CHEAP MONEY

Pahiatua Herald, Volume XXXVIII, Issue 11402, 22 March 1930, Page 5

CHEAP MONEY

REDUCTION IN BANK RATE EFFECT ON WOOL TRADE. United Pres s Assn—By Electric Telegraph—Copyright LONDON. March 20. The bank rate, which has been reduced to per cent, is the lowest rate for seven and a half years. To-day’s reduction is the sixth change that has been made in the course of the year, it having been reduced *bv progressive stages from 6-i per cent, which was a high rate and largely attributable to the speculative boom current at that time. The latest reductiqp was generaliy anticipated yesterday, the investment securities displaying activity and strength on the Stock Exchange. The tendency was also marked this morning, before the announcement of the reduction was made.

LONDON, March 21. Bradford believes the reduced bank rat© will react favourably on tile wool market. News of the drop was well received on the wool exchange. A leading importer said there was nothing now to stand seriously in the way of a revival of the wool industry. “We are likely to enjoy cheap money for some months. There should be less restriction in the placing of new business.”

Sir George Whitaker, president of the British Wool Federation, said: “It seems one reason for the reduction is that money is not being used in industry. The drop will be an incentive to use it thus again.” The Daily Herald, in an editorial, says the bank rate reduction foreshadows an extension of credit to an extent not reached for seven years. Rightly used, it should check the long decline of prices which is the. chief cause of the depression in our industries.