FINANCIAL NOTES
Since the War Loan conversion and the subsequent fall in money rates the London discount houses have found it im- possible to earn a living at their traditional business of borrowing money from the banks and discounting bills. In 1938, as Mr. Colin Frederick Campbell pointed out at Wed- nesday's meeting of Alexander's Discount Company, things moved a little more in favour of the discount houses. The average rate which the Government had to allow on its Treasury Bills was 12s. 21-cl. per cent., against Its. 2d. per cent. in 1937, while the discount houses were able to con- tinue to borrow from the banks at los. per cent. But even so, the margin was wholly inadequate. Thus the company's main business continued to be the holding of large blocks of short-dated Government securities financed with money lent by the banks and others. The most important of these is 41 per cent. Conversion Loan, which can be repaid in July, 1940, and has thus been treated in the balance-sheet this year as a " short-dated bond " whereas it was formerly classed as a " security."
Mr. Campbell refused to predict the course of money rates, but pointed out that the bulk of the foreign and fugitive money which has been in London for some time has now been withdrawn. He also reported that there is some increase in the volume of commercial bills on offer, an improvement which he hopes will develop further.
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