LONDON MARKETS

Otago Daily Times, Issue 23205, 1 June 1937, Page 9

LONDON MARKETS

VERY LITTLE BUSINESS EFFECT OF DEFENCE TAX BUTTER BUYERS HOLD OFF > (United Press Association) (By Electric Telegraph—Copyright) LONDON. May 30. It is scarcely an exaggeration to say that the markets might as well be closed, for the reason that business is so slender. The revised version of the defence contribution has robbed them of every shred of interest. Meanwhile the forces against the tax are massing. The Conservative motion for the rejection of the Finance Bill is uplikely to be carried. as it would mean the overthrow of the Government, but it is hoped the fact that an influential section of the party has taken this extreme course will impress on Mr Chamberlain that the attack is likely to be supported from all sections of the House. Even Labour members, who favour a taxation on profits, consider that the defence contribution is an extremely clumsy way of doing so. Commodities are also quiet. They have shown a tendency to drift downwards in the absence of speculative interest. The early summer is normally quiet, so that, any marked revival in the near future is improbable. Rubber especially is disappointing, in view of the strong statistical position of the Malayan production for April, which is.well down compared with March. Butter is lifeless. It has barely maintained its present values, though there has been no selling pressure. Whitsun holidays and the repercussions from the bus strike and the threatened coal strike have led buyers to hold off the market. Some livening interest can now be expected. The Economist’s review of the state of trade draws attention to the marked revival in exports, which indicates that recovery is proceeding in the right direction. Manufacturing costs are rising, but there are few indications of resistance to the higher prices except in some consumption goods trades. The prospects in nearly all industries remain promising. Building activity is higher than ever. World industrial activity and international trade continue to expand. The volume of world trade is now only per cent, below the 1929 level, and is still growing. The raw material producing countries continue to gain ground. Industrial production is expanding in Germany, Japan, Belgium and Holland, but progress is slow in France.