MONEY AND MARKETS

Otago Witness, Issue 3995, 7 October 1930, Page 46

MONEY AND MARKETS

ISSUE OF TREASURY BONDS.

GILT-EDGED MARKET ACTIVE. LONDON, October 4.

The Government’s decision to issue 4 per cent. Treasury bonds with which to pay off the £75,000,000 4 per cent, tax compounded war loan was very favour, ably received, and the immediate effect was a sharp advance in the prices of British funds, and the gilt-edged market, was more active yesterday than for some time. The 5 per cent, war loan was marked to £lO4 16s_3d. It is the highest on record. Australian issues all showed a marked recovery from the slough of despond into which they had sunk. This movement is partly attributable to the hopes for good results from the Imperial Conference, while Mr Scullin’s reassuring utterances were also a contributory factor. The other departments of the Stock Exchange are still lifeless, though better news from Wall street caused a somewhat firmer tendency in industrials, which mostly have been very flat owing to the depressed condition in the commodity markets, especially rubber, while mining has been overshadowed by slump prices. If any evidence were required of the unfortunate position to which our trade has fallen it may be found in the Economist’s index, where a number of wholesale commodity prices are shown, which at the end of September stood at 73.2, compared with 91.8 in September, 1929. Thus during the past 12 months prices on the average have fallen nearly 19 per cent., or close upon 4s in the £. The average level of commodity prices is now only about 5 per cent, higher than in 1913, and excluding foodstuffs the index figure for raw materials, is substantially below the pre-war figure.

All non-ferrous metal markets had severe setbacks during the past fortnight, and the values of several declined seriously. Standard copper, at £42 17s 6d, touched the lowest level since 1894. Tin, despite the decrease in visible supplies, fell to £123 17s 6d, the lowest price since 1916. Zinc collapsed to £l4 10s, the lowest for over 40 years, while pig lead, at £l6 8s 9d, marked the lowest figure since. 1913. In each case the depression is attributable to the great reduction in trade requirements and the consequent heavy accumulation of stocks and the great increase in production within the last 10 years. Another group of articles which shows a considerable decline is food products which Australia and New Zealand export, notably cheese, which are respectively about■£60 and £23 a ton lower than a year ago. Eggs, too, have a very depressed market. Heavy supplies of Continentals are available, with the result that Australians, although the quality is excellent, meet only a poor demand at about 14s per 120. Bacon is another cheap food just now. Its price is down to the pre-war level, consequently the British housewife can supply a breakfast table much more cheaply than she was able to do some years ago.

New Zealand butter is obtainable at 18d, and Australian at 17d. Danish streaky bacon is at Jsd, and Danish eggs 2d each.

The fall in wheat resulted in a reduction in the price of bread to 8d for a 41b loaf. ,

On the other hand, the prices 'of all clothes are maintained at most unreasonable levels, the fact of wool being, at a lower level being counter-balanced by what the tailor and the dressmaker describe vaguely as overhead charges. <- The Australian rabbit season opened none too well, for, though the arrivals are described as excellent in every way, prices are below last year’s best, large realising 26s 6d a case, and young 235. One reason for the. lower price is, the great slump in the values of skins, 'which last year made. about 4d each, but now being worth only 3Ad. As large shipments of Australian are afloat, there is little prospect of any improvement.