LONDON STOCK EXCHANGE

Timaru Herald, Volume CXXV, Issue 18354, 27 August 1929, Page 12

LONDON STOCK EXCHANGE

Monetary Conditions Uncertain. PARADOXES OF MODERN LIFE. (United Press Association—By Electrlo Telegraph—Copyright.) LONDON, August 25. Although the holiday season is at its height, and business on the Stock Exchange is somewhat restricted, the tone of most markets is cheerful, and prices are well maintained. Unfavourable monetary conditions. especially the heavy drain of gold from the Bank of England, and anxiety regarding the result of The Hague Conference, might •have been expected to cause depression and nervousness; but the reverse has been the case, and with giltedgeds leading the way, almost every section is showing an improvement in prices. Gold Outlook. The news that Australia is shipping £1.000.000 in gold has been welcomed, being regarded as evidence that Australia is anxious to help to improve our monetary situation. Regarding this, the "Financial Times” writes: "Australia has a direct interest in the monetary condition in other parts of the world, especially in London and New York, on account of the essential part which loans play in the development of the country. The Federal Loan Council had hoped to borrow further in London shortly, but the trend of events has put that practically out of the question, while the general hardening of money rates is likefy. in the course of time, to react on those ruling in the Commonwealth itself. "In such circumstances, it is obviously to the advantage of Australia to take any steps likely to retard or prevent the development of still more unfavourable conditions in London. It Is to this purpose that the shipment of £1.0001,000 by the Commonwealth Bank and other similar ones are believed to be in prospect, and will be devoted to building up the Bank of England’s gold supply. This knowledge has already had the effect of increasing confidence to some extent, even though it is recognised that the shipments will replace but a small part of the amount recently withdrawn from the £ank of England.” Spending Comparisons. The Westminster Bank Review con)iins an interesting article on the sublet of pre-war and post-war spending, fci which the writer says: "Nothing tends more gravely to perplex the serious observer of contemporary British social life than the paradox of continuous industrial depression on the one hand and increased popular spending on the other. The coal-mines are closed, or partially closed, the cotton mills are working short time, and appalling statistics of unemployment are published; but yet there is evidence of the spending power of the country being greater than ever. Not only are vast sums spent on amusement, but there is greater leisure for people to enjoy pleasures. Motor-cars crowd the streets with evidence of such cars by no means belonging exclusively to the wealthy class. People are better clothed, and the standard of life has generally been raised.” The writer finds the chief explanation of this paradox in the great change which has taken place since the war in the actual distribution of wealth. In other words, through the re-distribution of wealth the spending power of the mass of the community has been vastly increased. This redistribution not merely consists of higher wages, but of enormous taxation of large incomes and estates, which provides for a large Government expenditure. The World's Wheat. According to a well-known statistician the world’s wheat crop for 1929 will be 413,545,000 quarters, compared with 477,075,000 last year and 441,210,000 in 1927. This year’s crop is 13,000,000 quarters below the average of the last five years, and only the existence of a heavy carry-over from last season, estimated at 60,000,000 quarters, has prevented an even greater advance in prices than has taken place. The world’s wheat supplies for the season 1929-30 are estimated at 473.000,000 quarters. Consumption last season was 446,000,000. If that rate of consumption is maintained, the reserves will be reduced to the low total of 27,000,000 quarters, but, as is pointed out, if prices continue to stand well above last year’s level, the demands of importing countries will be appreciably curtailed.