FINANCE AND INVESTMENT
RECESSION ? Yes, but major or minor ? This is the question to which the City is now searching for the answer. The April figures of steel production and oversea trade and the current trend of railway traffics leave no room for doubt that the forces of recession have widened their front and penetrated further in the field of home industry. Indeed, they appear at the moment to have acquired something of the gradual inevitability of a Bradman century. One cannot be genuinely surprised, in the circumstances, that investment support for home industrials has virtually dried up and that stock markets and commodity markets generally have drifted towards lower levels. The truth is that more and more investors are beginning to realise that unless the forces of recession are checked soon they will have gathered a formid- able momentum.
Unfortunately, the power to reverse the current business trend is not wholly, or even mainly, in our own hands. Ignoring the obvious handicap on confidence imposed by international political uncertainties, the authorities here could scarcely prevent the recession from getting deeper if American business and commodity prices fail to rise above their present level. Without an American recovery I could imagine what most people would regard as a major recession next year even in face of our accelerated rearmament programme. But I still refuse to believe that America will remain depressed indefinitely. There is so much necessary capital construction work to be done and such mighty capacity with which to do it. I realise that this was as true a year ago as it is today and that American business has, in the interval, gone from bad to worse. There comes a time, however, when economic necessities over-ride reform programmes and I do not think it is very far off.
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