“NOT YET REACHED ITS PEAK”

Timaru Herald, Volume CXLIII, Issue 20862, 19 October 1937, Page 7

“NOT YET REACHED ITS PEAK”

RECOVERY WAVE IN BRITAIN NO’ SIGN OF RETURN OF SLUMP COMMODITY MARKETS CONVALESCENT United Press Association—By Electric Telegraph—Copyright (Received October 18, 6.30 p.m.) LONDON, October 17. By general consent, the past fort- , night has been the most anxious on ■ the Stock Exchange since 1929; but fortunately the worst seems over. City business men all agree that slump talk is fantastic, and “The Economist” declares that the majority of industrialists endorse the opinion of the 1 Prime Minister and the Chancellor of • the Exchequer that recovery has not 1 yet reached its peak. Little Evidence of Slump There is little real evidence ip British national economy to suggest that a real slump is ahead. On tire 1 contrary, many industries have spectacularly increased their rate of activity in the recover)’ years and there is no sign of any serious decline in the purchasing power of the public. Even export trades are less vulnerable than in 1929, as primary producing countries are no longer dependent on foreign loans. Economic defences are thus sounder than in 1929, and a repetition of such a slump is most unlikely. Big Industrial Profits “Tlie Economist s" quarterly analysis of industrial profits also makes slump talk seem ridiculous. Rises in profits have been so generous that shareholders have received increased dividends at a time when industry as a whole is financing capital growth from its own resources. “The Economist’s” index shows that business activity as a whole is running at record high levels, and therefore it appears that prices of many industrials are below reasonable levels. Commodities The present state of commodity markets is described as convalescent. Wool remains disappointing, and little business is being done at Bradford. Uncertainty over the future trend of prices has undermined confidence in all sections of the industry, but it is believed that there will be plenty of business once a reasonably stable price is re-established. Tire decline has been greater than anyone anticipated. Certain woolbuyers and topmakers have been operating as bears, and many still are offering forward tops at prices well below present values. Butter Market Firm Butter remains firm, with a strong undertone. The advance in retail price has not affected sales, but buyers are becoming cautious and operating from hand to mouth. Cheese is featureless.