A LITTLE RAY OF HOPE

Taranaki Daily News, 30 December 1929, Page 9

A LITTLE RAY OF HOPE

THE FINANCIAL OUTLOOK

DIFFICULT YEAR ENDS

CHEAPER MONEY POSSIBLE

By Telegraph—Press Assn.—Copyright.

Rec. 5.5 p.m. London, Dec. 28. Financial writers’ summing up of 1929 is almost unanimously dismal and only a few of them show much inclination to be optimistic regarding 1930. To quote one authority, “The past year has not been good either in the financial or the business world. Industry has languished and exports have shown a small decrease even compared with the unsatisfactory figures of 1928, while the losses sustained by financial institutions through failures in one direction or another, to say nothing of the losses suffered by the public through the fall in share values, have probably been greater than for many years past.” There is, however, one writer who holds out a little ray of hope for 1930. The Economist says the Stock Exchange, though still overhung by a cloud of uncertainly till the - Hatry settlements can be completed, has so far weathered not only the domestic storm but also the depression from across the Atlantic, which came with cyclonic force.

“In the financial world," says this journal, “we faced and met a crisis which threatened even to endanger the gold standard in this country, but the Bank of England at the critical moment took a course as bold as is was successful, and the year closes with confidence that money will go still cheaper and Great Britain’s monetary position in regard to gold need cause no anxiety.” An illustration of the unsatisfactory year the Stock Exchange has had is given in the returns of the year's new capital issues in London, which show a reduction of £84,000,000 compared with 1928, although the total for that year was exceptionally high. Altogether the new issues for 1929 totalled £285,000,000 compared with £369,000,000 last year and £355,000,000 in 1927. Of this year’s issues £198,000,000 were for the United Kingdom, including £65,400,000 of Government borrowing, while British possessions Issued £61,000,000, of which £26,300,000 was for Governments, and foreign countries’ issues amounted to £26,200,000.

Commenting on these figures rhe Economist writes: "Investors in new issues, even of the highest class, have seen their holdings in a number of instances undergo serious depreciation. The prospect of comparatively cheap money in 1930 encourages the hope that sound borrowers at least will be able, in the near future, to make issues on the London market on better terms and with more propitious chances of success. It is clear, however, that the process of restoring activity in the new issue market as a whole is likely to be slow, and the public after the experience of'the unsound boom in 1928 is likely for some time to exercise considerable discrimination between offers.”