Martins Bank Meeting

EFFECT OF GOLD PRODUCTION.

IN reading the speeches of our bank chairmen at the annual meetings, it might almost be supposed by those unacquainted with the facts that there was something approaching to collusion owing to the similarity of the subjects selected for comment and the views expressed concerning them. - The explanation, however, is in no way connected with collusion, but rather with the fact that the subjects selected and the . comments made arise out of a similarity of experience on the part of bankers throughout the country. And, in my judgement, it -is that fact which lends additional importance to the bankers' speeches.'. If it were a case of colhision, which it is not, the importance would disappear. When, how- ever, the comments are prompted by a common experi- ence, then undoubtedly they lend force both to the analysis - of present conditions and to the comments concerning them.

COTTON INDUSTRY RALLYING. .

I have, for example, little doubt that the tendency. apparent both in the speech of Mr. Edwin Fisher, of Barclays Bank, and that of Mr. Edward Orme, of Martins Bank, to emphasise the importance of activity in home. trade not being allowed to divert our attention from the need for more exports, will be common to the addresses by --other bankers which have yet to be delivered, for the simple reason that it is undoubtedly a cardinal point in the present situation. The importance of the matter was stressed by Mr. Orme at last Tuesday's meeting of Martins Bank shareholders, but he was, on the whole, fairly emphatic with regard to homepaile activity having by no means reached - its zenith._ Even as regards the cotton industry, with which, as bankers, Martins are in very close contact, Mr. Orme was disposed to take a hopeful view. The increasing number of mill companies now making profits or 'cancelling out losses is, he' said, eloquent, and while: recovery may be slow, it is gathering strength. " I hOpe,; ' he' added, " I may not be regarded as unduly optimistic in this respect, for I know too well the views held in some' quarters that certain of Lancashire's foreign markets 1 are permanently lost, some of our former customers having become not only self-providing, but 'actually .coMpetitive with us. It is probable, however, . that this particular competition is reaching its limit and that with expanding .home. trade and extension to our Dominions, Crown Colonies and more favourable foreign markets, the tePtitatiOn orManchester goods will once more' assert itkeV Minting. fi -ruff Measure (Continued on page 148.)

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{Continued from page 147.) of prosperity to the county where in many areas it is still sorely needed."

After referring to the fact that the steady recovery in trade over the last few years is beginning to assume thg- nature of a _boom, and therefore c.fals for caution, Mr. Orme confessed that at the moment he could not see any signs, apart from possible European political complications, of an early cessation of the country's present prosperity. Admitting the possibility of some slackening in the erection of residential property, Mi. Orme considers that the construction of commercial and industrial premises must give increasing employ- ment for some time to come, while there is the problem of the Special Areas which clamours for solution and, finally, there is the practical certainty that rearmament expenditure is likely to supply a fresh and powerful stimulant.

But while not hesitating to express these views upon the likelihood of a continuance of, and possibly an expansion in, home trade activity, Mr. Orme was careful to point out that this last stimulant, namely, rearma- ment expenditure, might be differently regarded by the taxpayer, especially remembering that such expenditure is for non-productive purposes. In fact, we must not, as Mr. Orme said, shut our eyes to the fact that much of our present prosperity is due to four main measures of expediency or necessity, namely, protective tariffs, our departure from the gold standard, the embargo upon foreign lending, and exceptionally cheap money. All these measures have helped our domestic trade, but " their effect, combined with protective_ action taken by other countries, has seriously impeded international trade."

Commenting upon the rise in commodity prices, while recognising their effect later upon costs of production, Mr. Orme emphasised the fact that the rise has greatly benefited the producers of primary products and placed them in the position of being able to purchase the goods of other countries, a point which may yet have its favourable effect upon international trade, though inci- dentally, rising costs of production and possibly dearer money have to be borne in mind.

INCREASED GOLD PRODUCTION', Not the least interesting point in Mr. Orme's speech was his statement that he based a favourable outlook for world trade largely upon the increasing production of gold, an increase the full benefit of which has up to the present been lost owing to the absorption of the metal by America and France. During the last three years there has been an influx of gold into America greater than the world's production in that period, and her ability to attract the gold has undoubtedly been increased by Europe's purchases of her securities, to say nothing of purchases of her commodities and goods. This condition, however, Mr. Orme pointed out, may not repeat itself during the next three years, in which case the world's gold production will, to some extent, be available to create credit in countries which of late have been drained of their necessary backing.

Meanwhile, the greater activity in home trade and the increased spending power of the people has expanded our imports of foodstuffs and other commodities, creating a large visible adverse trade balance, thus bringing us up once more against the prime necessity referred to by the Chairman of Barclays Bank, namely, the supreme need for the expansion of our export trade. And in that connexion there will be a good many who will agree with Mr. Orme when he declared that the crowning incident in our recovery would undoubtedly be the resumption of foreign lending, signalising, as it would, the return of confidence in foreign affairs. Moreover, while existing unsettled conditions abroad seem to make this resumption of foreign lending appear impracticable at the moment, • encouraging returns from Canada,

(Continued on page 151.)

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(Continued from page 148.) Australia, Africa and the Argentine give indications of improvement which may have far-reaching effects upon international trade, and, Mr. Orme ventured to hope, " even lead, along with the stabilisation of currencies, to the recommencement of international lending, for- merly one of Great Britain's main contributions to world progress, and the foundation of her own prosperity."

ARTHUR W. KIDDY.