New-York tribune., 1911-01-02
GREAT bR|TA|N'S FINANCE
A Most Prosperous Year Closes
with Better Times Coming.
LOMBARD ST. OPTIMISTIC
Millions Ready for Investment
Abroad-A Period of Cheap
Money Expected.
fBy Cable 90 Tho Tribune. ]


business and foreign trade, and there is
a prospect OF even better times for the
coronation period.
The budget controversy a year ago
created artiflcially an enormous deficit
and the bulk OF the income tax was
withheld from lack Of authority for coll
l~ctins II. This caused monetary strln-
sency and financial disorder. but event
ually the budget was passed ana col
lections were rapidly made. the dei-
icit was speedily wiped out. ana swoi-
len revenue returns now indicate sur
plus OF considerable magnitude FOR the
next financial year.
The Ct ancellor Of the EXchequer has
not only averted the collapse OF the
free trade system. but has also demon
strated that there are large resources
not heretofore tapped for obtaining
arslndant revenues for social reforms.
The Unionists can no longer assert that
tsriff reform is Indispensable for supply
ing a construction fund for a new ana
POWERFUL navy and pensions for the aged
and invalided workmen.
This enlargement of the revenue re-
serves OF the Treasury has been accom-
panied by continuous investment OF
great masses Of capital abroad. Ap-
plications for new capital during l9lo
have been nearly double what they
we're in 1906
British investments Abroad.
Not only has there been good busi-
ness IN tho United Kingdom, but there
has also been general revival of In
dustry throughout the world. Govern
ments. corporations. mining companies
and RAILWAYS have been borrowing mill
ions at high rates. and British investors.
after supplying s3oo,0o0,oOo for use at
home. have distributed S.o33WpHo
among the British possessions and Tor
eign countries.
AS much as $40. .795, 900 has been sent
70 the United States and very large
Investments have been made in Brazil,
Argentina. Canada and Australia. Not
during recent years has there been
more continuous outflow Of British
capital
Gold production in South Africa and
other fields has been larger than ever
and the bulk of the new bullion has
como to London, but it has not remained
here. II has passed through England
as through a sieve. and gone to the Con-
tinent and the Western Hemisphere for
currency requirements and industrial de-
velopments.
The rubber boom during the earlier
part of the year was one of the most
remarkable speculative movements ever
witnessed in London. Scores of new
companies were formed. and rubber
shares rose by leaps and bounds until
the horde of new investors were drawn
into the speculation.
The January dividends promise to re-
duce the bank rate and TO bring in a
brimming year of cheap money, with
conditions highly favorable for invest
ments abroad and home speculation.
Optimism for New Year.
Optimism is the prevailing mood in
Lombard Street. The solid men of the
city are undisturbed, although eX-
cited partisans are forecasting civil
war as the sequel to the creation
of five hundred "puppet peers for the
enactment of the veto bill. They know
that England is so well ordered coun-
try that the outbreak of a revolution
against King, Lords or Commons does
not come within the range Of possibili-
ties While disappointed politicians in
comfortable arm chairs in the smoking
rooms Of luxurious clubs are proclaim
INK relentless warfare with radicalism
and socialism. the experienced tinanciers
% the centre Of the worlds exchanges
are convinced that modus vivendi will
be found for the coronation year.
Dismal as were the forebodings Of po-
litical oracles last Christmas, the city
vas on the eve Of revel of stock pro-
motion and speculation which would
closely approach the Kaffir circus. The
rubber boom was based on an enormous
increase i'm the consumption Of crude ma
ierial. especially in America in conse-
quence of the phenomenal expansion OF
the motor industry and new uses Of the
New sources Of supply We're required
and East Indian planters. who had set
out rubber orchards on a large scale
were In o position TO sell their properties
TO syndicates and to make arrangements
for a largely increased production in the
course of a few years. Great fortunes
were made by well informed fnanciers,
who purchased large blocks Of shares at
low rates and sold them for ten or twenty
times what they had paid for them
Scores and even hundreds Of new com
panies were formed. and their issues OF
shares were absorbed with astonishing
rapidity Thousands OF small investors
ioined in this frantic scramble for
wealth Shares for new enterprises were
subscribed twice over before the ink Of
the prospectuses was dry Jobbers,
brokers and middlemen had the best
business which had been known for
years.
Stock promotion was naturally over
done when investors were neither critical
her farms. the conditions OF labor and
the methods Of valuing properties and Of
estimating earnings. The boom came TO
a premature end when small investors
were convinced that a flyer in rubber
WIS a leap in the dark. Scores of hastily
organized companies were left to disap-
point the hopes Of credulous spectators,