FINANCE AND INVESTMENT
By CUSTOS
WE may -still be a long way from glad; confident morning in Throgmorton Street, but it can truthfully be said that the clouds are a little higher. True, there is a war raging in the Far East, and France has been in the throes of one of her recurrent crises de confiance, but security and commodity prices have shown a significant firmness. Indeed, there is a responsiveness to good news which holds out the hope to investors that a stake in the market may not necessarily be a stick in the mud. Wall Street's rally has provided the motive-force for the improve- ment in London and, although I feel that Washington is going to keep a tight rein on the American common stock market, at least until the Congress elections come into closer view, I am also impressed by the latest signs of a rapprochement between the President and Big Business. However determined Mr. Roosevelt may be to prevent the four-inch tail from wagging the ninety-six inch dog, an objective which is good finance as well as good politics, he also seems anxious to arrest the reces- sion and keep the " under-privileged " in their jobs.
The President himself will doubtless emit occasional political barks, and Mt. Morgenthau will play his recently- adopted role of strait-laced banker, but neither will interfere with the really important task of getting American business out of the rough and back on to the fairway again. Between the sowing of these seeds and the harvesting of business improvement there is bound to be a longish lag, and I should not like to date a recovery in the United States before the late spring. Meantime, speculative investors should continue to tread warily and confine their purchases to good shares on bad days. In the London markets Associated Portland Cement, English Electric, British Oxygen, Anglo-Java Rubber, Lancashire Cotton Corporation, Selection Trust and Union-Castle are a representative group of equities which are under-valued on the theory that world trade may be slowly on the mend.
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