Finance—Public and Private Y ---
A Banker on Industry
ON Thursday last M1. F. C. Goodenough; the Chairman of Barclays Bank, gave a most interesting address to shareholders of that institution, and while, as is customary in these banking surveys, he covered many, points both of an international as well as a domestic character, it is to his observations concerning industrial conditions that I would like especially to draw attention. In the first place, the Chairman of Barclays Bank made it very clear that the depression in trade chiefly Centred in the coal trade and in the ,Lancashire cotton industry. Curiously enough—having regard to unemPloyment and distress in many industrieS—there is comparative prosperity in some of the luxury trades, and inasmuch as our workmen have usually excelled other nations in the pro- duction of high-grade goods, it must be hoped that this skill may ultimately lead to enlarged exports of such articles. - -It is, of-course, quite true, as the Chairman of Barclays 'Bank pointed out, that while economists and newspapers are fond of proclaiming the need for " mass ' production," there is great difficulty in achieving , such production in this country owing to the compara- tively limited Home market, whereas very different conditions prevail in the United States. • • PREPARING THE WAY.
-Undoubtedly, however, one of the aspects of trade during the past year which may have produced a feeling Of gloom can in reality- be regarded as. a preparation for ; better things to come. In not a few industries it has been a case during the past year of facing the music in the sense of facing the -facts responsible for the, present depression Fiore than one big industrial .concern has had to announce a writing down of capital on a .cruelly drastic scale,-while in some other directions this reorganization of capital- has also been accompanied by merger schemes or working arrangements, all having for . their object economies, greater efficiency, and improved Organization. generally. Moreover, as Mr. Goodenough - pointed _ out, much is also being done to develop new outlets for trade and to improve the marketing of our - goods on more scientific lines, though he did well to e,m ph a size . th e fact that -at present tariff barrierS centinue to have the effect of materially reducing international trade. With regard to agriculture, Mr. Goodenough" expressed the view that the Government's scheme for long-term credit which is now in operation shoidd be of ' substantial benefit to many farmers- who have found difficulty during . the bad times where farms have been mortgaged.
THE COTTON INDUSTRY.
In no direction, of .course, _was the depression more Marked during 1928 than in certain sections of the Lancashire cotton industry, mill from announcements Which have been made during the past weak it is clear that this situation is promoting the combination in Course of arianginient with fegafil to 'it great nutnber of mills, such .combination having apparently for its main ,object the elimination of unnecessary' competition and increased economy and efficiency. It is, however, clearly a combination which has only been rendered possible by considerable sacrifices, sometimes on the part of bankers in their capacity of creditors, and some- times, no doubt, on the part of existing directors and officials who may conceivably be affected by the absorp- tion of individual mills into one large concern. With regard to the scheme in general, hoWever, thi Chairman of Barclays Bank Made_ it clear that it would receive th6 greatest. amount of 'encourageinent from the banks, provided it was Approved -by those who would -be principally concerned and who are most able to judge of its merits. That there may be difficulty, as- Mr. Goodenough pointed out, in reconpiling the interests of all parties, including the management, . is. probable: enough, - and no 'doubt • the position of the banks -with. regard to exercising_ any kind- of- compulsion -upon Customers to enter into the scheme is a delicate and even adifficult one. , _ _ .
REfo.sitAxiotis.
Although the subject of German Reparations mays at first sight, seem to be _far removed frOrn trade con- ditions at home, the connexion is, of course, in reality a close and important one.: IL is well, therefore, that on the eve of the forthcoming Conference in Paris we should -have -the -carefully considered views of bankers upon the subject. International trade, said Mr. Geo& enough, " mustrbe affected to a considefable extent by the decisions that may be reached- in regard to Germany'S Reparation payments. ' To follow this argument out m detail would go -beyond -the space of my weekly article, but the mention of even one or two leading points will at once show how closely German Reparations are connected - with our trade activities, and hoiV difficult and complex is the problem which will haVe- shortly to be considered. the moment that Gerinin Reparations are arranged on lines so heaVy as toconstitute an undue burden upon German nationals, we get a position when, under severe pressure, costs of production in Germany are brought to • a point intensifying the' competition of that country with Great Britain and other nations. If, however, on the other handi Reparations" were to be so light as to impose little or no _burden, 'then it might be a:case • of5Gernian industry unduly benefiting when compared with our industry subject to its heavy taxation, especially as many industries of Germany have been aided by- the disappearance of mortgage charges owing to depreciation to the -point of destruction of the post-War. currency. Therefore, there is little doubt that the Reparation,, settlement, which is most likely to be beneficial to all interests concerned, would be one which makes for the greatest measure of stability- and, inci; dentally, one :Which at the same. time promotes politica) Peace and good undentanding.• THE NATIONAL CREDIT.
So much of futbre national prosperity depends upon national ecedit and relief being afforded to the. present burden of taxation, that it is not surprising that in considering the outlook the Chairman of Barclays Bank should have made his concluding obServations deal with the question.of.the National-Debt.: Nothing, of course, -would make a greater contribution to reduced annual outlays than, debt conversion operations on a scale profitable to the Government, but such operations cannot take place until British Government securities stand at considerably above their present level. There- fore Mr: Goodenough emphasized. the fact that each individual might help the Government at the present -time " if he were to appropriate some definite actual sum out of his -own 'money available for investment for the purchase of British Government securities. _ It would," he said, " raise the price of the securities in the market and would, therefore, be particularly helpful to the Government in connexion with their' funding And conversion operations, thus helping to reduce the annual charge for interest on the National Debt by assisting the Government to. float fresh loans on the finest terms. If the Government could be helped .in this way into a position of making a reduction in taxation, the benefit to the country as a whole, and especially to Our industrial interests,' would -be very great indeed:'. - ARTHUR W. -KIDDY.
Previous page
