COMMERCIAL

Southland Times, Issue 21362, 7 April 1931, Page 2

COMMERCIAL

A NEW ZEALAND CARLSBERG. “Exactly the same water as that from the famous Carlsberg Springs at Copenhagen.” With these words Mr J. P. Spangenberg, the famous consulting brewers’ engineer to the Carlsberg Breweries, Copenhagen, Denmark, probably laid the foundations of a new industrial concern in Auckland, capable of employing a large staff of men with an annual wages bill of £lO,OOO per annum. This world-famous authority visited New Zealand recently at the express invitation of Lager Breweries (N.Z.) Ltd, for the purpose of finding a suitable water supply for the manufacture in New Zealand of genuine lager beer of low alcoholic content and the remark given above was his opinion after testing samples of water taken from artesian wells on Pigeon Mountain, Pakuranga. The importance of his discovery cannot be too highly estimated as the Carlsberg Spring to which he refers is the water used for the manufacture of the world famous Carlsberg Lager, and the fact that similar water has been located in New Zealand ensures the establishment of a large brewery in the vicinity of Pigeon Mountain, Pakuranga. The company will make its first announcement within the next few days and this should prove of great interest. HIGHER WOOL PRICES. JOY IN AUSTRALIA. Sydney, March 26. The increase in the price of wool seems to be the most definite thing that has happened in Australia during the past 12 months. Nothing could be more cheering, nothing more opportune. When wool commenced to rise some doubters thought it was a mere flash in the pan. But it has gone up and up in a most cheering fashion, and now Australia has the spectacle of buyers tumbling over one another in their wild efforts to secure the little wool that is remaining. What foresight was shown by the brokers when they decided to limit the catalogues. That decision was influenced by the low prices then offering, the view being held that as the manufacturing centres were not overstocked prices must advance. Unfortunately for Australia most of its wool has been sold at the lower levels. At £l4 14/2 a bale—equal to 11.8 d per lb—the average price paid for wool at the auction sales in Sydney last week touched “peak” for the current season. Bidding throughout was sustained, and brisk competition was widespread. Early in the season there was little competition, and most of the buyers adopted an “after you” attitude'to one another. Now all that has changed. Spurred by the knowledge that if they do not get their wool shortly there won’t be any left, foreign buyers are making a final spurt. Last week’s bidding was the keenest seen in Sydney for two years. Time and again buyers were on their feet protesting bitterly. It was their bid, they snapped. With only another 120,000 bales offering it was no laughing matter to lose a rival. When the sales were resumed last Monday there was a further rise of 5 per cent, with rivalry even more keen than it was last week. During the week ended September 20 the average price per bale was £ll 14/-, or 8.6 d per lb. It remained about that figure until the week ended December 6. Then in one week the average went down to £9 13/9 a bale, or 7.6 d per lb, and remained at that figure until the end of January. Here are details of the advances since then

So far this season 362,394 bales have been sold, and despite the limitation of catalogues to 10,500 a day, the number is ahead of last year’s figures for the same period. MEAT QUOTATIONS. The New Zealand Meat Producers Board has received the following cable from itu London Office, dated April 3, advising that the following are the approximate average prices realized for the week, based on actual transactions of wholesale quantities of the descriptions of meat mentioned and are for representative parcels of the goods offering during the week, being for business done on the basis of delivered to Smithfield market and/or ex London stores. (Prices for the previous week are also shown): — (Per lb.) 3/4/31.27/3/31. d. d. N.Z. Sheep: Canterbury and North Island selected crossbred wethers

Lamb Market: The demand is good, but the market is slightly easier owing to large supplies due this month from all sources. Mutton Market: Wethers are unchanged, but there is a slightly better demand. Ewe prices have improved owing to better demand and lighter stocks. Beef Market: The market is overloaded with Argentine chilled beef. New Zealand Porker Pigs: The demand is falling off as usual for the time of year. New Zealand Baconer Pigs: Nominal prices. Continental bacon is still selling at low prices. FIXED INTEREST CHARGES. HOW TO REDUCE THEM. At the present time when there is a strong outcry, particularly from the wageearning class, that the rates of interest should be reduced, a circular just issued by the Bank of New South Wales should be of special interest. The circular emphasizes that the burden imposed by interest charges is not nearly so potent a factor in restricting industry as many imagine. It also points out that those whose income is obtained from interest have been obliged in various ways to share the losses that have fallen upon all classes of the community. After dealing at length with several proposals advanced for the solution of the problem, the circular sums up by declaring that, “it is not sufficient, however, merely to make a destructive attack upon suggestions for preserving equity in the common sacrifices required of the people in order to distribute the loss in the national income as evenly as possible. It is also necessary that some constructive proposals should be put forward whereby even the holders of fixed interest-bearing securities may share in the loss. But the proposals should be of such a kind that they will not do more damage than they will bring benefits. “If economic forces are allowed to work themselves out naturally, it will be found, in the course of a few years, that the burden will, in the main, have been equitably distributed. With the lower prices now prevailing a much smaller volume of loans will be necessary in order to meet the requirements of Governments and industry. With the restoration of confidence a considerable additional quantity of funds will be available for investment in fixed interestbearing securities, provided trust in them is not shaken by any action taken at that time. Rates of interest on bonds will, therefore, be materially reduced as soon as confidence revives, and with over £265,000,000 of Commonwealth and State securities maturing in Australia in the next five years, out of a total of £527,000,000, a very substantial relief will soon accrue to the finances of Governments from conversions at lower interest rates. Falling Interest Rates. “Relief will thus be obtained by Governments, and, by the same act, the incomes of the holders of fixed interest-bearing securities will be reduced. It will not, therefore, be long before holders of Government bonds begin to share in the loss in the national income. The holders of many other fixed interest-bearing securities will share much more rapidly, as mortgages and debentures fall due, while bank overdrafts and deposit rates cannot fail to fall. Natural conditions, may, therefore, be relied, upon to bring about an equitable distribution of the burden, but there is no reason why action should not be taken to expedite this process. Direct Action Suggested. “The Governments, the banks and the savings banks could, by agreement, bring about an immediate reduction of interest. The Governments’ share in the task would be, by balancing their budgets, to refrain from making demands upon the limited credit available. With this done, and the imminent danger of inflation , removed, banks could proceed to reduce interest rates on both deposits and advances. It would then not be long before all classes of investors would be compelled to take lower rates of interest on new investments and on conversions. Furthermore, by this method some of the loss in the national income would be thrown upon external bondholders, for restored confidence would result in lower rates being secured on conversions in London.

“This is the simplest, quickest and most equitable way in which the holders of fixed interest-bearing securities can be made to share in the loss of the national income. If Governments attempt to force them to share, either by an arbitrary reduction in rates of interest on existing contracts, by debasing the currency, or by special taxation, the resulting lack of confidence will be so great that materially higher rates of interest will have to be paid, and instead of the burden on industry and Governments being reduced, it will be increased. Furthermore, if Governments take action calculated to destrov the confidence of investors, it Is possible that they will find themselves unable to secure the funds necessary to finance their operations. With such a large volume of loans falling due for renewal in Australia and London in the next few years, it is essential that the Governments take action calculated to make conversions possible at a reasonable rate of interest.”

Week ended. Per bale. Per lb. February 7 £11 4 4 8.8 February 14 11 10 11 9.1 February 21 12 2 0 9.6 February 28 I 12 16 7 10.1 March 7 1.3 17 9 10.8 March 14 14 14 2 11.8

and Maiden ewes — 481b to 561b 31 31 571b to 641b 35 35 651b to 721b 35 35 North Island— 481b to 561b 35 3f 571b to 641b 34 34 651b to 721b 38 38 Ewes-" 481b and under 31 ' 34 481b to 641b 2J 24 651b to 721b 24 N.Z. Lambs, Canterbury— 361b and under 68 61 371b to 421b 61 431b to 501b 64 64 Second quality average 331b Including Downs, selected North 54 Island brands— 361b and under 68 64 371b to 421b 68 61 431b to 501b 6| 64 Second quality, average 311b Other North Island brands, first 51 54 quality— 361b and under 51 6 371b to 421b 51 6 Second quality, average 311b 51 51 Australian Lambs; Victorian first quality— 361b and under 41 5 371b to 421b 41 5 Argentine Lamb; first quality— 361b and under 5 5 371b to 421b 45 45 Argentine Chilled Beef— Ox fores 21 34 Ox hinds 6 6

Australian Frozen Beef— Ox crops, over 1001b 2| 2§ Ox hinds, over IGOlb 3i 3* N.Z. Prime Porker Pigs— 601b to 1001b 5 ' 5 1011b to 1201b 4i 4J N.Z. Prime Baconer Pigs— 1211b to 1801b 5 5