FINANCIAL NOTES.
Interest in the annual speeches of bank chairmen, to which I referred last week, has increased rather than lessened with the delivery since then of other views and opinions by various bankers, concerning which I hope to make some further comments next week. Much has been written about the controversial point raised by Mr. McKenna as to the dangers of deflation, and I doubt if the last has been heard of that much discussed question. Most of the chairmen in their addresses have made confirmatory observations with regard to the general slight indications of an improvement in trade, though all who are in any way connected with the agricultural interests have dwelt upon the serious position of that industry at the present time, and on the whole have made out a very fair case for holding that so far as big banks are concerned agriculture is not being starved for lack of banking facilities. Other and deeper causes, as was pointed out by the Chairman of Lloyds Bank, are involved in the matter, and to some of these I may refer on a subsequent occasion.
When times are depressed it is tempting, and it is even sometimes wise, to give prominence to the first signs of improvement. Nevertheless, optimism can be a little premature and overdone, and when that is so there is the inevitable reaction. I am inclined, therefore, to endorse very heartily the observations on the general trade outlook made by Sir Harry Goschen at the meeting of the National Provincial and Union Bank of England held this week. Sir Harry fully recognized certain moderate improvements which have taken place not only in -the trade position of the country but in the national finances, and in particular he commended the Government for having effected repayments of external debt during the year amounting to 49 millions, while during the same period 428 millions of maturing or short dated securities have been converted into longer dated stocks and bonds with an annual saving of interest to the country of nearly a million. That is a point which, it seems to me, should not be overlooked when we are raising the question whether deflation through debt redemption is proving injurious. Sir Harry in recog- nized the indications of a slight improvement n shipping, the iron and steel industry and in the woollen trade, while he gave figures showing that there has been a small but progressive diminution in the number of unemployed.
Nevertheless, Sir Harry Goschen took a long view, and a serious view, of the outlook for our foreign trade, basing his apprehensions first on the present state of political and economic chaos in Europe, and secondly upon the fact that many of these impoverished countries must naturally be almost parsimonious for a time in the matter of purchasing manufactured goods from abroad if they are to accomplish the necessary economies and restore their adverse exchanges. Also, it has to be remembered that for similar reasons increased competition from German, Italian and other Continental manufacturers is to be anticipated, and when in addition to these facts it is remembered that owing to physical conditions we in this country produce but a small percentage of the necessaries of life and are, therefore, dependent in an extraordinary degree upon exporting our manufactures, it needs no lengthy consideration to perceive the many difficulties ahead.
It must not be supposed, however, that there was any note of pessimism in Sir Harry Goschen's speech, and, indeed, I must confess for my own part that I believe that true inspiration is to be found by first recognizing and then facing frankly the many dangers of the situation. As in the recent War, so in the commercial struggle there seems too often to be a conspiracy of silence on the part of politicians and others who are supposed to give guidance to the people. It is perfectly clear that the future years promise a tremendous com- mercial and economic struggle between nations. It is equally clear that our own position is one which will require every ounce of effort on the part of every worker from the highest to the lowest. The co-operation between all classes which is necessary will never be attained if the real facts of the position are not understood.
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