TRADE
THE CHINA MAIL, MONDAY, JUNE
and
1956.
COMMERCE SECTION
Page
American Situation Third Quarter Will Test London Market
Far From Rosy
New York, June 3.
In the United States headed for a depression?
The experts say: No.
But, they admit, everything isn't as rosy as it was just a few months ago.
Here's how the future looks to the exports:
A wide business upturn is unlikely now.
3. A third quarter letdown will undoubtedly take place with strong fourth-quarter pickup earrying over in 1957.
п
3. The US. economy, despite rome soft spots notably, the auto kustry is still basically
BOUNA
100%
There's a good chance that 1000 will show somo mild gains, or at worse approximate the economie levels of 1955. Give or lake a few points on the bi- dustrial barometer, that will still he a fine showing, the ex perta Insist, Last year was the best in U.S. history.
Slowing Down
Mest of the crystal-gazing so One thing becomes more obvious by day: Few, if and, responsi- ble economie experts anticipate nything like a depression along the lines of 1920,
for has been confined to 1958.
shape." So much so, that he's given notice that his union will now seek a reduced work-week at 10 hours pay in future labour
negotiations." Meanwhile the government has labelled four manufßcturing centres as "dis-
*This
This past them to Federal afd. week 03 milon in defence con- tracts were alloted to the hard- hit Detroit area. This will help some, but it will not solve the industry's problems.
US Economy
WEEKLY US
Barely
TEXTILE Escaped Crash
SOME LETDOWN IN ACTIVITY MARKETS
IS GENERALLY EXPECTED
By JOHN MORKA
New York, June 3. The third quarter appears to be shaping up as the test tresaod areas". entities ground for the U.S. economy. Some letdown in economic activity is generally expected. This will probably be due to the usual summertime shutdowns for vacations, plant rehabilitation--and in the case of the auto industry for model changeovers,
The stock market meanwhile
continues on the defensive. And This f
le worrying a lot of people, of whom look upon the
market as a reflection of things
ما
10
come. The experts see the 14,000 million loss market
in valuations was largely due to They see the technical nature. market softness resulting not so much from selling pressure as from a contraction of buying in-
terest. Investors,
of Rom
They talk more in terms the economy slowing down to "rot from a gallop". Others see it as undergoing a period of "cronomic digestion. Still others
talk in terms of "rolling adjust- ment".
Hut one basic fact stands out
all the talk In all
and speculation about the future: À lot of people are still working, making than ever before more money and are making big plans for spending it over the next few months. Anh, business. too, shores in this optimism. They're planning to spend a whopping 39 billion
to back up dollars their confidence in the future.
But despite these evidence of plenty, a lot of Americans are showing increasing concern over the
failure of corne segments of economy to keep pace with the high level of activity elso- where.
Thoro 18 a lower
It's reasonal,
are appaently willing to remain on the sidelines perkling some further clarification of the eco-
A favourable aspect of the selloff han been the market
tarve any
scale absence of liquidation. Trading in the past
weeks the market closed lower in 18 out of the last 16 sessions-its failed to hit the 3 Another million a day share
The key to the future, in the opinion of many, is whether the generally anticipated third quarter letdown will
be more than seasonal.
HONGKONG STOCK EXCHANGE
(From Our Correspondent)
Stock
strong clamerst in the market Business done on the Hong- eusiness is the apparent disin kong
Exchange
this Institutional | morning amounted to ap clination of large
$500,000. Noon invatora--¿quats, pension fundh, proximately cle-to unload their holdings. quotations and the morning's
transactions:
Still Strong
in
Shares Duyers Sellers Salta
BANKS
up.
Steel Wages
Increases
REVIEW
By C. T. Hallinan
London, June 3. Stock markets ended this, past week New York, June 3. Sellers of groy
and absolute flat, having escaped an old- finished cotton goods last fashioned "1929" crash by inches or by, week reported one of the
dullest trading periods of say a half-hour.
the year.
The gradual
Blow-
business down witnessed during the
month of May came to a virtual stands while buyers divided attention between the "realsigh" weather, with the autverce affect
In retail apparel sales, ́ and the sagging stock market trend.
The mid-week Memorial Day observance, along with erratic
The index of the market value of high-grade industrials fell 5 full points, on Friday to 176.1 compared with 181.1 on Thursday and 191.2 a month ago. This took place in complete disregard of a brisk recovery in Wall Street and meant that the Chancellor's repeated warnings against the "wage-price spiral" had suddenly struck home.
price swings in raw cotton, and Dangers had suddenly become vivid.
"The record shows," the Bank cloth, yarn fabrics concluded, "that money wages for two months ahead. have risen faster than produc-
MORE INTEREST cars tivity and that the average unit
increases In
deliveries,
Marked Down
Ban On Consignment Of Black Wool
the impending vocation period Tor mill and finishing plant But the Chancellor la not in Feature of foreign bonds was workers, proved additional |o very strong position, political- the exodus from the Berlin & handicaps, mill executives said. ly, it, months ago, he had cam-porcents bonds which fell from There is 110 unanimity" of The Guaranty Trust Company
Brokers reported most of the palgned to induce the company last week's £100 to £80%, the opinion on this score. Some inot Now York, in its monthly re- sist that certain minus signs in view of business, finds that there but despite the practical
Interest wea "conversational," managements to reduce prices selles were obviously convinced busi-and not to increase their that the current negotiations the economy will have been cor is now "undeniably a wage price ness stalemate, prices held dividends his appen! to
tending
the over the resumption of payments 15 rected by autumn and thus se: [opiral which
to steady in most categories. The leaders of the trade
unions
on the Berlin dollar leans bora a base for a fourth quarter pick- |cheapen the dollar and which redison, experts saki, is the fact would go down better. There no good to the sterling loan. can be eliminated only if wage that the mille still have sub-is still o boom except in the Other Germans were moderately
held in line stantial order can be
backlogs. with Many feel that the new model with pins in productivity."
motor industry and It sulllow with Potash 7 per cent down production on some basic print makes a notse ilke a boom with 1 and the Dawes and Young autos will get a good reception
carmarked higher from the public and help ease
earnings and in many, Loans down 10/ - United many cases. higher dividends. Press. conditions in the industry-now under pressure from a backlog
A "wage treeze" unaccompanied of some 900,000 unsold
by a "dividend freeze" (whether Experts will also be watching to labour cost has risen according- Moreover, buyers stanted to voluntary or involuntary) would see how the public spends at re-by, not only during and since show a little more interest in appear to be extremely difficult. tal levels. When the consumer World War II but for some years future
although withdraws from the market, the befort,
actual purchasing was negligible, repercussions are felt all down
a business The Bank finds that the total pick-up can be expected some-
Some quarters felt the line - even to proposed
British Government stocks feil average hourly time between mid-June and the heavily all week, down at least capital goods programmes,
carnings of factory workers be fourth of July when the aute 20s with tween 1047-49 (base period) mobile industry, and the apparel Daltons" down 26s 3d and War Old Consola and and 1855 amounted to $1 per trades will begin ondering for Loan down 231 the railway cent, equivalent to a compound new lines. mte, of about 5 per cent annual-
nationalisation bonds slumped drawn A chearing note was ly. Prochieivity or average out from Agriculture Secretary
Mr 278 Bd. put per man-hour, also has risen, Benson's announcement that In some Except in 1951, productivity has some form of help for US inchided on allowance for going "black" wool at Newcastle
hourly lagged behind
earn- textile mills is "inevitable" to ex-dividend but the picture is Automotive products generally base period. The rise amounted port market.
ings, in relation to the 1947-48 help them compete in the ex- fairly accurate in reflecting the caused cancellation of sales account for about 20 per cent of to 30 per cent, representing on Department has been
The Agriculture
fcar that
the prevailing high in that centre scheduled for studying Interest rates must persist for the retail dollar
annual rate of about 3% per subsidy schomes to overcome the
next week. of advantage of foreign mild which a
whittled lower.
Storemen who buy ras
Leading Industrials were, vir-handle wool tually all marked down to dise missed. courge selling. Rolls Royce and Unilevel lost
Those moves were: announced 4 shillings
like today by the Sydney" wool sell- dustry has been saying that any wages, productivity and prices paddle improvement although followed by store shares wage rises will have to be offset i holds true over, a longer perioniche majority indicate
con Woolworths, Marks and Spencering brokers and the New South Some and Great Universal Stores all Wales, and Queensland Wool {tinued."quiet" market. also, the Bank insists. It cites
Joint negotiations
grey goods sellors may want to downs around, 39 while austere Buyers Association. In report could have significant effect on National Association of Manu get the goods through the dye saves like Courtaulds, Imperial statement, they said a ban eccom half business prospects facturers in 272,00 22.10 3000 0 2150
house before the vacation clos-Chemicals, Bowater Papers and certain wools frad been directed this connection. and price patterns. Present wage Titled "A New Force for India ings get under wayUnited Associated Electric lost around by the Australian Workers Union
24 0d,
as part of its current' quarrel pacts expire
Juno on
30.
tion," It's caused considerable
with wool growers over of these enjoy a certain interim award, that reduced the There has meanwhile been con- comment in American businesƏ,
amount of automatic, buying on wool allowance siderable buying of stood for in- ventory on fears of strike this
circies.
payable and may display
shearers, strength when emarkets open on Monday.
NK Bank East Art
1340 1000
230
10 1045
INSURANCES Lombard SHIPPING Waterboot
40
20
DOCKS, ETC.
100 m DO
Wall
feet that basically the economy le stroną 's felt prices will get a lift as the uncertainty clears. Black- stopping the market is the ex- pectation of high earnings and dividends, easier credit, pros pect of a boost in steel prices.
soft spota Offsetting these
K. Whart col1⁄2 the economy, are near-capacity
Deck trend in operations in many other impor- Prov. 10 18.40 1939 agricultural machinery. Fartist segments. Construction -----
Wheelock mer income is down and they desplie a 20 per cent lag in home are not buying like they did last building-wil set now records HAND ETC.
Hotel year. Consequently the indus. this year. Operations are at or try has had big inayoits and pro- near peak levels in the basic metais, coment, paper and indus- duction cutbacks.
Lial machinery industries.
Humphreys
43
Right now the retail volume has been at a rate of about 575 million daily compared with about 555 million a year ago.
100 07 Attention will also be focuss|ront;
ed on the current stoel wage 8.70 6.75 4500 e 8.70 negotiations. Steel unionSTĒM
presenting some 650,000 in the Industry-aro demanding sizable incrcases. The steel in- wage
13.40 13.00002
+
Physical Output
The relationship
As
cases the
declinca
'colton' cheeper than belg og while Instond
markot mained dull and featureless.
US mile
The hard· ́ ́fibre
to
17A0 Forsley.... 1.43 ATS 2000 y 1.45 RUBBER
Rubber 12
4000 # 1.5A 32,000 0 1.30 1420
2001-376
by price increases. outcome of
the
tha
"
0,70
23 1500 10,00
Also on the downside is the
Α. Steel production which many television and appliance indur-
Trust tries, cotton and synthetic tex- think will caso 10 to 15 per cent
UTILITIES tiles. And just this week the from current levels this summer
Train rubber industry-hit by the set-looks for a good fourth quar- Y'mati Ferry 100 200 bock
The Industry te planning. Light (of 23.40 22,00 1300 or 22.50 in autos-reports mounting ter.
(N) 19.00 Light to spend billions for new expan ectric 304 305 1500 ( 3014 tyre stocks, also some layoffs.
Undoubtedly tho trend in slan
Bonus 2.30-
Rus, 10 20 10.43 200 10.30 In a comparison with record Macao Elect these industries is mildly down. But in the overall a lot of people 1955, the US, industrial machine Telephone 27.30 22.00 2600 10 72.00 still stacks up favourably. Steel still have jobs.
200 g 11.70 1097 00 ingel production last week was 23 per cent better than the Cetnent 341 94% 1000 * 367
28.70 pace; electric
STORES, ETC.
Dairy....
10 10.10 Watson
10.30 10.30
Sincerta COTTON Nanyang
Big Worry
In fact more people are work-year-ago
cent.
Rt. 11.00 11.00
INDUSTRIALS
ing now than it this time Tasti output, up 11.8 per cent; blo year. Total employment in the nous coal production, up 5.9 per US. in April was 63,990,000. | con
And stock prices at the 30 in- This is a riso of more than
in the Dow-Jones 61,685,000 over March. In April, dustrials 1959, total employment Was average were still higher by 114 01,605,000, Unemployment has per cent. gone down also. In April the Jobices numberect 2,004,000,
decline of 270,000 from March.
April
total is a 19 per cent
The
Good Reading
Earnings of major" 'corpora- tions-outside of mustos and auto
Textiles MISCELLANEOUS
·
5.20
7.00 0,33
Yongtae.
Ained
500 G 10.40
300 g 1.80
Thus
thio
Rayontruderą "reported a
a
Press,
.
Ceylon Government any decline Between 1939 and 1953, the Helps Private Trade
All
of Foreign Bonds
the
Sydney, June 3.")
A ban on consignments of
refused to today were dis-
ors
an
0
Wool buyers and brokers ha pointed out that sales might become impossibio In New South Wales' until the dispute ended and buyers would want to be as sured that they could", operate discriminating against certain
summer.
'NAM sald, the pay received by This was a holiday shortened
in employees
manufacturing work for Americans. Auto pro- plants for each
Colombo, June 3. men-hour of ducts hit new lows for the year,
The Government will assist working with many plants remaining shut their work increased by 180 per private trade to enter
same period, agreements for the purpose of
Oils lost ground despite their down over the Wednesday holl- cent. During the day until Monday in order to the physical output per man-importing various types of goods prestige and 2000 GÒ CÔNG
handsome hour rose by only 28 per cent from China farther balance
quarterly earnings report: issued Production
wools. By allowing the import of during the week by the Royal This The result was a rise of 119 par against dwindling salco.
government Dulch-Shell group. Shell held week's production will probably cent in average labour cost per Chinese goods the
They would also want to to unit of product.
intends to reduce the amount its ground but Royal Dutch lost know they could ship their wook be under 100,000 compared
dus do Ceylon from China on 78 d. British Petroleum 4s 6d promptly without the risit of its The index of industrial prices rubber sales. 5.30 4000 y 5.30 143,000 a year ago. Production
and Burmah is Ud.
being declared "black" so for this year totals 2.7 million.
increased by 100 per cent during cars and 491,623 trucks. A year the 1939-1955 period, according Chinese goods
Inquiries reveal a variety of
Mining shares were largely unionists who handled tr will have 1
out of the picture,
United Press. ago, equivalent output: 3.5 mil-
NAM
market in Ceylon. These woods Ilon and 514,511 trucks.
consumers included textiles, chemicals, iron Mcwhile the "Federal Reprice Index advanced by 93 pe stuffs. goods
toys and preserved food- serve Board-under fire for its cent, thus cutting labour gains Meanwhile, members of the "ight" "money" policy aimed at in real wages to 60 per cent. Ceylon Teachers Association Curbing inflation and price spirals
"The balance or labour's wage who retruned from an educa gives to overt sign of retreat- 12.40 ing from its position. Somo son gains in excess of the increase in tional and good will mission to Red China said tho Chinese absorbed by were developing along with their the Board's decision this past productivity was week to buy Treasury bills in decreases in the shares of the armed forcas educational end open market operations a gradual gross proceeds of private busi health programmes
to some a hardly noticeableness going to other arments of dustries. shift in the direction of easier the economy," according to the
NAM money.
trop from the April 1955 totals, parts are high. The only major Exchange Rates
when it was 2,002,000.
But the big worry right now la the auto industry-and to a limited extent, the erratic nature of the stock market. Some 14,-
-800
Industries to register lower carne- ings at the first quarter this year were aircraft manufacturers' and. railroads.
|
Business was done in the local unomelat exchange market V.B. dollar (per $1) 'morning at the following rates:
Sterling notes (per 21)
this
5.80
15,70
Australian notes, (per 21)
and dividends will surpass the
Indonesian rupiah (per 100) Stain tical (per 100), Singapore (Straits)
17.10
20.40
1.82
1958 totals-United Press,
And the experts think the next
·000 million in market valuations | few months will make for good have eroded since the highs of reading also, some say earnings April 6.
Autos-with stoel-are stered major props to the U.S. economy. The reason is obvious. It is the biggest user of stret ask rubber. Its also a major user of plass, copper, zinc, lead, aluminium and a host of other
materials.
The news here is not good. Sothe:900,000 new cars are jam- ming dealers' salesrooms all over the country. Many of them are boing
sold at tremendous die- counia. The long-awaited spring pickup tinn apparently failed to matorialise. It now looks that
the industry will have a tough
Job whittling about 100,000 cars from current inventory totals.
men have
Meanwhile top Industry okes
revised downureus. their sales
A few months ago many hopea
Cotton Futures Mixed Week
By William T. Plunkett
New York, June 3.
Cotton futures ended a holiday shortened week of slow trading with mixed price changes.
At Friday's close the list ruled eight points lower to 26 points higher, or 40 cents a bale to
Wage Increases
By buying in the open market
the Rerve adds to the volume
of credit in the nation's mone
the Meanwhile
4
and
in-
In her Ave-year plan, China made provision to build 60
The US Steel Corporation universities. The Chinese Gov.Į found also that between 1940 ernment has said it intends to and 1985 the average annus invite foreign students to Chino. increase in its employment costs-United Press. per chiployeo hour amounted tò.
3.0 per cent and the overigo an
tary stream. Thus far, however, Dual increase in all costs per The Bank Of England
the Federal Reserve is showing employee hour was 6.6 per cent, no algns of paniciting into fifte
Prlics of steel increased from
Statement
$1.30 a bale higher than the preceding week. thinks indation, rather than do resulted in widening the per- Babile; oppos
Luidon, June 3.
state
Other sacurities
Ing the credit clamps it imposed 1040 to 1955 by 119 per cont, the in Amell by raising the redis company, formd. But, it added count rate the ath such our taken by the cx while the industry was forced to The Bank of England perts to mean the Board the raise its prices to hoip ander ment for this week ended May nation's menoy managers still write these new employment 30, reads as follows:
coats
"none of that increase has now in eirculation nation, is the potential dan contigo spread between coster Private p to sell about 0,500,000 autor but tract adjustments dominated the tlon of first notice day-June 23
Preoccupation with July, coo | Some July buying in anticipo- | to the nation's well-being.
and-males prices since US stoel Government UCITELIGE now it's felt the industry will market until the end of the plus smail certificated stock of
Last work, with the stool in-income as a per cent of mio was n do well If it solt 5,800,000.
Production meanwhile is being when Washington, develop- 11,973 bales and in expressed dustry lockcod in negotiations loss is 1955 than in 1940, despite Radio,
18
theory that cotton cannot be with the militant steelworkers" 1955% higher rate." cut back in line with reducodents came to the fore.
Smant post holiday miles in bought the spot
at union, end with other industries market demand. So far this year, it's new crop months reflected: prices that would be proffiable expected also to press for a new about 24.5 per cont below the
round of wage oculation, as 1. A higher, anic-viny parity to tender on contract,
there your age levels. About the only price; 2. Patponement of gov good news three days is in truck arment spies for export out of a New Orleans am held 50,000 to the fandtionary (12 ung); am The Bapie finds "beyond que
One market source estimated was considerable. production, only about one per the surplus stock for two weeks; tales of Jub in the New Yorke plications of wage rites. Steel in- tion that a rias in unit labour cent below the year-ago pace. 3.Agriculture Secretary
Bad Shope
"
Deprived
TYPHOON MAD
with revised codes in forte as from
1st April, 1956,
The Bank Of France
Statement
Mr Látil New Orioana markets on | dustry," Jinx/kirg à nhà: sóme.gov.dicost his been' roughly parallelody: The Bank";of France ( state-
Paris, June 3.
$5.00 MOUNTED
Benton's announcement of bene that
In
leading spot firm bold a gruncak authoritie - link the by the nerouse in the price of it payments 'Under the soll bank, position of about 10,000 baies in mability of the dollar to sa the product, Workers, accords ment for the week ended May Now •BOYDE 109,000 Dasto low to farmerho take the market
- balanced bowworm a rise in waggeringly have had to pay more for 36 reads as follows: "werbera aro Joblean. Thousanda excess acreage ourt of produc
Techniciis said they wasted and productron. One of the their product
stel how much higher the most widely held views today dem July price mano end it vill that union wure may dah mend the Bank acid become hvailable for tender, wage but that unlong threen, £n- that pázwonk "dépendent on fixed 120.
of them, will probably be jobless tion this your ta
inithe auto industry oe well as
in dependent industriesAnd
Bales Held
it doesn't look as if the situation July' contrbela edated
ly contriels edged up to specially since Jus in the host crops the matched by, costos, baconda, mich nie ponatura odia Adver
will improve substantially to the 1478 cons a poundtablished month on Fortich 10inch oplevit, work in enact lowe
'neer future.
drag it the best ferela dni 1-4 näoditha then, 2014 and 3.0, wrilcrosite, are dem.
ight now, accor to: auto settled:/ bacic: 1 do cited the univarable) GTR deliver mocan wand increase ultima infort, leader, walbe
and
$4.9%
South China Morning Post Ltd.
KOWLOO