TRADE DEPRESSION

Wanganui Chronicle, Volume 73, Issue 413, 3 November 1930, Page 7

TRADE DEPRESSION

“HAS TOUCHED BOTTOM”

COLONIAL BUTTER VERY LOW DANISH 40/- A CWT. HIGHER WOOL MARKET IMPROVEMENT [By Telegraph—Press Association —Copyright! Received Nov. 2, 8.40 p.m. LONDON ,Nov. 1. The fortnightly account on the stock exchange, which closed yesterday, was less depressing than its predecessors, although, of course, some markets were disappointing. Tho most satisfactory feature was the strength of gilt-edge securities, especially British funds, which have been iu great demand at rising prices. This is regarded as an indication that investors are now going for “safety first.” The banks and other important financial institutions have been buying British funds largely and several of these reached record high prices, some showing an advance during the last week ranging from 20/- to 31/3. In sad contrast is the position of Australian stocks, which arc marked down to levels which nobody would have thought possible. Financial writers are pointing out that at present prices many long-dated Australian stocks show yields, reckoning redemption, at between 6J and 71 per cent, while some short materities yield over ten per cent. The present, therefore, seems a golden opportunity for courageous people to invest in Australian stocks. Much Capital Available. That there is a vast amount of money awaiting investment, is shown by the heavy over-subscription of all recent capital issues, and if only we could get some reassuring news from Australia, there is reason to hope that part of this money would go into Australian stocks. Business people arc at last beginning to find some little rays of hope in the situation, and the opinion is expressed that the worst days of the trade depression are past. Thus the Federation of British Industries, in a forecast for tho fourth quarter of tho year says: “It seems almost certain that some of the more persistent causes of our industrial ills are at last about to undergo a permanent change for the better. Already the international gold situation is perceptibly easier and the world credit situation is less rigid. Shortterm money rates in. the principle centres, except Berlin, are at the lowest level since the war and show signs of remaining there for some time. In addition, judged by the results of certain recent capital issues in this country and the United States, long-term interest rates are beginning to move in the same direction, though they still, have a long way to go before the price of capital is down to the level required to restore the balance between investment and saving. The forces responsible for the world collapse of prices appear almost to have spent themselves and in this sense we may be said to have touched bottom through the depression. This docs not moan either that an immediate recovery is in sight or that there will not be, further falls in individual groups of prices from now onwards. However, the forces, making for recovery should slowly begin to assert themselves. Unfortunately nothing can prevent the coming winter from being a period of difficulty, though tho spring should see some improvement, Butter Still Lifeless. Butter position show’s no improvement for prices of Colonial again have fallen back and the demand is very poor. A striking feature of the market is the contrast between Danish and Colonial, for though the former has weakened this week it still is almost 40/- a cwt. above Australian and New Zealand. This is mainly, due to large purchases by Germany in anticipation of a higher duty shortly to be imposed there. It is also reported that some Australian, New Zealand and Argentine butter has been purchased by Germany for the same reason. Meanwhile Australian and Now Zealand butter is being offered by retailers at 14d and 15d a lb. without having any applicable effect on consumption.

The wool trade is displaying a more cheerful tone, and according to a Bradford correspondent, although it is not possible to discover evidence of any great accession of business, Colonial tops are satisfactory. It is known upon reliable althority that the improvement in botany spinning now accounts for some mills running full tune, and that consequently there are increased requirements. The result is that tops on contract are being taken up in appreciably larger quantities than recently. The botany departmen* trade, apparently, is getting into much better trim and any other development would indeed be remarkable considering the level of values ruling for a superior article.