FINANCIAL NOTES.
Whenever the American exchange experiences a fresh fall the effect on securities is undoubtedly accentuated by irresponsible talk of an immediate rise in the Bank Rate. This, however, is surely due to a misconception of the position. It is quite true that when the Bank Rate was last raised the weakness of the American exchange may have been among the contributing causes, but the conditions then operating were very different.. Not only was America taking advantage of the monetary ease here to finance some of her activities on money borrowed in London, but there was a thoroughly unwieldy position on the Stock Exchange. To-day, the purely speculative position on the Stock Exchange is probably small, while so far from a rise in the Bank Rate arresting any foreign withdrawals based. on nervous apprehensions - it might accentuate them. In fact, a careful consideration of the International financial position offers far more justification for a reduction in the official rate of discount in the United States than for a rise in the official minimum here. On the other side of the Atlantic gold reserves are stupendous, and commodity prices have fallen, while the undue appreciation of the dollar must tend to affect American trade adversely.
At the recent meeting held of the London and Brazilian Bank the Chairman was able to announce that formal approval had been obtained from the Treasury Com- mittee of the proposed fusion with the London and River Plate Bank. The amalgamation now, therefore, may be regarded as a fait accompli, and the interesting announcement was made at the meeting that the combined bank would bear the title of " Bank of London and South America." The total issued capital of the amalga- mated concern will be £8,540,000, while the combined Reserves will be £3,600,000. A. W. K.
Previous page
