INVESTORS AND U.S. TRADE On the war risk question I
must leave investors to make up their own minds. Informed City views are still hopeful, although nobody can pretend to be sure. The trade risk is scarcely less difficult to assess, despite repeated official assur- ances that all is well with British industry. The trouble is the accumulating evidence that all is not well with trade in the United States, where the steel production figures and other - significant indices of activity have recently gone from bad to worse. Even if an American slump should develop, I imagine that our own trade recovery has sufficient impetus to carry it along for at least another year, but in its present mood of dis- illusionment the City is peering through powerful telescopes with black-tinted lenses. The lugubrious are asking : What of 1939 and 1940 ?—and are refusing to be comforted.
Unfortunately, only President Roosevelt and his advisers . can supply the answer, and nobody can tell when Washington will make up its mind to move decisively. As I suspected, the alteration of margin requirements in favour of the " bulls " has had a purely temporary influence. What is required is a constructive step which will put fresh heart into American business men and induce them to put extension plans in hand, or, failing a gesture to private capital, public spending on projects such as housing must be initiated on a large scale so as to put the industrial machine into forward gear. I am still convinced that Washington can, if it will, provide the necessary stimulus, and for that reason I still think that while the short-term prospects in speculative markets are uninviting, the medium-term outlook opens up possibilities of recovery. The moral for investors is : hold on to sound shares but wait a little longer before letting out fresh speculative sail.
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