SERIOUS MONEY OUTLOOK

Sun (Auckland), Volume III, Issue 727, 29 July 1929, Page 10

SERIOUS MONEY OUTLOOK

LONDON STOCK MARKET REACTION HEAVY EFFLUX OF GOLD (United P.A.—By Telegraph — Copyright) (Australia)}, and N.Z. Press Association) Reed. 9.5 a.m. LONDON, Saturday. The week ended on July 20 was very gloomy on the Stock Exchange, owing both to a fall in prices and a serious shrinkage of business. A much more confident tone developed early this week. Although there is no appreciable improvement in tlio quantity of business, liquidation is much less persistent than recently, while sentiment has been favourably affected by Mr. Philip Snowden’s cautious reassurance at the bankers’ banquet. -The financial papers admit that this speech was partially responsible for the maintenance of the bank rate unchanged, despite tlio gold position. The papers have not omitted to express the irony of the situation of a Socialist Chancellor of tlie Exchequer - being able temporarily to buoy up the market.

Yesterday, however, Stock Exchange conditions again weakened owing to the growing seriousness of the monetary outlook, for thei*e was a further gold efflux to the Continent, reducing the Bank of England’s holdings to approximately £147,750,000. Sin'ce June 18 the net gold withdrawals total £17,316,000, an average of £500,000 a day. Germany has taken £11,500,000, Franco £6,500,000, America £2,250,000. Thus the Bank of England’s laborious work of building up the gold reserves since the advanced discount rate in February has been practically all undone within a few weeks, and it faces the autumn with its stock of metal much below the quantity regarded as necessary at this season of the year. Moreover, the gold exports have failed in their chief object of turning the foreign exchanges in favour of sterling. In these circumstances, it is no wonder that the depression in giltedged stocks, has been almost acute during the past week. Many interests are now inclined to view a 6 per cent, bank rate as inevitable, and would welcome an announcement to this effect, as being likely to relieve uncertainty. During the week the underwriters were left with 75 per cent, of the £2,000,000 British Guinea 5 per cent, stock, issued at £ 98, while the average rate on allotment of Treasury Bills yesterday was £5 9s l.S5d, the highest level since June, 1921. LONDON MEAT MARKET SMITHFIELD PRICES The New Zealand Meat Producers’ Board has received the following cablegram from its London office, dated July 26, advising Smithfield delivered prices averaged for the week ended that date as follow:—• New Zealand Wethers and Maidens.— Canterbury quality, selected brands, 561 b and under, 63d a lb; 571 b to 641 b, 6d; 651 b to 721 b, s§d; other brands, 561 b and under, 6Jd; 571 b to 641 b, 52d: 651 b to 721 b, sid. New Zealand Ewes.—G4lb and under, 43d. New Zealand Lambs.—Canterbury quality, 361 b and under, 83d; 371 b to 421 b, 83d; 431 b to 501 b, SJd; seconds, 81d. Selected brands, 361 b and under, 9d; 371 bto 421 b, 83d. Other brands, first quality, 361 b and under, 8?.d; 371 b to 421 b, 8d; second quality, 301 b to 321 b average, 83d. Argentine Lambs.—First quality, 361 b and under, 8d; 371 b to 421 b, 7Jd. Argentine Chilled Beef.—Ox fores. 4d; hinds, 7d. Australian Frozen Beef.—Ox crops, over 1001 b, 4id; hinds, over 1601 b, sgd. New Zealand Frozen Pork.—6olb to SOlb, Sd; 811 b to 991 b. 73d; 1001 b to 1201 b, 73d; baconers, 1211 b to 1801 b, 8!d. Lambs continue to weaken, the hot weather curtailing consumption. Wethers and ewes are also weaker. Trade is slow. New Zealand Porker Pigs.—Nominal prices. New Zealand Baconer Pigs.—There is a good demand for the small stocks on hand.

LONDON WOOL SALES TRADE WEARILY WAITING FOR ORDERS WEAK COMPETITION (Australian and N.Z. Press Association) Reed. 9.5 a.m. LONDON, Saturday. The wool sales, which closed this week, were of serious and critical importance to the industry. They were somewhat disappointing, with a slackness in the general demand and large withdrawals. Competition for Merinos, both from France and Britain, was conspicuously weak. The whole European industry is wearily waiting for new orders, and only slowly reducing its heavy stocks of raw material. Until new orders for manufactured goods are forthcoming, there is no prospect, of better conditions. The most hopeful present factor is that cheaper wool will create its own demand in finished goods. The effect of the variations in the past year is that wool values are now 25 per cent, below what they were a year ago. Among the reasons must be included competition by artificial silk, which is increasingly being used for men’s as well as women’s garments. Another factor restricting consumption is undoubtedly the heavy toll by merchant retailers before the consumer is reached.

LONDON MARKET REPORTS (Australian and N.Z. Press Association) LONDON, Saturday. ; Sheep.—New Zealand, light, 6Jd: ! medium, 6d; heavy, 53d; North Island, ! light, 6j.d; medium, 53d; heaw, s’.d; j ewes, 43d; Patagonian ewes, l.’.d. " j Lambs.—New Zealand, Canterbury, , light, 83d: medium, Sid; seconds, Sid; ' selecteds, 9d; North Island, firsts, Sid; I Argentine, seconds, 7d; Patagonian, firsts Sod; seconds, S^d. Frozen Beef.—Australian, crops, 4*d: I hinds, 5 9-16 d. Chilled Beef.—Argentine, fores, 4d; ! hinds, 7d. Others unchanged. Cotton. Rubber, Jute, Etc. (Last week’s prices in parentheses.) Cotton, August delivery, lO.lOd (10.07 d) Rubber.-*—Para, llid (llid) a lb; plantation and. smoked, 11 3-32 d (lOgd) a lb. Jute.—August - September shipments, £3l 5s (£3l 2s 6d) a ton. Copra.—September-October shipments, £2l 15s (August September, £23 15s) a ton. Linseed Oil.— £3G 10s (£3B) a ton. Turpentine.—43s (43s 6d) a cwt.