FINANCIAL NOTES.
At the moment of writing it is rather difficult to gauge the measure of response likely to be given to the English portion of the Hungarian Loan. The flat yield to the' investor of over 8f per cent., or, including redemption, over £8 16s. per cent., is, of course, attractive. More- over, the distinguished sponsorship of the Loan will exert a favourable influence, as will also a remembrance of the success which attended the Austrian Loan. On the: other hand, the somewhat premature talk about Bank. Rate has rather disturbed the financial atmosphere. The Loan has, of course, no outside guarantee, but the hypothecated revenues are very large, and the control to be exercised by representatives of the League of Nations is likely to be an effective one. * * * * Second only in importance to the flotation of the Hungarian Loan has been the publication during the week of the Report of the Financial Commission to Brazil, which, at the end of last year, went out at the invitation of the Brazilian Government to investigate present financial and economic conditions in the country and to make recommendations to Brazilian Ministers. The Mission was headed by Mr. E. S. Montagu and comprised amongst its members Sir Charles Addis, Lord Lovat, Sir William McClintock and Mr. Hartley Withers. Their work has been admirably done in the sense that they have dealt faithfully with the magnificent resources of Brazil and also with the shortcomings in the fiscal and currency system, which prevent the resources being sufficiently developed and which. also explain the present unsatisfactory financial and economic condition of the country. Some forty-three recommendations are made by the Mission dealing with the national finances, the banking and currency of Brazil, the railway administration and the general relations of the Government to the industrial activities of the country. * * These recommendations have one and all been promptly endorsed and formally accepted by the Brazilian President and the Finance Minister, and that fact, together with the general tenor of the Report, has been responsible for a material rally in Brazilian securities during the past week. It is, however, at this moment that the real testing of Brazil arises. We know only too well from painful experience that it is one thing to perceive the necessity for reforms and quite another to carry them out. If the recommendations of the Mission, or at least the greater part of them, are promptly carried out by the Brazilian authorities, there should be no fear for the future of Brazil, whose resources are then likely to be developed on lines calculated to bring prosperity to that country. By reason of the deplorable state of the exchange, however, and the mass of floating debt which has to be dealt with, it is imperative that action should be prompt and speedy. * * * * Both from the financial and social standpoint a good deal of interest has been taken in the City in the Welwyn: Garden City project, and it is satisfactory, therefore, to note the progress which seems to have already been made by the undertaking. Of course, projects of this kind make their appeal on other than purely financial grounds, but it looks as though the Welwyn Garden City were in a fair way to a financial success. The chairman at the meeting held last week, was able to show a ;mall profit on the undertaking, and while he reminded shareholders that patience would be required before payment of annual dividends, he added : It may possibly be of some satisfaction for them to know that profits are being earned even if for the time being, they are invested in the company's business.'.'
A. W. K.
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