FINANCE-PUBLIC & PRIVATE,
[By °Lin CITY EDITOR.]
THE PREMIERSHIP AND MARKETS.
[To the Editor of the SPECTATOR.] SIR,—To the many influences restraining business in public securities has had to be added during the past week the domestic political crisis. Immediately pre- ceding the Whitsun holidays a good tone was imparted to markets by the announcement of the result of the Indian loan for £20,000,000, about one-half of which was taken up by the public, while, although the balance went temporarily to underwriters, an active demand for the scrip was in evidence. No doubt dealings on Tuesday would in any case have been restricted by the slow return of members after Whitsuntide, but the idleness was emphasized by the startling announcement that Mr. Bonar Law's health necessitated his resigning the Premiership. That the City thoroughly approves, as I shall show in a subsequent paragraph, the selection of Mr. Baldwin for the Premiership does not alter the fact that nowhere more than in business circles is there a clearer recognition of the loss which has been suffered by the enforced resignation of Mr. Bonar Law. These are times when a well-known and forceful personality is a tremendous factor in political leadership, for the problems both international and domestic are of more than ordinary magnitude. The City approves of the selection of Mr. Baldwin for two reasons. In the first place, it is felt that both he and Lord Curzon will be in the positions in which at the present juncture they will be able to render the greatest service to the community. By reason of his long experience in foreign affairs and his great abilities Lord Curzon could certainly not be spared from the Foreign Office in these times of crises. On the other hand, and if only by reason of the fact that the Opposition happens to be a Labour Opposition, the argument in favour of the Premier being in the Commons rather than in the Lords is a strong one. Moreover, while duly appreciative of Mr. Baldwin's excellent records at the Board of Trade and later in the matter of the Debt negotiations with America, and in the production of a sound Budget last month, the City especially values certain personal attributes of the new Premier which were also conspicuously displayed by Mr. Bonar Law. The new Prime Minister is essentially a man of business, but, above all, the City believes him to be completely sincere and one to whom simple, straightforward pro- cedure comes more natural than what is sometimes described as " political tactics " but which, unfortunately, ofttimes bears a very close resemblance to political trickery. No better discrimination between what may be termed a sincere and honest Labour Party and any party savouring of the Socialist or Communist character could have been made than that which was contained in a recent speech of Mr. Baldwin's in the House of Commons. Dealing with a violent speech which had just been made by Mr. Newbold Mr. Baldwin concluded his own observations with the following words :- "When the Labour Party sit on these benches we shall all wish them well in their efforts to govern the country, but I am quite certain whether they succeed or fail, there will never be a Communist Government, and for this reason : that to our people no gospel founded on hate will ever seize their hearts. (Loud cheers.) It is no good trying to cure the world by spreading out oceans of bloodshed and by repeating a pentasyllabic French derivative—the proletariat. (Laughter.) The English lan ge is the richest in the world in monosyllables, and words of one syllable contain salva- tion for this country and the world. They are ; Faith, hope, love. and work.' No Government without faith in the people, hope in the future, love of Its fellow-men, and without the will to work and work and work will ever bring this country or Europe and the world through into better times and better days. (Loud cheers.) " This speech, made when Mr. Baldwin was Chancellor of the Exchequer, attracted much attention in the City at the time, and it is recalled at the moment that the speaker has been made Prime Minister.
The fact remains, however, that while the City is pleased with Mr. Baldwin's appointment, it also recog- nizes the many difficulties with which he will be con- fronted, and it is scarcely surprising that the more cautious tone which has been apparent in the Stock Markets for the past three weeks should be emphasized by these new developments in the situation. The pros and cons as regards the chances of an immediate resumption of Stock Exchange activity can be expressed almost in a sentence. Monetary conditions for the moment favour renewed activity, while the chances in that direction are also increased by the signs of a check having been imparted even to the very small trade revival which had taken place. On the other hand, it is impossible to tell for the moment whether political developments at home and abroad will be of a character sufficiently disturbing and unsettled to restrain trade and drive available resources into investment securities, or whether confidence at home and abroad will occasion a fresh stirring of trade activity in the Money Market and check the activity in securities.—I am, Sir, yours
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