* * * * ARGENTINE RAIL OUTLOOK Having examined, in
a spirit of hope, the prospects of Argentine railway debentures—and one or two selected preferences—some weeks ago, I welcome the sudden demand which has lifted prices rather sharply during the past two weeks. At the same .time I distrust the basis of this recovery and shall be surprised if the ordinary stocks, at any rate, succeed in holding their improvement. Speculators in Buenos Aires, it seems, have been buying, doubtless for a quick profit, on reports of an ambitious nationalisation scheme. London buyers took up the running, the market was short of stock, and quotations just had to respond even though the jobbers were not impressed.
The basis of the reports now turns out to be a Bill to be introduced by a private member of the Argentine Congress, apparently supported by the railway unions. Labour support, one imagines, is important, and in principle, at least, I suppose most stockholders in the British-owned Argentine railways would approve of nationalisation as the best way out of a most dismaying situation. But experience shows that the necessary negotiations would be punctuated by wild rumours of the probable basis of purchase and to lengthy delays. There is no reason, therefore, why, at this stage, anybody should get out his slide-rule and try to make elaborate estimates. If I ,held Argentine rail stocks, I would not sell at current prices, but I would not like to buy in any speculative sense on these nationalisation rumours.
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