THE WORLD SLUMP.

Waikato Times, Volume 108, Issue 18164, 31 October 1930, Page 3

THE WORLD SLUMP.

LOW COMMODITY PRICES. EFFECT ON INSURANCE RISKS. Striking facts concerning the present slump in commodity prices were presented at a meeting of shareholders in the South British Insurance Company by the acting-chairman of directors, Mr V. J. Larner, says a Taranaki paper. “Shareholders,’ ’said Mr Larner, “hardly need to be reminded that the - company’s operations are carried on in many other parts of the world, the bulk of the premium income being derived from countries overseas.. It is these distant fields that I have in mind when referring to commodity prices.. In India, for example, during the eight months from November to July last, the price of jute fell 30 per cent, of wheat 38 per cent., and of cotton 40 per cent., while the other products all suffered a slump in varying measure. Jute and cotton are the two main industries of India, Calcutta being the centre for the former and Bombay for . the latter. In Malaya rubber has during the year fallen from approximately Is to 4Jd per lb.

Cotton Industry’s Crash.

“There are between 50 and 60 cotton mills in Bombay, representing an investment of something like fifteen millions sterling. Some months ago the total capital of nine mills was writen down from 61 million pounds to 21 millions. At the present time 24 of these mills have suspended work completely, nine of the number having been closed since 1925, while 23 have paid no dividends for six years. According to the latest estimate there is a floating population of at least 60.000 idle millhands in the city of Bombay, with the means'of livelihood for themselves and their dependents cut off. Empty stomachs beget discontent and restiveness, the result being that outbreaks of rioting are growing in frequency with naturally grave injury to business operations. “These conditions are not solely attributable to the fall in world prices. They have been aggravated by political movements. The civil disobedience capaign and the boycott of European goods and of concerns managed by Europeans are all assisting to paralyse the economio activities of the country.

Conditions In China,

“In China contending military factions continued to keep the country in a state of disturbance; famine and banditry also play their part, but in spite of these evils trade-goes on fairly well. The low exchange consequent upon the heavy slump in the value of silver has naturally encouraged exports, although the burden of military taxation and the difficulties of transport, in the interior impose some check on these.

“Our own business In China has, considering the circumstances been very well maintained. * The current rate of exchange, however, has operated very strongly against us In the conversion of silver into sterling. The previous year We closed our books with the Shanghai tael at 2s 4d and the Hongkong dollar at 2s. In the accounts now before us, the rates used are Is 6d and Is 3d respectively. This has meant a reduction of approximately one-third in the sterling equivalent a? the premiums received in currency. As the company has an important business in this territory, the effect upon the figures in our underwriting account will be readily appreciated.

Australian Wage Sheets.

“Nearer borne, the financial stringency in the Commonwealth has already begun to make itself felt in our revenue "figures. To touch on one phase only, wage-sheets in recent months have been getting noticeably lighter, and as the premiums under workers’ compensation policies are based on the amount of wages paid, we must be prepared for a further shrinkage in this department of our acitivities while the depression in Australia lasts.”