MONEY AND MARKETS

Otago Daily Times, Issue 20959, 24 February 1930, Page 9

MONEY AND MARKETS

THE AUSTRALIAN LOAN. NOW KEEPING STEADY. WHEAT POSITION DIFFICULT. (United, Preaa Association.) (By Electric Telegraph—Copyright.) LONDON, February 22. (Received Feb. 23, at 5.5 p.m.) Australia’s financial position has been receiving much publicity in the -newspapers _ and the Loan Council’s statement, indicating a policy of root and branch economy, as one financial writer calls it, has received a very “ good press.” For instance the Daily Telegraph says that the council’s decision may have been inevitable, but credit must be given to those in power for facing the position resolutely. If Australia does not from its declared sinking fund policy *it will not be long before definite benefit is seen.in higher prices of existing stocks. The Statist, with its usual caution, says that while the statement is decidedly reassuring much must depend on the duration and the severity of the economic crisis in Australia.

The Morning Post says that the movements of the Australian Exchange are beginning this week once again to indicate the strained position through which Australia is passing. Nevertheless it will he noted that after the first sharp decline Australian loans are now keeping comparatively steady, and this undoubtedly is du<j to the fact that while the character of the economic crisis, in Australia is fully recognised anxiety has been lessened to some extent by, the evidence afforded of adequate recognition of the position by those in authority in Australia, The fact that £7,000,000 worth of gold is how on the way from Australia is an indication that the authorities perceive not merely the necessity for maintenance of loan obligations but are doing everything possible to relieve the strain on the Exchange.

The Stock Exchange is in a state-of dullness and hesitancy, and not even the satisfactory Hatry group settlement, which passed off without any casualties, the strong bank return; and the favourable monetary conditions have proved sufficient to overcome the prevalent dullness. The most disappointing scctionof the market is industrials, but gilt edgeds have also been depressed and English railways failed to respond to the announcement of satisfactory dividends. Apparently much of the depression is due to apprehensions regarding the Budget and it seems likely -that the dull conditions will remain till Mr Snowden makes his announcement on April 14.

_ The wheat position is a difficult one. There are all sorts of rumours current on both sides of the Atlantic about heavy purchases of Manitoba wheat for shipment to England in the spring, but no one can confirm them. If correct, these sales may be - taken as .an indication that. the Canadian wheat pool has changed its ; policy of holding up wheat, and it is suggested that this may pre-sage-“the end, of the greatest hold-up . since Joseph,” as a leading wheat trader described it in. the Daily .Telegraph* He proceeded: “ There is no one conversant with tbe grain market who will hazard an opinion regarding the future as the situation is too artificial. It is unique, therefore, and no sort of precedent counts. What end can be predicted to its operation, which’ has beep going on for two years? Some grain stocks in North America have been there since , August, 1928, and all that time the carrying charges have been accumulating/being how estimated at-about 12s per quarter, or 30 per . cent; of the present'pricel”- ■■■ , -' i ' " ‘ • tendency in the butter market is still' downward, and there are prospects of a further decline as imports are much in excess of trade requirements, and the lowering of the retail price has failed to stimulate the consumptive demand. Imnnrts ’from all the European countries have increased and those from Australia-and New Zealand have been considerably heavier than a month ago, while large quantities ate advised as leaving Australia and New Zealand in February, and the bookings for March indicate that we shall have more than ample supplies for some months. In this state of affairs buyers fl.ro naturally - only operating hand to mouth.