The Waikato Times With which is Incorporated The Waikato Argus. THURSDAY, JUNE 28, 1923. TRADE PROSPECTS.

Waikato Times, Volume 97, Issue 15276, 28 June 1923, Page 4

The Waikato Times With which is Incorporated The Waikato Argus. THURSDAY, JUNE 28, 1923. TRADE PROSPECTS.

Wo are told by cable that the Stock Exchange in London is under a cloud which at present shows no silver lining. It is a curious thing that stockbrokers and jobbers are commonly all up or all down, and show few signs of the cool judgment that might be expected from men handling large sums of money. The causes for depression are stated to be political, the situation in the Ruhr, troubles in the Balkans, unsatisfactory negotiations with Turkey. These are good grounds for uneasiness, but two -of them have been in existence for over six months, and during that period 'there has been a constant rise in securities, and a most optimistic feeling prevailed. The quantity of money available was to some extent due to European complications, for foreign financial houses sent money to England for investment, but so long as money was plentiful the stock market was cheerful. They are impressed at the moment with the phenomenal fall in'the value of the mark, which opens up visions of the manner in which wealth can take wings. Yet it required no great amount of foresight to see that this would happen. The effect on Germany of seizing the Ruhr may be compared with the effect which would be produced in Britain if the industrial North were paralysed. It is clear that unless the French occupation comes to a speedy end Germany will be ruined, and all hope of obtaining any reparations will disappear. This is a comparatively small matter. It is the effect on trade which is most serious. We are told that prices are falling in the iron and steel trades; the cotton, industry of Lancashire ■ is depressed, and the woollen trade of Yorkshire is getting into the same condition. Orders are scarce, for manufacturers cannot compete with the Continent, which is selling at prices below those which English manufacturers must charge. The injury arising from exchange will be only temporary, but it is serious while it lasts. The French are at present in the stage of rising prices, and falling values for the franc. Wool bought six months back can be manufactured and sold to-day with the help of the exchange at prices with which England cannot compete. The wool bought to replace that sold will suffer, however, from the same cause. How far the franc may fall it is impossible to say, but their position is that each budget shows a heavy deficit; they have large loans maturing in a few years; they maintain a vast army and propose to build a huge fleet, and their plan for making Germany pay has proved an utter failure. Our trade with France never reached the proportions of the trade with Germany, but was nevertheless important, and is likely to shrink. The Stock Exchange has good grounds for regarding the prospect seriously, but they might reflect that although they have not encouraged the French action, they have not collectively opposed it, ami H is this which is the chief trouble. At the same time it' is no good lo shut our eyes lo what is going on in Turkey. We have pointed out several times the probability that the'Turks would refuse to meet the demands of England and France. They are becoming stiffer in their attitude,

and they now refuse to give any guarantees respecting the treatment to be meted out to companies holding concessions. They see that France is engaged in the Ruhr to an extent that paralyses her elsewhere, and they know that Britain would face another war most unwillingly. It may be that we shall be forced into It to protect our nationals, but nothing more unfortunate could take place. It Is no good to wring our hands over the past, but the errors of statesmen in dealing with Turkey are likely to pass into history as the stock example of ineptitude. Turkey must be regarded as one of the outstanding dangers. The trouble in Bulgaria is not- serious if it dees not spread to the neighbouring countries, but that is possible. It is well that the Stock Exchange should realise that trade and finance are dependent to-day to a greater extent than usual upon political developments, for that realisation may be the beginning of wisdom. We shall not escape the effects of European troubles in this country, for it will affect the price of our produce. We are told that the butter market Is unsatisfactory, as heavy supplies are pouring in from Europe. This is, of course, inevitable. Danish butter used to go to Germany, and now the Germans cannot buy. France was a smaller market, but is not likely to be as good as it was. There is no indication that America will alter the heavy duties that prevent the sale of our wool and butter in that country, and we may have to face a period of lower prices. New Zealand Is pre-eminently a country that lives by foreign trade. The level of prosperity would be very much lower if we had to be self-sup-porting. At the same time it would be well if we could avoid the import of coal and of one or two other lines which could be produced and sold in the country if the price were more moderate. There are too many combines and rings operating in trade, and prices are frequently unduly high, which leads to importation of goods which might be produced here. We have said sometimes that those who are interested in prices should look at the cables about the European situation rather than to the market quotations. This is more than ever true to-day.