3 JANUARY 1931, Page 34


It is along this line of reasoning that we can, perhaps, best get an inkling of the likely course of money rates (hiring the present year. Here I think the principal keys to the position arc to be found in the United States and France. In both of those countries we have the Central Banks overstocked with gold and monetary conditions quite comfortable. In the United States, however, we have a country where investors are still suffering from the shock given to confidence by the collapse in the Wall Street boom, and, as a consequence, are disinclined to embark liquid resources in long-dated foreign investments. In France also we have a condition of affairs where for different reasons investors seem equally timid in placing their- savings in foreign loans. It is possible that in France .more than anywhere else there is a subconscious timidity with regard to the maintenance of international peace, and although French stockings are reported to be getting very full, there are few signs of readiness to invest in long-dated loans either at home or abroad, so that both in the United States and in France, where gold supplies are so large that the two countries together arc reckoned to hold more than one-half of the world's entire supplies of monetary gold, the problem is almost a psychological one, investors being disinclined to invest their resources outside their own country.