COMMERCIAL SUMMARY

Otago Witness, Issue 3619, 24 July 1923, Page 16

COMMERCIAL SUMMARY

TRADE POSITION DISAPPOINTING. LONDON, July 21. The Stock Exchange has recovered quickly from the depression which followed the advance of the bank rate, arid with the monetary conditions easy, gilt-cdgpd seeurilies have shown considerable strength and prices have improved all round. Outside the gilt-edged market there has not been much activity, and as the holiday season approaches its height there is not much prospect of any increase in the volume of business, but the tone of the Stock Exchange generally is cheerful, and" there is a distinct disposition to take a more hopeful view of the Ruhr and reparations outlook in anticipation that the British reply to the German Note will have satisfactory results. The dockers’ strike has naturally pro vented Home railway stockg participating in the improvement, but it had singularly little effect on the industrial market generally. The British Government’s award of £3,750,000 to the British South Africa Company recalls one of the greatest Stock Exchange disappointments of 30 years ago. There was a great boom in Chartered shares, as they were popularly called, and for a month or so they rose steadily daily, all clas-es of the public investing in response to Cecil Rhodes’s advice to “buy them for your grand-children.” Ihe price rose to £9, when suddenly the market collapsed, and the price fell to £l. Recently these shares were quoted at 9s, "but have now recovered to 15s in anticipation of a cash distribution out of the Government s award. The trade position in Great Britain is disappointing. A special report in the Eco>nonust says: ‘‘The volume of trade con* tinues on a large scale, which is very much better than at this time last year, and is near the peak point reached this spring, but unfortunately the current orders are not being replaced, and the perioci ahead for which the industry had assured orders is rapidly shortening. In some cases the end of the output is alarmingly near lwo features of special interest are on the one hand the Bradford spinning industry, whicn has been particularly hard hit by the low prices and the lack of Continental demand, :in d on the other hand the electrical engineering trade, which is full up wiUi orders.” Early in April Australian flour importers were greatly perturbed by the recommendation of the Agricultural Tribunal that imported flour must be accompanied by a per cent, of offals. The proposal met with much opposition, and finally the Government abandoned it. 11 was suggested then that the proposal emanated from the l lilted Kingdom millers, and this suggestion was fully confirmed by the speech of the chairman at a meeting of the Associated London Flourmillers. The chairman said the keenness of the competition which the milling companies had to meet in the past was unparalleled in the history of the milliner trade. The unsatisfactory condition of the trade was largely due to two clauses—(l) The large quantity of imported flour; and (2) the large surplus capacity of the mills in this country. Our millers, particularly in the ports, always faced keen competition from foreign and colonial millers, who were well acquainted with the science of dumping. It is calculated that the mills in England ami Wales, running normal hours, could manufacture at least 25 to 60 per cent., more flour than is required, equivalent to some 10,000,000 sacks per year. This has resulted in much flour being sold below cost price. The situation was also affected by the decrease in consumption, which is estimated to bo 10 per cent, below that of a decade ago. The abandonment of the w'ool sales is not regarded as unfavourable for trade, the general impression being that a rearrangement. of the sales to commence on September 4 will make for strength in the market. as the opinion is pretty general that values should inqirove, especially in view of the large consumption on the Continent. Meanwhile Bradford shows slight, indications of recovery from the recent acute depression. No increase in the demand is noticeable, but the tone is rather better, and traders are inclined to take a more optimistic view of the future.