FINANCE AND TRADE.

Poverty Bay Herald, Volume L, Issue 16606, 9 December 1924, Page 7

FINANCE AND TRADE.

MARKETS FIRM. STERLING AGAIN PROVIDES A SENSATION. GERMAN COMMERCIAL TREATY. lliiec. Tel. Copyright.—l'lnU-U Press Assn.i (Australian and N.Z. Cablo Association. LONDON, Doe. 7.

"Quietly steady" is the best description applicable to thei Slock Exchange, which has weathered the excitement arising from the Egyptian tension, without anything more serious happening than a sharp drop in Egyptian ootids. Generally markets are firm, anil though the .settlement concluded last Thursday wa.s noticeably of smaller dimensions Iban the two previous, there was no sign of weakness apparent. A feature has been the demand for new issues of the Commonwealth loan, which was a notable success, but, undoubtedly, a good proportion of the applications came from stags for scrip which was selling at a slight discount. Another issue, which is likely to attract an enormous subscription, is the Greek Government's "retugoe" loan, floated under the auspices of the Financial Commission of the League of Nations. The proceeds will be devoted to the settlement of Greek refugees upon the land. The total amount of the loan is £12,300,000, whereof Britain's share is £7,500-,000 in 7 per cents. The issue price is eighty - live. Allowing for redemption at par, in twenty years, the loan yields over pei cent., so it is not surprising, not only that there was a great rush to secure a share in its underwriting, but that long queues waited outside the issuing houses for the prospectuses. Sterling has again provided the sensation of the foreign money market, the price having at one time reached 4691*. There have been feverish fluctuations, and to-day's closing price was 468. L According to a financial expert, this movement, is not based on general economic factors, as both the movements of prices and the trade balance in the two countries would suggest a tall rather than a rise. Probably the immediate cause is the difference in the market rates at the moment between the two countries, which resuJted in the movement of a large amount of short money from New fork lo London. Therefore the position is far from stable. Following this rise of sterling-dollar exchange, a discussion has arisen in the newspapers regarding our early return to the gold standard. An economist writes: Undoubtedly hopes are growing on both sides of the Atlantic that the recent movement foreshadows an early return to parity, and Great Britain's resumption of the gold standard. If these hopes can be realised, ft contribution to world reconstruction will be made second only in importance to the introduction of the Dawes plan. If Great Britain returns lo the gold standard she will soon be followed by the great Dominions and other countries, among whom Holland. Switzerland, and Spain are most likely lo be first.

The provisions of the Anglo-German Commercial Treaty are arousing much interest in the city, particularly in banking circles, wherein considerable difference of opinion exists regarding the advisability of permitting German banks to reopen* branches in Loudon. One side suggests that London, being the monetary centre of the world, is an international clearing house, to which foreign countries must be admitted. Germany, which was formerly one of the most important customers, cannot be excluded now that we are at peace. On the other hand, the opinion is expressed that Germany, being our competitor, it is against British interests to allow her to come into this country, 'there is little likelihood of British banks extending to Germany, so reciprocity is of no value to us.

The slight set-back in metals is largely attributable to the advance in the sterling exchange, and the positions of copper, tin, lead, and spelter are intrinsically strong. Tin especially is meeting with a steady demand from works in America, South Wales, and the Continent, and as one of the brokers points out, it is an outstanding fact that with heavy shipments from the Slraits lo all parts and heavy arrivals in London, tin is no sooner discharged ex steamers than it is cleared, either lor English consumption or transhipment, In a review of the wine industry. Messrs W. A. Gilhey, Ltd., state that the annual world production, according to the latest return, is estimated to total four thousand million gallons, whereof France's annual home consumption of wine, apart from the quantity distilled into brandy, amounts to a thousand million gallons, or actually 150 bottles per head of the whole population, compared with the United Kingdom's almost negligible consumption of two bottles per head, and the latter includes wines from all European countries, as well as Australia and the other Dominions.