MONETARY POLICY

New Zealand Herald, Volume LXXIII, Issue 22429, 27 May 1936, Page 9

MONETARY POLICY

WORLD CHANGE PREDICTED

IMPENDING PRICE ADVANCES APPEAL FOR MODERATION The belief tliat stnrtliiifz; changes might be expected at any time in world monetary policy is expressed by Professor Gustav C'assel, an eminent Swedish economist, in an article in the quarterly report of the Skatidina viska Credit Hank, Sweden. He points out that there is at the moment such a lack of real equilibrium and so much uncertainty that even the immediate future cannot he seen.

Professor Cassel looks to the United States for the first of the changes which he believes may occur. What is to be expected most immediately is presumably an inflation of the dollar. American monetary supplies are abundant, and there are possibilities of extending them almost indefinitely without departing from traditional views regarding gold cover. There has been a considerable expansion of trade and industry, but tho country is still far from being able to develop its full productive power. Enterprise is evidently being held back by the heavy incidence ol taxation and by the perpetual menace of new and incalculable measures of taxation of a more or less confiscatory nature. Similar impediments are found in the nationalisation policy of the (Government, and in its incessant intervention in tho industrial world.

There is a widespread desire that the Government should spend money with the deliberate aim of yetting the price level to rise, thus bringing production into full swing, continues the article. The United States Government is trying to combat this undiluted inflationism, but is compelled to make considerable concessions to it. As long as the Budget shows u considerable deficit, the Government has no real power to oppose an inflation. There has been some talk of balancing the Budget, but the actual trend of developments has moved in the opposite direction, and the demands which will be made on the Treasury in the immediate future are quite fantastic. Any attempt to meet these requirements by new taxation is bound to have a paralysing effect upon business, ami to confront the Government with still more difiicult problems in the maintenance of production. Inflation in America could not fail to affect the currency position in England and the sterling bloc would gladly join in a moderate price advance promoted by both England and America. Such a rise in price would mean an expansion in the world economy. One danger, however, is that this impending price advance may be pushed forward by forces from which no moderation can be expected svhen developments in the monetary field might pass beyond control.

BRITAIN'S EXPORTS DECLINE CAUSES ALARM THE DOMINIONS BLAMED [FROM OUR OWN' CORRESPONDENT] LONDON, May 6 A -complaint that Britain's export trade was being affected by Dominion competition was made by members of the Birmingham Chamber of Commerce recently. A report presented by the Jrn|>erial and Local Finance Committee mentioned that imports of manufactures into Britain increased by £7,000,000 during the past year, while exports showed no change. One member said the Dominions were largely responsible. Australia, for instance, owing to the high import duties, was now producing for herself goods that she had previously secured from England, and he was informed that she had captured from the Mother Country most of the New Zealand market for iron and steel. The Dominions were allowed to send goods into England free of duty, but English manufacturers were "taxed up to the eyes" if they sent anything to the Colonies. Professor J. G. Smith, who presented the committee's report, said it was true that the greater proportion of the increase in imports came from the Dominions.

HEMP REMAINS FIRM DEPRESSED TALLOW MARKET The Department of Agriculture has received the following cablegram, dated May 23, from the High Commissioner for New Zealand, London:— Tallow. —A poor demand continues, and the market remains depressed. Spot quotations are nominally unchanged. For forward shipments prices are easier. Hemp.—The Manila market remains firm. Low grades are scarce. "K " grade for May-July and June-August shipments valued n't £2O 10s. The sisal market is quiet but firm. Available supplies are small. Sellers quote .£2B for May-July and July-September shipment. In the New Zealand market there is nothing to I'eport. The market is nominal. On the basis of highpoints, £2l for Mav-June shipment. Fruit:—The Kangitata shipment of pears forward. Apples and pears by the Port Brisbane, Mamari, Waimana, Zealandic and Turakina in good condition. The market is depressed. Apples: Cox's Orange. Canterbury, 12s to 18s; Granny Smith, 12s to 15s; Stunner and Ballarat, 8s to 9s Gd; Jonathan, Delicious, Cleopatra and Statesman, 7s to 9s; Dunn's Favourite, London Pippin and Lord Wolseley, Bs. Pears: Cornice, 12s to 15s; Winter Nelis, 10s to lis 6d; Winter Cole, Packham's Triumph. 8s to 9s; Vicar of Winkfield and Duchess, 7s to Bs.

OX HIDES DECLINE KEEN. COMPETITION SHOWN There was another good offer inn of hides and skins at the fortnightly sale held by Auckland brokers yesterday. There was a full bench of buyers and competition was keen. Abattoir ox hides were easier, while values for tallow again declined. Prices for best grades were:— Hides.—Ox (ivbnlloirs), heavy, 7jd to 72d per lh; modi urn, 7Jd to 7!d: light, 5Jd to Old; (country butchers), heavy, 7id to 7sd: medium, (ijd to 7d; light, 5Jd to 01. Cow (abattoirs), heavy. f>jd to (Id; (country butchers), s!d to 52d; light, 51d to s*d'; (farmers). nil' weights. Id lo 51d. Yearlings (nbnttoirs), heavy 7{d to 7Jd; light to medium, fld to o}d: second grade, (id to f.Jd; faulty and cut, -lid to -13 d. Calfskins, !!lb lo 5!1). Is Old lo Is OJd; (lib to Silt, Is Old to Is OJd; '.lib to 101b. !>!d to lOd. seconds and cut, 9d to Old; slippy, Id to Sjd. Dry Sheepskins.—Three-quarters to full wool, medium to fine crossbred. 9d (o 9jd. coarse crossbred. BJd to Od ; damaged and faulty, 7d to 73d; halt-wools, medium to fine crossbred, 9d lo Old; course crossbred, Bjd to BJd; damaged nnd faulty, 5d to 7d. Salted Sheepskins.—Hnlf to three-quarler wools, large, r>s 5d to 5s 9d: half-wools, medium to large, -Is Btl to 5a Id. quarter to half-wools, 'Js lOd to 3s Od: quarter to half wools, faulty, 2s to '2s lOd Tallow.—Good quality, Ifis 6d to 18s; second grade, ]sa to los (Id; third grade and inferior, 12s Gd to 13s Oi.