New-York tribune., 1912-01-02
EUROPEAN FINANCE.
AND TRADE IN 1911
British Money Market Not Dis
turbed by Budget Troubles.
LOMBARD ST. OPTIMISTIC
Trade Records at End of Year
Indicate Healthy Business in
the United Kingdom.

ropdon Dec Z-The monetary conditions
-. tho close of a most bewildering year
are highly favorable for England. The
MI has enlarged its stock OF bullion, Con-
,ipental demands for gold have fallen off,
ord there are masses of fresh capital in
,eeerye for investment Money has been
cboap the greater part of the year, and
whenever there is a change. as there must
be when January dividends are paid, the
rate Of interest is likely TO fall. Specula-
,ive reyivals have not been possible when
the unexpected has constantly been hap
,ening at home and abroad. Railway Sc
c,,rities we're not wanted by investors when
q general strike had been temporarily de-
ferred but not permanently averted. Rub
ber speculation has not recovered the
ground lost by excessive activity in 1910,
and the overproduction of companies with
elastic prospectuses; and yet there has
teen an uninterrupted Increase in consump-
tiou. with a gradual shrinkage IN available
stock There have been no autumn booms
I'm diamond shares. gold stocks and Rho
desians Seldom have there been such vast
accumuations of capital awaiting invest
uent. and with favorable conditions Of for
cign exchange there is practical assurance
of prolonged period Of cheap money next
year.
While national finance has not been dis
turbed by a renewal Of complications over
the budget, the prices of consols have
ssgged from month TO month, and the alb
normal depression of national securities has
impaired the credit OF the United Kingdom
throughout the world The Vnconfrmed
rumOrs Of a large naval loan for the pur-
pose If offsetting, by two keels TO one a
new course of German activity cannot have
affected prices, and fresh issues I'm con-
nection with the national telephone pur-
chase have not been Of great volume. Con-
soils are weak because there IS constant
interference with the arrangements Of the
Sinking Fund and because. also, the Sc
curities are unpopular at time when the
cost of living is steadily rising and middle
class investors are forced TO obtain better
returns from their reserved capital. even
if they have TO take larger risks. Financiers
contend that il is almost as necessary 10
restore the prestige OF consols IN the mar
kets Of the world as It is TO have a pow
erful navy. So seriously are they impressed
with the danger of having military and
naval armaments weakened by impaired
financial credit that many OF them are anx-
ious TO have the commissioners of the na-
tonal debt empowered to look after con-
soils and TO manipulate the market Ly buy
Ing or selling them at discretion. Ohicial
jobbing seems a desperate expedient for
-mparting stability and buoyancy to ma
tional securities
While larger share of the gold produced
in South Africa and in other sources Of
supply remains in England than formerly,
and while there is considerable increase
In the. gold holdings OF the Indian currency
department, there Is a continuous outflow
Of capital TO foreign countries. The re-
serves Of the Bank Of England and of the
joint stock banks may be steadily growing
but money is invested abroad rather than
at home. Canadian and Australian enter
prises are highly favored because dividends
are improving for sound stocks, and Chill,
Brazil. the Argentine, Peru, Costa Rlca
and other South and Central American re-
publics get what they want In the London
market whenever they are applicants for
loans. Lack Of confidence in industrial
conditions in the United Kingdom promotes
credulity respecting investments abroad.
There is no distrust OF business man
agement Of sound enterprises. but there
IS general apprehension of the in
creasing burdens OF social legislation and
Of the uncertainties of trade union agita-
ton and railway strikes. The risks of in
vestment are considered more serious at
home than abroad. and the income ap-
praisers have better facilities for ascertain
ing profits and making their assessments.
Credulity in speculative adventure brings
its own punishment in disappointed hopes
In 1910 there was the rubber boom, during
which hundreds of new companies were
hastily formed and foated on a full tide Of
speculation. In 1911 the investors in wild
cat enterprises have learned at company
meetings that venders were overpaid. that
worthless estates were brought into market
and that there could be no adequate return
for the capital sunk in plantations manipu-
lated for the selfish interests of the pro-
moters. The sound companies on good sites
where there is rotation Of trees, and
where labor is cheap and trustworthy, are
prosperous, and larger profits may be ex-
pected from the increased consumption Of
rubber; but what gross impositiOns have
been practised upon ignorant investors.
who were carried away by an orgy Of spec
ulation and infatuated with the spirit of
gambling as they read the specious pros
pectuses Of tricky promoters!
British railway stocks have risen In con-
sequence Of the compromise effected In De
cember between the managers and the trade
unions. n existing conditions OF peace are
undsturbed this year these securities are
likely to 20 higher. The Board Of Trade, in
order to facilitate a settlement, has virtually
admitted the right OF managers 10 obtain
fair remuneration for capital. II wages are
raised IN conseouence Of thc action of the
commission and the Cancellation boards ad-
vances in rates Of passenger and freight
trsnhc will be allowed. Consumers will be
called upon 10 compensate the managers
for the increased cost Of maintenance. and
the consent of the Railway and Canal COM
missioners to this offset Is assured in ad-
vance. AZ the expense OF the public wages
will be increased ana dividends will not be
reduced. and labor and capital will each be
benefited through government control
Whatever may be the experience OF Amer
lea and other countries, the principle Is
recognized I'm Great Britain that combina-
tions and working agreements are allow
able even In the public interest and that
free competition may be wasteful and
runous.
The trade records for the closing months
Of the year Indicate healthy and profitable
business throughout the United Kingdom
Both imports and exports have been ex-
panding continuously. II there has been
decline in the values OF raw material 1t Is
largely 10 be explained by the lower prices
OF cotton. That fall means prosperity for
Lancashire Exports Of textile aud iron
and steel manufactures have largely in