26 DECEMBER 1931, Page 30


The atmosphere of practically the whole of the Stock Exchange was altered by the publication of the Hoover proposals, and prices advanced rapidly during the opening days of the next financial period, which covered the time from the date of those proposals until the German crisis developed at about the middle of July. As the international discussion of the Hoover plan proceeded, however, an irregular tone crept into the markets, and uncertainty and disappointment were reflected in definite weakness as the German crisis approached.

Disclosure of the severity of this crisis opened the year's third period, which lasted until September 20th, when the Government of this country decided to suspend the gold standard. In the two months covered by this period international finance was engaged in patching up the German situation, and towards its close this country was struggling to maintain the gold standard in the face of unprecedented withdrawals of overseas balances from London. The uncertainties of the time were marked by a substantial decline in investment stocks, and an equally severe fall in the industrial share market. Both movements were accentuated during the first three weeks of September, and the fact that industrial shares were so heavily depressed, although they rose rapidly after the gold standard had been abandoned, suggests that mere uncertainty regarding the future, rather than definite anticipation of a gold standard lapse on -the part of this country, was the fundamental reason for the decline of quotations.