COAL STRIKE AFFECTS TRADE

Star (Christchurch), Issue 17890, 5 July 1926, Page 6

COAL STRIKE AFFECTS TRADE

LOWER SPENDING POWER REFLECTED IN FEWER PURCHASES. COLONIAL PRODUCE IS BADLY HIT. By Telegraph.—Press Assn.—Copyright. Aus. and N.Z. Cable Association. (Received July 5, 8.5 a.m.) LONDON, July 3. Although the hoped-for reduction in the bank rate was not made last Thursday, the Stock Exchange expects a reduction, probably to 4 per cent, and, in anticipation, all gilt-edged stocks are firmer. Commonwealth scrip has improved to five-sixteenths discount, and it is confidently expected that the discount will soon be wiped off. In other sections of the Stock Exchange business is on a small scale, but the tone is confident, and hopeful views are expressed that the coal strike will gradually collapse. “Despite all unfavourable influences, the first half of 1926 has lieen a satisfactory time for investors,” says the “Bankers’ Magazine.” “The value of 365 representative securities increased in the six months from December 17, 1925. to June 18, 1926, by £76,653,000, eighty-seven fixed interest stocks having risen from £4,075,633,000,000 to £4.131.392,000,000 and 278 variable dividend securities from £2,388,890,000,000 to £2,408,793,000,000.” Produce Trade Suffers All branches of the Australian and New Zealand produce trade are suffer ing severely from the effects of the coal strike. With the resulting unemployment in all industries dependent on coal, it is estimated that nearly three million workers are not earning money. Consequently, the spending power in

the industrial districts is enormously reduced, and the consumption of what may be regarded as luxury foods, such as butter, apples and dried fruits, has greatly diminished. Other more essential foods are also affected, and the demand for frozen meat and cheese has fallen to very small dimensions. Worst Apple Season. The apple trade is probably the greatest sufferer from this condition of affairs. Prices continue to decline, and even at 6s to 8s a case the demand is insufficient to clear the arrivals. The question of holding some of the apples till the glut of soft fruits is passed has been considered, but found inadvisable, as the first Americans are due to arrive at the beginning of August, which is much earlier usual. There seems little hope for any improvement in prices, and it is generally believed this season’s results will be the worst in the history of the apple trade. Dairy Produce Hit. Stagnation reigns in the butter market, and sales of Australian and New Zealand are almost negligible. Unfortunately the decline in the consumptive demand came at a time when Coni tinental production was at its height, and we have been receiving heavy sup- ! plies of Danish and other European butters which have been offering cheapier than colonial. Now, however, the full flush of the Continental production is over, and Continental supplies will decrease, so importers are hopeful that the worst is over, especially as the quantity afloat from Australia and ( New Zealand is much less than last Wool Market Confident. Regarding wool, the “Economist’s" Bradford correspondent says:—“The conditions of the market are better than might be expected. The mills are beginning to fee 1 the pinch of the coal shortage, and production in all departments is being curtailed, but there is a strong belief in the ability of the trade as a whole to make a good recovery when the fuel restrictions are abolished. This quiet confidence Is largely responsible for the steadiness of values. A feature of the trade is the brisk demand for home-grown fleece wools at country sales, prices for many descriptions being well nbove those obtainable at Bradford.”