COMMERCIAL

Taranaki Daily News, 3 September 1929, Page 16

COMMERCIAL

SHAREMARKET SALES. Auckland, September 2. —Sharemarket sales: Auckland Harbour Board debentures, 1941, 6 per cent., £105; Nrw Zealand Breweries, deben-tures,-28s 4d; Commercial Bank of Australia, 29s- 9d; Bank of New South Wales, £5l, 12s Gd; Union Bank of Australia, £l5 2s 6d; Taupiri Coal Rights, 16s 4d; New Zealand Farmers’ Fertilser. 225; Waihi Grand Junction, Is 7d, Is 7d.

LONDON DAIRY PRODUCE PRICES.

The Farmers’ Co operative Organisation Society of Mew Zealand, Limited, have received the following cable from their London representatives: — “The butter market is firm but quiet at an advance in prices, which are.— New Zealand, 175 s to 1775; Kangaroo, 1725; Argentine, 162 s to 170 s. . The cheese market is firm, but not fast. New Zealand white - is quoted at 91s and coloured at 935.” AMERICAN INFLUENCES. Out of the obscurities of the American financial situation one fact at least stands clear—namely, that the Federal Reserve system has lost control of the New York money market, says the Times, in its half-yearly review of the world’s banking activities. One of the principal causes of the present credit situation is the prolonged speculative movement on the Stock Exchange, which has reached proportions for which there is no previous parallel. The American position has disturbed money rates over the rest of the world. Europe’s difficulties have been further aggravated by the reduction of foreign loans by the United .States, which previously provided An offset to the large payments which tiiat country as a creditor nation* received from Europe. This year has witnessed the anomalous situation of a gold drain to New York, where the stock of the metal already provides an ample basis for the credit structure of the country. The new arrivals have been sterilised in order to check the growth of credit. In the first five months of the year nearly 30,000,000 dollars was sent from London, while nearly 50,000,000 dollars went from both Canada and Germany. So far from these imports being used to expand the credit structure (a procedure which under the normal conditions would have made money moie plentiful and reduced rates, thus providing a corrective to the position), the amount of reserve bank credit outstanding after the imports of gold was less than before. On the other hand, brokers’ loans, which represent the funds borrowed byWall Street, have touched the record figure of 7,071,221,600 dollars. • It is estimated that about one-half of the money used in the financing of stock market purchases is supplied from nonbanking sources, such as accumulated reservices of companies and private bodies. This practice is fraght with dangerous possibilities, as was recognised by the Federal Reserve .Board, which in February issued a strong criticism of it without, apparently, much effect. Unfortunately, there is little sign of the position being rectified by the authorities. The Reserve Board appears to be divided in its counsels. While the Federal Reserve system is well constructed in theory, it suffers in practice from the intrusion of political considerations, which are allowed to enter into and sometimes to dominate purely fiancial questions. As long as this is so, the system ‘an hardly function smoothly.