* * * * WALL STREET'S RISE
It is a sad, but, one must admit, a logical, sequence of events in which the grimmer the aspect of the European situation the greater the speculative enthusiasm on Wall Street. There is, of course, another premiss of the Wall Street boom besides continued hostilities in Europe, and that is the speedy repeal of the Neutrality Act. Frankly, the chances seem to be that both premisses will prove sound, so that, although the movement will doubtless be punctuated by setbacks as and when peace hopes are revived and war profits taxation is mooted or imposed, a further substantial rise seems likely. From a purely financial standpoint, a rise in the Wall Street market will be welcomed on this side. Already many British holders of American securities have taken the opportunity to sell at prices well above those ruling a month ago, and the dollar proceeds have, of course, been taken over at the current rate of exchange by the Bank of England.
This selling movement has, I imagine, been much heavier than the fresh speculative purchases from this side, and I should expect sales to keep ahead of buying as Wall Street goes higher. The figure of British holdings of American stocks prior to the outbreak of war can only be estimated, but it was probably not less than $2,000,000,000. Allowing for the fact that a considerable proportion was held in the form of fixed-interest securities and common stocks not especially favoured by war conditions, the rise so far probably amounts to about to per cent, or $2oo,000,000. That is a useful increase in the value of one of the most important sections of our mobilisable external assets, and, as I have indicated, it seems likely that this rise will go on.
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