Trade Activity
Finance
ALTHOUGH. many reasons might be offered for the continued activity and strength of public securities, undoubtedly the paramount influence at the present time is the growing activity of trade and a, belief in its continuance and further progress. Moreover, this belief has received a further stimulus during the past ten days from the great victory achieved by.Mr. Roosevelt in "the _recent. Presidential election.' At first sight, and remembering the previous hostility of Wall Street and financial interests in America to President Roosevelt's N.R.A. policy, this may seem to be rather strange, but the explanation is, I think, fairly simple and also convincing. In the first place, whether aided by Mr. Roosevelt's policy or not, industrial conditions in the United States have been steadily progressing during the past 12 months so that on the eve of the election there was a general feeling that whether President Roosevelt were to be re-elected or not further progress in industrial activity in America was to be expected. The trade improvement movement had, it was considered, got well under way and would require some exceptionally depressing event to check it.
There were a good many who avowed the conviction that the return of President Roosevelt by a greatly reduced majority was the best thing to hope for, apparently on the idea that a reduced majority would ensure against any extreme policy on the part of the President. NoW, however, that the unexpected has happened and the President has been re-elected with the greatest majority achieved for more than a century at a Presidential election, apprehensions of any extreme policy on the part of President Roosevelt appear to have given place to a feeling that the universal confidence in Mr. Roosevelt expressed in the- stupendous majority of votes obtained, also expresses a feeling of confidence throughout the United States which is likely to ensure further industrial progress, at least for some time to come. That the lack of an effective opposition in Congress is to be regretted is generally admitted, but for the moment such regret may be said to be merged in a kind of national satisfaction that the will of the people of the United States should have been so wonderfully expressed in the election of the Electoral College.
CONDITIONS AT HOME.
This feeling of confidence with regard to trade prospect s in America is coincident with a spread of hopefulness wit h regard to further progress not only in our own trade activity but also in some other parts of the world, and these hopes have been still further quickened during the past week both by the good figures of employment and by the tenor of the Premier's speech at the Guildhall Banquet. The latest employment figures show that the number of insured persons in work (exclusive of agricultural workers) at the end of October was 11,103,000, or 21,000 more than that shown in the revised September returns, and nearly 600,000 more than in the corresponding month of last year. Moreover, the unemployment total of 1,611,810 represents a drop of 12,529 compared with the previous month and of 804,580 compared with a year ago.
• Mn. BALDWIN'S TESTIMONY.
Last week the Chancellor of the Exchequer spoke in hopeful terms of the trade outlook, and at the Guildhall Banquet on Monday night the Prime .Minister, Mr. Baldwin, said : " All the available data points to the continuance of the upward trend of trade as a whole. The confidence of the business community and the home market is unimpaired and the expansion of employment, wage increases in certain industries, and the rise in industrial profits and dividends may be expected to lead to a still greater volume of consumption. Much progress has been made in reviving the internal trade of this country and the Government's efforts have also leontinued on page. 876.)
Finance
(Continued from page 875.)
succeeded in lifting our external trade to a level markedly higher than that reached at the low point of the depression." _ _
EFFECT OF GOVERNMENT EXPENDITURE.
Amidst such impulses, it is scarcely surprising that optimism—chastened only by the darkei background of political conditions in Europe—should be felt with regard to trade prospects, and expectations of a con- tinuance of trade activity have also been heightened by the remarkable rise which has taken place in the price of commodities, a matter to which further reference is made in another column. Nor, apart from the European political clouds, is there, perhaps, any reason to challenge this optimism, at all events so far as trade prospects over the next year or two are concerned. At the same time, I think that even in connexion with the trade activity there are one or two points which should be kept in mind. The two countries in which commercial and financial activity and optimism with regard to their continuance are most pronounced are Great Britain and the United States, and in both of those countries much of the activity must be attributed to large Government expenditure. In the United States that expenditure is responsible for unprecedentedly heavy budtet deficits, and even hi this country the extra trade activity of the past twelve months must be associated, to some extent, with a rearmament programme which promises a considerable Budget deficit for the current year, with possibly a still larger deficit for the new year. To what extent these con- ditions in the two countries will yet bring about still higher taxation remains to be seen, but perhaps the more important point to remember, so far, at all events, as our own rearmament expenditure is concerned, is that it is unproductive in character and conceivably will extend over a limited period. In the United States the position is somewhat different inasmuch as in the matter of Duilding that- country is greatly in arrears, the shOrtage of houses being an outstanding feature of. the 'situation. Another feature specially prominent both in the United States and this country is the part played by the Government policy of cheap money. The fact cannot be too clearly recognised that the present trade revival, unlike revivals of the pre:War days, has been largely brought about . by artificial measures, the final effect of which has still to be revealed.
ARTHUR W. KIDDY.
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