THE REVIVAL OF COMMERCE AND FINANCE. T HE City article of
the Times on Monday last opened with the statement that " a steady, though slow, improvement in the state of commerce and finance has been perceptible since the beginning of the year, both here and in the United States." Believers in the cycle theory of commercial prosperity and depression have of course been convinced for the last two years and more that such a revival was due in the natural course of events ; but owing to a series of unfortunate hitches their hopes have been constantly deferred. Now, however, according to the Times, " the phenomena are unmistakable." There is no need to point out that this pronouncement, if only we can accept it as correct, is the most welcome message of glad tidings that the world, tired of stagnation and depression, could possibly receive. Very few of us are so placed that we are altogether beyond the influence of good and bad times—life would probably be but a dull business if we were—and in this industrial age, when everything that is not municipalised is joint-stocked, it is superfluous to insist on the universal importance of those questions which once affected only certain classes of the community.
As to finance, there is not the smallest doubt that as far as the preparation of new ventures for the market is con- cerned, not only a steady and slow, but a rapid and rather headlong improvement has taken place within the last half-year ; the movement began, indeed, in the last quarter of 1894, and since then the business of company promoting and all the allied industries, have been working at full blast. The speculator generally leads a revival, and in the last few years he has frequently burnt his fingers by leading where no revival followed ; on this occasion he was first in the breach with a crop of West Australian gold-mining companies, which were scattered over the City so profusely, that a financial daily, which once a week stoops to facetiousness, remarked that " it was not true that a man had been arrested for being found without a West Australian prospectus in his pocket." Then we had the Witwatersrandt mining boom, which is still with us, and has produced a certain, though hitherto rather moderate, amount of new ventures ; and the prospects and possibilities of Rhodesia have appealed strongly to our imaginations and our purses,—so strongly in fact, that the British South Africa Company has decided to seize the favourable moment and issue half a million new shares, though last January the chairman had denied. the advisability of any addition to the capital of the concern. Then again, brewery and other industrial companies have been coming to market freely, and when we add a little Colonial borrowing and some American Railroad and Municipal Bond issues, and the United States Government Four per cent. Loan, it will be seen that, at any rate in the " flotation "— sit venia verbo — department of finance, business has been decidedly brisk. It may perhaps seem surprising that with all these demands for capital, money remains as plentiful as blackberries, and six months' bills are discounted at f per cent. ; but a moment's reflection shows us that these new issues are, as a rule, less suckers than feeders of capital,—they merely supply a further bundle of securities against which we can borrow, thus increasing the amount of available credit.
This revival of financial enterprise has, however, a considerable effect on commerce. Even the promotion of companies to develop auriferous areas at the other end of the world, tells on the volume of industrial activity at home, as is proved by the satisfactory exports of mining and other machinery to South Africa and Australia, which have been shown in recent Board of Trade Returns. And if the improved regions of Rhodesia and West Australia are found to be as rich as prospectuses would have us believe, and a flourishing population springs up in these deserted wastes, here is the material for a genuine trade of a solid character. All this, however, still lies, as Homer says," on the knees of the gods," and the question with which we are immediately concerned, is this revival of commerce. Financiers, as we have seen, have been busy enough,—have producers, traders, and merchants been busy likewise ?
As the Times says, " the phenomena are unmistakable." There is a revival in trade, but it is still slow and decidedly partial. The Railway Traffic Returns certainly show no sign of a general and well-spread return of commercial activity. In the year 1894 business was as stagnant as it well could be, and yet during the half-year just concluded the receipts of the principal railway com- panies of the United Kingdom show an aggregate decrease in goods traffic of over £700,000, as compared with the first half of last year ; the long frost has some- thing to answer for without doubt, but unfortunately movements of merchandise have shown little improvement during the past three months, though passenger-receipts gave far more satisfactory figures. The Board of Trade Returns have hitherto been equally unfavourable to a belief in a general revival; but within the course of the next few days, the June return will have been made public, and we can only hope that it will tell a different and more pleasant tale. However, the next best thing to a general revival is a partial one, and that we have no need to hope for, for it is here ; and two or three swallows, though they may not make spring, show, at any rate, that spring is coming, apart from unforeseen meteorological accidents. Our best swallow is the satisfactory increase in our ex'. ports to the United. States. The measure of fiscal reform, by which the McKinley tariff was modified, has set the Yorkshire looms going busily, and reports from the centres of the woollen and worsted trades are most encouraging, and are fully borne out by the official figures. Moreover, this stimulus acts again indirectly by promising a better price of raw wool to struggling Australian squatters, and foreshadowing a return of confidence, and a revival of general trade in our sheep-breeding Colonies. Commercial activity has only to spring up in one cornet of the world, and, so closely are we knit together in these days of cablegrams and rapid transit, that it spreads as if by magic. The genuineness of the recovery in the United States is proved by increased railroad earnings, and by the general advance in wages which has been readily granted by employers. Nevertheless, it is foolish to forget the fact that the American Republic is not a very strong reed. to lean on. With a currency agita- tion in full swing—the object of which, whether its supporters are aware of it or not, is to bring the State over to a silver standard—and with so heavy a balance of indebtedness that already, in spite of the recent loan, the bugbear of gold shipments is affecting the nerves of Wall Street speculators, the materials for another panic are always in the near background. And now it is said that the Republican party is going to adopt tariff reaction as its " ticket " and appeal to an enlightened electorate in favour of a return to McKinleyism. If this is so, the movement will of course give a great artificial stimulus to our trade with the States for the time being, while goods are being hastily shipped to forestall a rise in the duties ; but it will only have a more paralysing effect later on, and it is obvious that a country in which the science of politics devotes itself chiefly to tinkering with the currency and fiscal system in the interest of certain:classes, cannot be regarded as a first-rate customer.
At present, however, the States are buying freely, and Yorkshire and Belfast are gladly supplying them with woollen fabrics and fine linens. Lancashire, also, is said to have been busier lately, finding a good market in the East, owing to the conclusion of the war. It is to be hoped that the cotton-spinners will make the most of their oppor- tunities, for Japan, with her restless energy and dirt-cheap labour, will be a formidable competitor as soon as she has set her house in order. The peace in the East has also acted favourably on the shipbuilding and iron trades, and all the industries that depend on them ; China wants a new fleet, and Japan will have to mend some big holes in hers ; and our own Government's naval programme helps to keep the ball fast rolling. There is, then, a certain revival of commercial activity, which is at present patchy and con- fined to a few industries, but will spread rapidly to all departments of trade, if only the general course of events, and especially the ever-meddling political bosses of the United States, will allow it to develop unchecked. The public temper is thoroughly attuned to a belief in a return of prosperity ; and with good spirits and a sound Govern- ment, with a " mandate " based on common-sense, to help us, we are already more than halfway thither.
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