FINANCE AND INVESTMENT
WHEN markets can take news as dismaying as the December unemployment totals and President Roosevelt's fresh broad- sides into the " Big Business " entrenchments without turning a hair, I feel that one can legitimately begin to be hopeful. True, the unemployment figures, when corrected for weather and other special circumstances, are not as tragic as they seem, and the " battle " in the United States is at present a matter of words rather than deeds, but only a strong technical condition in markets, with an improved psychology underlying it, could have withstood this two- handed attack. As things are, equity shares have rallied over a fairly wide front both in Throgmorton Street and in Wall Street. Carried along by the same recovery tide, key commodities, with copper in the lead, have also left their recent depression " lows " well behind. Can the good work go on ?
Frankly, I think the answer is : Yes, but not quite for the most satisfying reasons. I should like to see recovery based on a genuine business improvement in the U.S.A., plus a tangible hope that political tension will give way to economic appeasement in Europe. The recovery movement now under way is closely linked with the prospect of rearmament in the United States, and the inflationary influences which the armament race is believed to bring in its train. As it happens, Washington's rearmament programme, much as one deplores the events which have made it necessary, may easily provide an impetus to industrial improvement of which America is in urgent need. Trade news from America is at present very mixed, but on balance suggests that the bottom of the recession has been passed. I refuse to try to guess what President Roosevelt's next move will be, whether he will really attempt further legislation against large-scale combines and utility concerns or merely register his proselytising zeal for bringing those who dwell in darkness into the light of the New Deal. But, although I am sure he will try to regulate the pace of recovery, I now feel confident that recovery is on the way. * * * *
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