EFFECT OF UNCERTAINTY.
If, on the other hand, the decision should be in the direction of an insistence on the December 15th payment with a promise to reconsider the question of future payments later on the first effect on markets would also, I think, be unfavourable, though no doubt some- thing would depend upon the precise language in which the decision was couched. As regards the exchanges, however, it would be felt that there must be a con- siderable further strain for the time being, while as regards our own Budget, prospects of a diminution in taxation would be very poor, and uncertainty as to the measure of the response to be given at some later date by the United States would probably have an unsettling effect upon markets and would occasion a further delay in making any arrangements for the World Economic Conference. Coneeivably these uncertainties with their restraining effect upon any trade revival might involve the continued cheapness of money, and because of that gilt-edged securities would probably improve, but such improvement would also be due to the lack of general confidence, following which no big world trade revival can take place. Finally, there is the possibility that the first stage of America's reply may be in the direction of leaving the matter to the decision of Congress. In that case it is to be feared that the first effect would also be unfavour- able, because the cable adviees of the last few weeks seem to leave us in little doubt as to what that decision would be, and the disposition on the stock markets would probably be to anticipate such unfavourable decision by a further marking down of prices. -