THE MONEY MARKET

New Zealand Herald, Volume LXIX, Issue 21358, 6 December 1932, Page 5

THE MONEY MARKET

FEATURES OF LONDON WEEK

WAR DEBT UNCERTAINTIES FINAL SUCCESS OF CONVERSION LONDON. Dec. 3 The conversion loan scheme was brought to a triumphant conclusion on December 1, when a turnover of more than £600,000,000, (lie largest amount recorded in any market, was completed without disturbance, in spite of war debt uncertainties and exchange complications. An expected increase ol" market supplies and credit has not materialised, as the authorities have been for many weeks purchasing unconverted war loan, testifying to the care and skill with which the entire conversion was planned. War debts have overshadowed the markets. Gilt-edged movements have been unusually wide, but thorn is not lite slightest evidence that confidence has been affected. The City was admittedly more concerned in honouring the obligations to America than in the economic' consequences thereof.

Recovery in gilt-edgeds significantly followed inspired reports that Britain would pay if America insisted. The fall in sterling is out of proportion fo the actual business transacted. There is no evidence of flight from fixed interest securities owing to inflation fears. On the contrary, the trend of industrials is downwards.

The worst feature of the decline in sterling has been the destruction of cohesion iri the sterling bloc. Scandinavian, South American and other currencies linked to sterling appreciated. Sterling's decline was also a powerful stimulant to the deflation of gold prices. Most commodities have fallen in price during the week. Meat and wool were notable exceptions, but wheat touched a new low record.

NEW ZEALAND BUTTER DISCUSSION IN COMMONS MEMBERS AND OTTAWA BILL [from our own correspondent] LONDON, Nov. l When the Ottawa Agreements Bill was under discussion in the Commons Mr. D. Grenfell, a Labour member, moved 'an amendment to exclude from tariff protection butter, cheese, eggs and milk. He said these duties could not be justified on the grounds of necessity. If the object was to encourage home production of these commodities and diminish imports, how could that help the Dominion producer, who was, in the main, responsible for the large volume of the imports of these commodities ? Protection for the home and Dominion producer would be a premium upon inefficiency, and the cost would have to be paid by people who received no protection at all. Mr. Batey (Labour —Spennymoor) said people were being told in effect that they must use Dominion butter instead of Danish, unless they paid more for the latter. During the lecess Dominion butter was used in his household, but only once. Mrs. Ward (Unionist—Stafford, Cannock) : We always use New Zealand butter, and it is perfectly good and wholesome. Mr. Batey: It is all a matter of taste. Mr. E. Evans (Liberal—University of Wales) said the Government was putting a duty on commodities which entered every household, without any good either to the consumer or producer of the.;commodities in this country. There was no doubt that ultimately the duty must raise the price to the consumers. As for the home producer of such, commodities, he would derive no benefit from the duty, as he suffered more from Dominion than from foreign competition. Mr. Perkins (Unionist —Stroud) said that under the shelter of these tariffs the British farmer, within three or four years, would be able, without the aid of any Empire farmer, to provide the needs of tlie British market for eggs and milk. Another speaker said that if the Government was honest it would say that prices must be raised for a considerable time as the result of duties on these commodities. TRICES OF POTATOES LOW LEVEL AT PUKEKOHE INCREASE IN PRODUCTION [from our own correspondent] PUKEKOHE. Monday I'ukekohe potato growers are now receiving about £3 10s a ton for their new season's crops. Distributors to-day are quoting 4s to 4s 6d per cwt. f.o.r. Pukekohe for locally-grown new potatoes, a fall of 6d per cwt. on last Monday's prices. The cost of producing a hundredweight of potatoes is estimated to be about 7s. Even at these prices business is fairly quiet.

One local grower of many years' standing stated to-day that the lowest previous price ho has ever received was during the 1914 strike, when his potatoes sold at £4 10s a ton at auction in Wellington, while freight charges amounted to £1 ;i ton. Another grower has received loss than £3 a ton in the autumn, but he cannot remember prices being as low as at present at this time of tho year. At tho beginning of December last year potatoes brought about 10s per cwt. and in the beginning of December, 1930, about 7s per cwt.

Growers and dealers are of the opinion that the present, low prices are primarily due to over-production. The area planted this year was about 30 per cent greater than last year. Favourable wea!he r . giving exceptional growth, has made heavier crops, and early crops, retarded by frosts, havp matured at. the same time as later ones. Last week 570 tons of new potatoes were railed from Pukekohe, while the 640 tons of the previous week constituted a record for the past and present seasons. To-day approximately 60 tons were railed. There is also tho factor of tho cultivation of gardens by unemployed. Many growers commenced digging today for tho first time this season and samples up to the present aro of good quality. The rain, during the week-end and to-day, has greatly benefited onion crops and early onions will probably now be on the market within the next week or ten days.

CANTERBURY WOOL CLIP Wool stores in Christ church are at present busy with, the first of the Canterbury clip, which has begun to come in rapidly. Indications point to high quality in this year's wool. Tiie growing season has been excellent, except that in a few districts in which the autumn dry spell was felt severely, the wool will undoubtedly be a little broken. Canterbury wool generally suffers from a certain amount of sandiness and this year's clip will, no doubt, be normal in this respect, but. it is expected to be heavier, a fact which will mean increased returns to the grower. The first, sale in Christchurch will be held on Wednesday, December 14, the offering being limited to 25,000 bales.