THE EMBARGO.
In a certain section of the Press there is already a popular clamour for an immediate removal of the embargo on the grounds that foreign loans tend to stimulate our trade. Unquestionably they do, but not immediately. We seldom make our loans conditional on the proceeds being spent in this country, relying rather upon the prosperity of the borrowers ultimately leading to increased purchases of our goods. That is unquestiona: ly the right principle, but of necessity it means that the East effect of the new loans is usually to move the exchanges against us, while the benefits to our export trade do not usually follow until a considerably later period. At the present moment, therefore, there is much to be said for temporarily delaying the removal of the embargo on foreign loans until the monetary situation is a little clearer. Immediately that is so the removal of the embargo will command general approval. If as the result, however, of any premature removal of the embargo, a very high Bank Rate were necessitated to protect our gold supply, the very papers which are now clamouring for the removal of the embargo at all costs would probably be the first to accuse the monetary authorities of having proceeded on lines calculated to produce high money rates to the detriment
of trade.
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