3 MARCH 1939, Page 50


Having erred on the side of optimism a year ago, Lord Stamp seemed determined to sit on the fence at this year's meeting of the London, Midland and Scottish Railway. He did think, on balance, that there was a little more optimism in the last two or three weeks, but he could not honestly put it any higher. For the rest he was content to fall back on the unexceptional proposition that railway prospects were bound up with general economic prospects, which in turn were conditioned by international politics, and these last were " in the laps of several considerable gods " Lord Stamp's analysis of last year's catastrophic fall in goods receipts confirms the view that the sharp setback in the heavy trades from the peak levels of 1937 was the major cause of the trouble. There was evidence, however, of some diversion of traffic to the roads, and the railways suffered from reductions in rates for vulnerable traffic retained. Allowing for all the factors in this year's net revenue equation, I advise holders of L.M.S. stocks to see things through. Since I outlined the merits of the marginal pre- ferences a fortnight ago quotations have advanced by several points, but even at 53 the 4 per cent. First Preference is a good speculative investment.