Will Trade Prosperity. Continue ?
Finance
ON this important matter two leading bankers at the annual meetings of their shareholders this week have expressed their opinion, and it is one of definite value, based upon a close contact with trade activity throughout the country. The Chairman of Barclays Bank, Mr. Edwin Fisher, represents an institution whose activities extend over a large part of the- country, including important agricultural areas, while the Chairman of Martins Bank, Mr. Edward B. Orme, represents an institution whose activities, like those of Barclays, are scattered over a wide area but which are very specially in contact with business activities in Liverpool and Manchester. Both institutions; of course, occupy a prominent position in the London Money Market, but it is, indicative of the supreme interest which attaches to our commercial acti- vities that both of these bankerk may be said to have concentrated attention upon conditions of trade and the prospects of a continuance of the present revival.
BARCLAYS' CHAIRMAN.
From the general Character of the address of Mr. Fisher to the shareholders of Barclays Bank it is clear that that institution has found in Mr. Fisher a worthy successor to the late Mr. F. C. Goodenough and to Mr. William Favill Tuke, who a few months ago resigned from the chairmanship which, on the occasion of Mr. F. C. Goodenough's death, he only consented to accept fOir a brief period.. I have referred on a previous occasion to the satisfactory character of the Reports both of Barclays and Martins Bank, and I shall, therefore, now only touch upon some of the views expressed by Mr. Fisher and Mr. Orme with regard to trade conditions and prospects. LOANS- •F041, A ROUSE PURCHASE.
Both bankers were in agreement with regard to the improvement which had taken place in the trade of the "fonntry during the past year, an improvement reflected, to some extent, in the growth of advances, and not the least.interesting :feature of the address of the chairman of Barelays Bank was his analysis of the nature of the advances during the year. Advances to industry naturally increased, especially in the case of loans to builders and public works contractors and also to financial companies, including Insurance and Trust companies, while an increase in advances to merchants.' and wholesalers in raw materials and unmanufactured foodstuffs doubtless reflects the growth in imports and the rise in the prices of those commodities.
It is, however, interesting to note that the largest single item in the analysis of the advances by Barclays .Bank comprises loans granted to profesSional` and private individuals, the total of such advances standing at the end of the year at over R58,090,009. And of this large total, no less than £17,433,6)3 was represented by borrowers for the purpose -of land purchase or for th^ purchase of houses. No less than £11,500,000 was represented by.loans to private, independent and retired business and professional people, which would seem to suggest a certain amount of strain on the resources of such personi, a strain no doubt attributable, in part, to high taxation and the high cost of living.
MORE EXPORTS NEEDED.
Another important point made by Mr. Fisher .was the danger lest activity in doinestie trade, however desirable, should lessen the efforts to seeure an- expansion in OUT exports. And there is no doubt that the necessity for this effort to increase the volume of our exports is Confirmed by something else to which Mr, Fisher referred, namely, the extent to which domestic trade .activities have been stimulated by such means as abnormally cheap money and, latterly, by -the commencement of heavy expenditure by the Government on the rearmament programme. These are influences-whieli cannot he expected to continue indefinitely and, therefore, while commending the wise action of the Government some years ago in placing the National Finances on a sound basis, thus restoring that confidence which was so necessary as a preliminary for any revival in trade, Mr. Fisher very wisely drew attention to some of the influences responsible .for restraining freedom in international trade. Among them, of 'course, must be included the fact-that the chief creditor country, the United - States,. is still slow to acknowledge and shoulder the responsibiTT attaching to a creditor country, namely, that of being prepared to take from its debtors payment in goods and sdrvices. The 'retention of ab- normally high tariffs in the United States must be regarded as one of the .factors responsible for the colossal absorption of gold by the United States, thus tending to aggravate the world's - economic problems resulting from the lack of anything approaching the pre-War equilibrium of international trade balances. •
ECONOMIC NATIONALISM.
Needless -to say, however, -the 'spirit of economic nationalism is by no means confined to the United States but extends to many countries, and, combined with political apprehensions in Europe, . is doing much to restrain 'the resumption, of free international trading. But while he fully recognised these great obstacles which have still to be overcome, it is not surprising that 'the Chairman of Barclays -Bank discerned in certain of the developments during -the past year in international currencies some hopeful signs. Referring to the currency adjustments which were involved in the devaluation of the currencies of France and the.other gold bloc countries, Mr. Fisher emphasised the extent to which the situation had been aided by the cleehtiations of monetary. policy Made. by theGovertu,nents of France, this country and - .the United .States. -,The enunciation of this common desire, said Mr. -Fisher,- "-marked- a--definite -step forward
{Continued on page 147)-
Finance
(Continued from page 144.) in international co-operation and a further notable feature of the declarations by the three GovernmentS was the' importance attached to the development of international trade and the progressive relaxation of the system of quotas and exchange controls with a view to their ultimate abolition."
And once again, at the conclusion of his address, Mr. Fisher. expressed the hope that the prosperity now existing in most sections of the home market will not result in the development of such business to the neglect of oversea connexions. Such a policy, he pointed out, would be short-sighted and unsound in view of the possibility of conditions arising when domestic business may prove less attractive than at present, while, on the other hand, foreign connexions, once lost, arc not easily recovered. Moreover, in common with other bankers and observers of the world situation, Mr. Fisher evidently sees in a growth in world prosperity and a decrease in world unemployment one of the surest means for securing
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