TRADE AND FINANCE

New Zealand Times, Volume XLVII, Issue 10950, 12 July 1921, Page 6

TRADE AND FINANCE

THE PRESENT POSITION NEW TREASURY BOND ISSUE' DEPRESSES MARKET. - / EFFECTS OF STRIKE. Bv Telegraph—Press Assn.—Copyright. Australian and N.Z. Cable Association. LONDON, July 9. Owing to heavy applications for Treasury bills, money lias not been over plentiful. The withdrawal of the sixmonths’ bills caused bewilderment. Mr Chamberlain’s announcement of a new issue of Treasury bonds, maturing in 1929, depressed the market for giltedged stocks. The market did not welcome the issue, but reaction followed, based on hopes that the new loan would operate in the direction of further reducing the Bank of England rate. The “Economist” declares that the issue was inopportune on the eve of the holiday season, and expresses tjie opinion that the worst obstacle is that the discredit in the matter of public expenditure from which the Government is suffering, results in the belief that further lendings, to the Government are likely to encourage extravagance. Tenders for Friday’s offer of £55,000,000 three-months’ Treasury bills amounted to £117,000,000, tlift average rate of allotment being £5 3sj 6d, the lowest since the resumption of tenders. • The volume of business on the Stock Exchange continues small. Hopes of revival, based on industrial settlement nn<l reduction of the .Bank rate have, so far, been disappointing. The Board of Trade returns strikingly demonstrate the deception ally difficult pfluitrrrm into which trade has drifted owing to the cumulative effects of the coal strike and falling commodity values. Half-yearly totals show a decrease in exports, us compared with 1920, Miountring to £354,000,000. Imports ,ve similarly declined to £461,000,000. May and June were the worst months experienced for years, export falling for the first time below pre-war level, although prices have not returned to anything" like normal. Figures showing quantities instead <Jf values of trade the more istrikingly dmnonstrate the falling away as eompareq with pre-war volume. ' The settlement of the strike gave rise in some quarters to an immediate" revival of trade, hut the improvement must necessarily be gradual. Iron and steel bars are still importable from Belgium at £3 per ton less than Welsh prices. Some authorities express the opinion that the full revival is impos-. sible until coal is available at 22s per ton instead of 455, which is the- best possible under the coal settlement, despite the subsidy. Nevertheless, the iron" and steel companies are ’making great efforts to re-establish trade.'

The cotton and wool" wages settlement has provided a ,mqre hope ft tl tone in the textile trades; but the wooloombers’ failure to reach the heavy commission charges agreement stiil bars’progress in the direction of stabilising the woollen industry.