BRITISH TRADE OUTLOOK.

Timaru Herald, Volume XCVIII, 20 July 1925, Page 9

BRITISH TRADE OUTLOOK.

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REVIEW OF WOOL AND PRODUCE DEVELOPMENTS.

’2y Cable—Presa Asaocntioo —Copjngh AUFira:n.n /me N./,. i.ai.,v A -m.. .a'.ion (Received July 19, 5.5 p.m.) LONDON, July 13. Features of the Stock Exchange, during the past week have been the rubber share boom and the marked strength of gilt edged stacks, the latter of course being responsible for the decision to issue tbe Commonwealth’s loan forthwith. The Rubber Boom. The rubber boom on Monday produced the wildest stock exchange scenes witnessed since the war, feverish buying being carried out without regard to price or values of particular shares. This wild orgy. received a check on Wednesday, when, in consequence a slight reaction in the price of raw rubber, tens of thousands of shares were rushed on the market. These, however, were soon absorbed, and the market rallied. No real slump in these shares need be expected, till the price of raw rubber drops considerably. Hitherto the Government has refused to interfere in the Stevenson production control scheme, regarding the present fancy raw rubber prices as merely a temporary phase, which will soon right itself. The Commonwealth Loan. The Commonwealth’s loan policy departure in going to New York for threequartera of the present loan requirements, has occupied a conspicuous place in all financial commentators’ writings, both in the daily paperis and the mdre considered judgments ,of weekly financial reviews. The London portion of the loan has been well teceived and will meet a giltedged market, which lias steadily improved in the past three weeks, under the influence of the Bank of ISilgland gold position, and strong bank returns. London’s Position. Now that the Commonwealth’s arrangements have taken a definite shape, the reasons and influences which brought about the decision partially to fotkake the London market, form the basis *of innumerable newspaper articles upon London’s general position as lender to the dominions and colonics. The tone of the financial writers’ comments upon this subject seems everywhere to vary, in accordance with their views upon the wisdom or otherwise of the recent return to the gold standard.

“The Nation,” for instance, says: “The financial press does not seem quite clear as to its attitude towaids the Commonwealth’s decision to go to New York. Oh one side, it is argued that we have dangerously over-lent, bad trade and over-high . consumption havihg reduced our capacity to lend abroad.”

“The Statist,” on the other hand, says: “It is urged that only by lending abroad can trade be improved. There are many factors tending to check over-lending, but the effect ci the Trustee Acts has been to enable colonial governments, whatever their financial record or capacity, to raise money on almost as. good terms as Britain. For our part, it seems more important to know whether Australia has been over-borrowing or whether we have been over-lending.” Other writers emphasise that the return to the gold standard was decider upon with the dominions’ concurrence and support, and it was probably recognised at the time that it would necessarily entail limiting London’s external lending.

•Virtue of Gold Standard. “The Statist” welcomes, as a virtue of the gold standard, the lact that n. has given a clear indication how far the country is capable of lending abroad. To the argument that the embargo on foreign investments, and the necessity for the Commonwealth to go to New York, proved that the gold standard had been inimical to the country, “The Statist” replies that the country cannot lend more than it saves; that Britain at present ,is barely making ends meet, and that consequently the gold standard’s automatic check to over lending should be welcomed. Wool Outlook. As the, results of the London wool Bales, both merino and crossbred infused a better spirit into the raw material section of the Bradford trade, but developments at the manufacturing end have been more disappointing than was anticipated a week ago. New business in partially and fully manufactured goods lias not increased to the extent expected when the sales opened, owing largely to the wages dispute caused by the employers’ intimation of their intention to enforco 5 per cent, reduction of wages, and as the workers are determined to resist, a strike appears inevitable from present indications. In view of this possibility, neither spinners,, nor manufacturers are anxious to buy till the outlook is clearer, with the result that neither the London nor 1 the Australian sales had much effect on Bradford, where prices for tops have not followed the lead set by raw material.

Produce Market. A continuance of diy weather has had the effect of increasing butler and cheese prices. It is noticeable that Australian and New Zealand butter continued to harden in spite of a slig.-a weakening of Banish. The former has advanced even since Thursday. Arrivals from Australia and New Zealand during June were heavy, ami there are extra large quantities in cold stores, but in view of tlm expanded eoieonnptive demand, it will all be needed. The trado forecasts linn pri'-i-s belli lor butter and cheese for Mime, time to come. Fruit Trado. The canned and dried fruits trades have both been quietest. The latter is suffering a lull following on heavysales, prior to the removal of duty. It is too early to say whether seller.- will be enabled to maintain the present prices.