FINANCE AND INVESTMENT
THE Treasury has lost none of its skill in the art of conceal- ment. Ten days ago Lombard Street and Throgmorton Street were buzzing with rumours of a new Defence Loan. Some of the bolder spirits even claimed to have seen the full terms, speaking in awed whispers like those who saw the Russian troop trains during the War. Nothing emerged from Whitehall. Then, just as the City had one eye on Trent Bridge and at least half-an-eye on Ascot, hey presto ! and a loan for L8o,000poo drops out of the blue. This is good technique and it is also a good loan. In offering a 3 per cent. medium-dated stock at a price of 98 the Treasury is apparently returning to the policy, abandoned last year, of appealing to the general investor rather than money market institutions. The yield to redemption of £3 2S. 8d. per cent. is not very exciting, but it is in line with current conditions in the gilt-edged market. I do not foresee any substantial setback in gilt-edged prices after this loan has been absorbed. One effect may be to curtail the offerings of Treasury Bills and so to force down the discount rate below t per cent. The other negative influences in favour of gilt-edged —the unattractiveness of speculative investment and the general tendency to conserve rather than use cash resources —seem to be just as powerful as ever. Even the whispering campaign in favour of dollar devaluation has failed to arouse any enthusiasm for commodities and equities, although it has sent mobile money flying out of dollars into bars of gold. When neither the promise of pump priming nor rumours of currency juggling will release inflationary forces, the " bulls " must indeed be in dispirited mood. It rather looks as if Wall Street will now be content with nothing less than concrete evidence of a business upturn or, failing that, the head of President Roosevelt.
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