the United States, will produce political developments favourable to a
satisfactory solution of the problem of Reparation Payments and International Debts, the great uncertainty of the character of such developments has to be borne in mind.
Assuming that the Government steadily pursues a policy of rigid economy in the National Expenditure and that attention is focussed on the problem of the adverse trade balance, it may well be that the future will justify the improvement which has already taken place in prices of securities. At the same time, not merely the sud- denness of the change in financial atmospheric conditions but certain plain facts suggest that there is still need for some caution. So far as can be judged at the moment, there seems to be a prospect of cheap money continuing for a .period, and cheap money usually means a high level of prices for gilt-edged securities. At the same time, it is doubtful if cheap money has ever coincided with such world commercial depression and low prices of commodi- ties as that which exists to-day, and until there are distinct signs of improvement in trade here and in other boparts of the world there must still be cause for anxiety th as regards the financial and social outlook. And again, while it may be hoped that the next few months, which will witness elections in France, Germany and
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