AMERICAN LOANS.
We are now in a better position to determine the precise significance which is to be attached to the leading feature of the year, namely, the rise in the value of the British pound when measured in American currency. The easier tendency in money rates in New York already referred to naturally raised the price of investment securities in the 'United Stites, and that fact, in its turn, stimulated the demand on the part of the American inves- tor for foreign securities giving a higher yield of interest than Home securities. Consequently, we find that in 1927 the United States is estimated to have lent to foreign -Countries- and to Europe fully L300,000,91:10 as compared with about 1260,000,000 in 1926, and £180,000,000 in 1925. In addition the higher money rates in -Lombard Street compared with New York caused a good deal of money which would otherwise have bten an deposit in New York to be placed here. In other words, the main key to the improvement in sterling is to be found not so much in changed conditions here as in the nature of America's activities and the huge sums lent abroad. Those activities, however, it must be remembered, while strengthening sterling at the moment, give to America an enormous reserve_ control over the exchanges when America is receiving the interest on loans, which civer three years. have exceeded 1700,000,000.
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