TRADE SUMMARY

Southland Times, Issue 20671, 18 December 1928, Page 5

TRADE SUMMARY

POSITION IN BRITAIN STOCK EXCHANGE BUSINESS RESTRICTED BUTTER PRICES ADVANCE (United Press Assn.—By Telegraph—Copyright.) London, December 15. Stagnation has reigned on the Stock Exchange since the beginning of the month. Anxiety about the King’s health has been one of the chief causes, while the approach of the Christmas holidays and the slump on Wall Street have also contributed to make things quiet. But while business has been restricted, gilt-edged stock have remained steady, which is a matter of congratulation, as there has been such a considerable deflex of gold from the Bank of England that there is talk of a possible increase in the bank rate, perhaps not this year, but early in 1929, when it may be difficult to keep the rate at the present level. In a long article headed “The new position of Australian loans,” the Economist discusses the effects of the Federal Government taking over the States’ debts. After expressing approval of the financial reforms carried out under Mr Bruce, especially in furnishing information in prospectuses and the provision for sinking funds, the writer proceeds to say, “The all-important question remains (hat Australia is over-borrowing.” He states that 67 per cent, of the riett Australian debt raised for all purposes is directly or indirectly productive and arrives at the conclusion that the test of soundness of Australian borrowing is whether the money is being spent productively and economically. The writer concludes, “The London market will take a more cheerful view of Australian securities when it is assured that reckless borrowing has given place to wise and carefully supervised borrowing. There are signs of restricted spending on the part of both Governments and individuals while an exceptionally good rainfall in October has changed the seasonal outlook for primary production. Now is the time, we suggest, for the Commonwealth and the States to budget for surpluses, not deficits, and apply those surpluses to accelerate the repayment of the debt.” The butter market has shown great strength this week. Prices for all descriptions have advanced and the rise is a genuine one brought about by a real shortage. For some time past the retailers have been working on very small stocks and they appear suddenly to have awakened to the fact that the prospective supplies are much smaller than they thought. There is also a great shortage on the Continent and considerable quantities of Colonial are being brought on this market by Germany, Belgium, Holland, France, Italy and Switzerland. This demand appears likely to continue, and the prospects for the next month or so appear decidedly favourable, the year finishing with the whole trade feeling fairly comfortable. Regarding the standard of wool values, a Bradford correspondent says: “There is far more faith to-day in current values than last March when the prices were distinctly higher and when a good deal of forcing tactics had been employed. To-day this feature is entirely absent, but all sections of industry are satisfied that current values are high enough to be safe and that higher values will do more harm than good. It looks as if we are going to see steady values with the consumption maintained and tending to improve.” In its annual review of the Australian an New Zealand fruit season, the F. W. Moore Company calls attention to the fact that New Zealand since June has enjbyed the advantage of a favoured nation treaty with the German Government. Several other nations have a similar arrangement whereby they have to pay only 7 reichmarks import duty, roughly 7/- per 100 kilograms, instead of 15 which is charged on Australian fruit. This, of course, only applies to fruit bought for consumption in Germany, but Germany, with a population of 60,000,000, has a large number of potential buyers who hesitate to compete for apples on which the duty is roughly 2/9 per case and concentrate their attention on apples, on. which, under a favoured nation treaty, they pay about 8d per case lower duty. Commenting on this position, Moore's write that the Australian fruitgrowers need to stir up the Commonwealth Government to follow New Zealand’s example, and suggest that the Ministry of Markets in Australia should attend to this without delay.— Australian Press Association.