BRITISH MARKETS

Wanganui Chronicle, Volume 80, Issue 96, 26 April 1938, Page 7

BRITISH MARKETS

BUDGET OUTLOOK NO GREAT INCREASE IN TAXATION ' t ■ INDUSTRIAL PROFITS STILL ’ RISING Received April 25, 6.30 p.m. LONDON, April 23. The approach of the Budget has rarely excited so little interest. An absence of the usual flood of anticipations reflects the general confidence that the taxpayer will not have to carry substantially heavier burdens. One hopeful factor from the revenue standpoint is the increase in industrial profits disclosed by the Economist’s quarterly survey. Profits have maintained almost the exact rate of increase of the previous years, the increase averaging between 10 and 11 per cent. A survey brings out the fact that the ordinary shareholders are not getting the full advantage of extra declared profits as more and more directorates are devoting a large proportion of profits to reserve. The franc is again coming under fire. Reports are current that the authorities have decided to re-estab-lish the franc around 395 to 180 to the £l. The tone of commodities has been maintained, as while opinion is divided about whether the recovery contemplated by Mr. Roosevelt will turn out healthy or unhealthy, the effect of such a vast expenditure can hardly fail to be inflationary. Rubber and wheat have been the firmest commodities. The Butter Market. Butter has retained its pre-Easter firmness. Cold store stocks have increased by 80,000 boxes but there is against this a big reduction in Australian gradings and the cold dry spell is restricting production in Europe. Responsible Tooley Street merchants regard present levels as high, though they admit that speculation may force them higher. Retail prices have not followed the spot market and an increase thereof must affect consumption. Economic Changes. The Westminster Bank review, in an exhaustive summary of ‘he economic changes in the Dominions, considers that the increased -self-sufficiency, if not carried too far, will benefit them in peace or war From the viewpoint of imperial trade it means that the Dominions will be better markets for all kinds of machinery and bigger buyers of luxuries which do not justify local manufacture. The industrial development, however, brings problems. Australia and Canada are reaching a point where they may be benefited more by a relaxation of international trade restrictions than by the rigid maintenance of their own

tariffs. Moreover, the growth of industrial population is not wholly desirable and may cause the Dominions to look askance at immigrants who may swell the workless in the towns in times of industrial depression. The Westminster Bank also points out that the Dominions are becoming increasingly self-ilnancing, tending substantially to reduce activity in the London capital market. Unless redemptions by the Dominions are offset by fresh overseas lending, Britain’s interest from receipts abroad must permanently fall and the balance of payments become more difficult to restore.