MONEY AND MARKETS

Otago Daily Times, Issue 21280, 10 March 1931, Page 9

MONEY AND MARKETS

STOCK EXCHANGE BRIGHTER. FEELING OF QUIET OPTIMISM. BUTTER PRICES MAINTAINED. (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, March 7. For the first time since July, 1929, the Economist’s index number of commodity prices at the end of February shows an upward movement. TJie Economist says: “ Though the percentage of increase is only one-third of 1 per cent, it is at least satisfactory that the prolonged downward sweep appears to be arrested.” The upward movement, which continued this week, has given rise to a feeling of quiet optimism which is reflected on the Stock Exchange where prices in nearly all departments showed a general improvement and closed yesterday with a strong tone. Apart from the rise in commodity prices several other events have had a reassuring effect, notably the conclusion of the Franco-Italiau naval agreement, the Indian settlement, the reduction in rail-, way wages, the result of the London County Council elections,, and last, but riot least, the political ' developments in Australia, which brought about a considerable increase in the values of all Commonwealth and State stocks.

Commenting on Australia’s troubles, an important London stockbroking firm in a review of the financial position says that Mr Theodore’s latest proposals give ground for apprehension lest a policy of inflation may be adopted if the banks should prove unable to exert sufficient influence to prevent permanent depreciation of the currency. The strain involved in paying the external debts might win the acceptance of the invidious argument that the loans were borrowed when the Australian pound and sterling were linked and could with justice be in Australian currency when the link was brokeif. Any such repudiation of both the letter and the spirit of definite contracts is, however, far: from the wishes of all Australians who have any understanding of financial matters. At the very worst, therefore, the risk appears to be one of partial failure only, and of some postponement of the final dates for the redemption of Australian stocks. The prospects of the forthcoming Australian and New Zealand apple season generally are regarded as fairly favourable. North American shipments are still heavy, but are expected steadily to decline, and by the time the first Australians arrive early in April supplies from America are unlikely to be excessive. Another factor which should help is the shortage of Spanish oranges, due to damage by frosts. Orange prices are steadily rising, and . are expected to become so dear that the demand may be transferred to apples!" The prospect for pears in the immediate future does not appear good, for the market is plentifully supplied from other sources, and importers generally consider that Australian supplies should not arrive before April, by which time supplies from South Africa are beginning to decline.

Although the demand for butter has slackened somewhat prices are well maintained, and importers are hoping to be able to keep values at about the present level for a week or two more. Estimated deliveries from London during the last six weeks averaged fully 70,000 boxes a week, so there will be no surplus stock. Continental demand is declining, as production there increases, but it is expected that the Irish Free State'will require to import at least 40,000 boxes this' month. The tariff duty .of 4d per lb has hitherto restricted ■ purchases, but efforts are being made to get this reduced, if not completely taken off. W: ; The grading of Australian eggs and other food products met somewhat severe criticism at a dinner of the London Egg Exchange. The chairman (Mr Alexander Mitchell) said all wished to see Australia return to financial strength, but if Australia wanted to get back business she must see that the people employed in giving grading certificates were honest and straight. He said that without fear of contradiction, not only as regards eggs, but also other commodities from the Commonwealth which Tie had had the privilege of handling for over 35 years. Some merchants here had been “ mugs ” enough to buy goods outside the regular channels, so could not hold anybody responsible except themselves. With all due respect to the development of Empire produce, he hoped it would go out to the people of Australia that the British trader only wanted fair treatment.