BRITISH MONEY MARKET.

Timaru Herald, Volume CXXV, Issue 18538, 8 April 1930, Page 9

BRITISH MONEY MARKET.

Optimism Not Realised. PRODUCE PROSPECTS REVIVED. (United Press Association—Be Slectrle Telegraph—Copyright.) LONDON. April 6. Those optimists who anticipated the early reduction of the bank rate to 3 per cent.—some even expected it last Thursday—have been disappointed, for yesterday there was a sharp advance of 8/- per cent, in the rate at which Treasury bills are allotted, and consequently the monetary outlook is regarded with less confidence. The immediate result was a decline in giltedged securities, which had previously been showing an easier tendency, under the combined influences of the approaching Easter holidays and nervousness regarding the Budget. The knowledge that the Chancellor I of the Exchequer will have to meet a deficit of considerably over £40,000,000 is naturally causing anxiety. Another cause of weakness in gilt-edgeds has been profit-taking by speculators who bought at the commencement of the upward movement. In this position it is satisfactory that Australian stocks maintain their position, and have been only slightly affected by the recent un* favourable financial developments; but, while gilt-edgeds have been unsatisfactory, there has been a fair amount of activity in industrials, which is to some extent the reflection of the revival in Wall Street, where there has been a considerable increase in speculation. According to the it is estimated that Wall Street stocks, on an average, recovered fully 50 per cent, of the depreciation which occurred in November, hut whether prices will continue to advance seems doubtful, in view of the weakness in the technical position, and the general depression in trade. At the moment the tendency in New York is very irregular, though business continues exceptionally heavy. The Wool Sales. The London wool sales are proceeding satisfactorily, and when they close on Wednesday it is probable that many descriptions will show an advance of 5 per cent, over opening rates. Commenting on the position, a Bradford correspondent writes; "A marked change has come over the market in the present week. The improved demand for tops, especially j finer qualities, has been maintained, I and an advance in prices has been j made. The hardening of values, which ! commenced when the Australian grow- ! ers agreed with the buyers on a selling ! programme for the remainder of this season, has continued because of the confidence created. Not only have our own importers bought more freely, but it is reported that speculators unconnected with the wool trade have joined in the bidding at sales, having apparently decided that wool at the present price is a good investment. Bidding at the London sales also has become more active in the general sense; therefore wool to-day occupies a much better position than a fortnight ago.” Production of Sugar. An increase of the acreage under sugar in Europe is predicted by Dr. Mikussh, the international expert, who says even if the Soviet's anticipated 40 per cent, increase in sowings is not included, somewhat larger sowings will be made throughout Europe than last year. Price negotiations continue in Czecho-Slovakia, but it is generally believed that the sowings will increase there. In the United Kingdom, Austria, and the Soviet Union the area has been increased, while an increase is expected in France. The increase in Latvia will be from 4200 to 6280 acres. No material change is expected in Belgium, Holland, or the Balkan States, but Polish and Hungarian planters favour an increase, though the factories want restriction, and in Italy the growers have agreed to plant 272.000 acres instead of 282,430, as last ( year. Mr F. O. Light, the Madgeburg expert. estimates the European beet sowings, including Russia, at 2.70,000 acres, compared with 2,650,000 last year. Blended Butter. The campaign against the sale of blended butter in wrappers not indicating the source of origin is being vigorously carried on. and its organisers' activities are receiving much Press publicity. Meantime, the opinions of retail traders on the subject seem divided. For instance, the president of the Birmingham and Midland Counties Grocers’ Association, addressing that body, said the promoters of the Blended Butter Bill might not be aware of the possible injury that would be done to British butter if the Bill became law. The practice of blending butter had made butter more palatable and saleable, and had led to more British butter being sold. On the other hand,a director of an important London grocery store, writing in a trade paper, says it is clear that public opinion is solidly against the continued use of wrappers conveying the impression that the blended butter is English butter, and he suggests that in their own interests the local grocers’ associations should definitely range themselves on the side of the public.