on the bank and the attitude that had been adopted by the directors. He said that were the banks at the present time recklessly to increase their lendings they would be in a position similar to that of the shipmaster who, in a storin, clapped on sail instead of shortening it, and by paying more attention to progress than to safety, imperilled the welfare of all on board. Figures were given showing the principal classes of advances by overdraft, the proportion which the number in each class bears to the total, and the average loan in each class, namely:—Primary producers 42.7 per cent, in number, average loan £959; mercantile 20.5 per cent., average loan £1027; secondary industries 3.4 per cent., average loan C 2077; professional and unclassified individual borrowers 31.2 per cent., average loan £373; Government and municipal 2.2 -per cent., average loan £1538.