General Economic Survey. of the Situation During November 1927
The situation during November has clearly shown the futility of all endeavours to check the declining tendency of prices through curtailment of production and price agreements, when these measures are confronted with a greatly reduced consuming power of the public. The raw sil market failed to respond various devices designed to stabilize the price situation, the average price of "Saiyuto" spot declining from ¥.1,810.00 to Y.1,- 288.96. The level of Y. 1,270.00, the lowest record since 1921, was reach ed at the end of the month. This Gevelopinent which is very disturbing to silk reders, is due to a heavy increase in stocks, these having continually advanced since June, and at the end of November aniounted to 51,948) coli, 11,871 coli more than month ego. The average price of spot rice slumped very badly 'Y.82.20 as against Y.3456 the previous month, owing' to the' offic cial second estimate putting this year's rice crop at 60,810,180 koku which is a great deal larger than the actus! crop yield Inst year and much above the average of the past five years. This slump has taken place in the face of various m sures to ruppert the price of end as it hits the agricultural classe very hard, the Government have bought and stored 500,000 koku of new crop rice on the 24th and will the buyer again for another 1,000,000 Koku should circumstances necessity ate such ection, The cotton yarn market slightly recovered for which the reduction of output may be responsible, although the official estimate on November 1, which puts the Anierican cotton crop at 12, 842,000 Vales is higher than was generally expected. The price of other commodities was lower in general, the price index for Tokyo declining sharply from 181 to 177. The figure now stands at the same level as a year ago, but consider ing the decline of Japanese currency which is $45.99 as compared with $48.72 last year, the intrinsic Value of goods is less by 5 per cent. approximately.
It is expected that the dividends to be declared by companies for the current term will be somewhat smaller in not a few instances, as the business depression has affected earnings during the past your. Moreover, there is, perhaps, less disposition now, with the lesson of the financial disturbance of last spring fresh in everybody's mind, to yield to the clamour of short-sighted shareholders who would have liberal dividends even at the cost of the future liquidity of their enterprise, The delay in re-opening, the closed banks and the cautious attitude of bankers in general, also contribute to a more conservative policy on the part of companies The Suspended Banks Out of thirty-six banks which suspended business during the financial panic, eleven have revived and four banks have made sufficient progress in readjusting their affairs to Fender an early re-opening probable, Deposits amounting to Y.46,274,000 out of a total of ¥.77,705,000 held by these banks are to be repaid to the public in the carly part of December. The new Showa Bank into which most of the closed banks are to be merged eventually will open door on December 1.
The foreign trade balance during November was again favourable, exports amounting to Y.157,074,000 and imports to ¥.145,527,000, but with exports showing a decrease and imports a slight advance, the fa-yourable balance is clearly narrowing as the importing season approaches. The decrease in exports during November was mainly due to reduced figures for cotton yarn and tissues, but raw silk showed a slight increase. As regards imports, raw cotton advanced both in value and volume over the previous month, but the total volume of raw cotton imported since Septem-her, when the important season may be said to begin, was only 515,967 bales compared wit 6 for the corresponding period last year.
The total of exports since the beginning of this year amounted to '¥.1,821,600,000, that of imports to Y.1,982,058,000, the excess of im-
¥Y.834,883,000 for' the same period ast year.
Money Market Interest rates during November slightly advanced the average of the minimum discount rate in Tokyo ing from 1,891 sen (7.8 per cent.) to 1455 sen (7.5 per cent.), The day-to-day rate also rose from 5.8 per cent to 5.5 per cent. The advance in discount rates took place in spite of a decreasing tendency in the total volume of loans by member banks of the Tokyo Clearing House and testifies to the greater caution exercised by bankers view of the approach of the year~ end settlement, in addition to which comparatively larger funds are now tied up in call loans. Calls in Tokyo which decreased to an average of about ¥.60,000,000, showed a heavy increase in November, and on the 20th, the Inst week-end of that month, reached a total of ¥.120,000,- 000. This was due to unusually great activity on the bond and de-denture market. Capital invest ments in bonds, debentures and stocks during November totalled '¥,841,000,000 and constituted the highest record ever reached. Payments for debentures which had been languishing temporarily after tthe spring panic have gradually increased and, in November, amounted Y.112,000,000, Subscriptions for municipal bonds' showed the record amount of Y.119,000,000.
The terms of issue for the Tokyo 'Municipality loan of ¥.15,600,000 as confirmed on November 9 were very favourable to borrowers. 'The interest rate is 5.5 per price of issue ¥.96,50, the bonds being un= redeemable for five years, redemption to be effected within' 29 years by annual instalments, The yield to investors works out at 5.72 per cent.
Text read from the printed page and cleaned; old type leaves the occasional error.