11 FEBRUARY 1938, Page 44


WHEN news of a Hitler coup is followed by depressing un- employment figures who can wonder that markets are limping rather painfully ? The City is reserving its judgement on the German developments, but they obviously add to immediate uncertainties. As for the January unemployment totals, they are bad but perhaps no worse than should have been expected. To count for the " snowstorm factor " in the December figures it is best to compare the January with the November returns. Normally, the seasonal increase in unem- ployment between these two counts is about roo,000 ; this time it has reached 328,400. The motor, textile, tinplate, and certain sections of the metal trades are the black spots, and Stock Exchange prices have again demonstrated their knack of catching the shadows of coming events. All that the latest unemployment figures prove, if any proof were needed, is that trade has deteriorated over a fairly wide front. Is it too late to stop the rot ?

My own view is unchanged that only a sustained business recovery in the United States can prevent the breaches in our prosperity from widening rather ominously in the next few months, but that if America picks up, industry here and the stock markets should be able to recapture a modified momentum. Unfortunately, the American business scene still presents the appearance of a highly-complicated jigsaw puzzle, with certain of the essential pieces held by people who do not seem over-anxious to play. Only when such in- dicators as the figure of the American steel-output, Wall Street's Big Board and commodity prices begin to move forward really convincingly will it be safe for investors to venture far beyond the fixed-interest group of securities. Nor does the condition of politics justify any but the boldest and sturdiest of investors in any attempts to cross on the amber light.