FINANCE-PUBLIC & PRIVATE.

By ARTHUR W. KTDDY.

SPECULATIVE BUSINESS INCREASING. [To the Editor of the SPECTATOR.] SIR,—The firmness of Government and kindred securities during the past week can be directly attributed to expec- tations of the early reinvestment of a portion of the War Loan dividends for over f..50,000,000 to be disbursed on December 1st. As a matter of fact, however, the tendency to which I have referred on more than one occasion for interest to centre upon the more speculative descriptions in railway and other industries is becoming increasingly pronounced, and the following short table, taken almost at random, gives an idea of the movements which have occurred in a few South American Railway (Continued on page 842.) stocks and in certain other industrial concerns during the month of November :—

S. AMERICAN RAILS.

Present

Nov. 1.

Price.

Argentine Great Western 76 • 82

Buenos Aires & Pacific.. 681 .. 84

Buenos Aires Western .. 76 • . 82

Central Argentine ..- 72 • • 77

Leopoldina • • • • 33

88

San Paulo Ordinary .. 111 • • 127 • •

SHIPPING AND INDUSTRIAL SHARES

Nov. 1.

Cunard Ordinary .. 20s. Od.

„ 5 Cum. Pref. .. 92 P. & 0. Deferred .. 300 Royal Mail Ordinary .. 84 • • Vickers Ordinary 12s. Od.

J. & P. Coats .. 64s. Od.

English Sewing .. 45s. Od.

In the case of the Argentine Railways, better traffic statements and hopeful views concerning the new Presi- dential figime in Argentina have ,been largely responsible for the advance. In our own Shipping shares and home Industrials, however, it has been a case of the advance being based on a growing belief that a revival in trade activity is not far distant. There has undoubtedly been a considerable improvement latterly in demands for freights and even in terms—a circumstance which partly accounts for the rise in Shipping securities ; while in the latest figures of bankers' balance-sheets, and even in the increase in industrial capital issues, the signs are not altogether wanting of a stirring of the "dry bones" of tra&. It may be that these hopes of a revival in trade are a little premature, and unquestionably the chaotic state of affairs on the Continent and the fresh collapse in some of the Continental Exchanges must be carefully remembered, for it is difficult to expect any great revival in trade until International conditions improve. The Stock Exchange, however, does not usually wait for expectations to materialize before purchasing, and it has to be recognized that in the indus- trial section there are s. good many prior charge issues of really important companies which stand at an excep- tionally low level.

A point not perhaps without its sentimental influence upon the general views of markets concerning trade prospects has been the dignified handling by the Prime Minister of the unemployment problem. "While insisting upon deputations from the unemployed seeking aid in the proper constitutional quarters, Mr. Bonar Law has lost no time in showing his determination to do every- thing possible in the way of providing relief work. Con- cerning this matter the City is clearly in favour of the provision of work rather than of doles, but it is felt that much skill is necessary in determining the extent to which State guarantees of loans in connexion with relief work should be granted. A year ago when the Trade Facilities Act was passed industrial borrowers had to pay a much higher rate of interest than at the present time, and there was a good deal to be said for State credit being invoked. The same may be true now in the case of certain utility works which cannot be regarded as productive for a very long period, but in many indus- trial undertakings, including railroads, where it is a case of accelerating work on improvements, extensions, electrification, and so forth, the railways themselves will ultimately be great gainers. Moreover, by attend- ing to this matter when trade is dull they will be better able to cope with the position when there is a general revival in industrial activity. Therefore, while the City is in sympathy with the proposals to extend the powers of the Trade Facilities Act, it is felt that in many instances the requirements will be sufficiently met if the Government guarantee has reference to interest only and for a limited period. At present the powers in the Act are limited to £25,000,000, of which about 124,000,000 has been allocated in various directions, though in some of them no actual operations seem to have begun. That in its turn is giving rise to a strong feeling that in the matter of State-guaranteed loans to aid employment

Rise. 6 151 6 5 5 16

Present Price. 23s. Od.

96 880 951 13s. 6d. 66s. 6d. 48s. Od. is. 6d. .. 2s. 6d. .. 3s. Od.

it must be a sine qua non. that the work is started at the earliest possible moment. Not only is that an essential from the point of view of the unemployed, but it is also sound economy, because in the meantime the process of doles continues ; while it is of the essence of the problem that exceptional trade stagnation alone justifies aid on the part of the Government. The more quickly the work of improvement and extension is begun and carried out, the sooner will the country be ready for dealing with the demands of a genuine industrial revival both as regards equipment and the number of men available.—I am, Sir, yours faithfully,