The New York herald., 1921-02-14
HIGH DISCOUNT RATE
STILL RULES BRITAIN
Bank Of England Holds Fast at
Per Cent. Reflecting Tn
settled Outlook.
WAGES KEEP TOP LEVEL
No Extensive Expenditure by
Government Expected to Aid
Unemployment Ills.
Special Cable TO THE NEW YORK HERALD.

Special Cable 10 THE NEW YORK HERALD.
Copyright, 1921, ~ THE New York HERALD
New York Herald Bureau,
London. Feb. 13. (
Amid conflicting influences severa
important events in the course of Brit
ish business and finance made the out.
look uncertain last week. The uncer.
tainty is best typihed by the failure OF
the Bank of England TO change the dis
count rate of Z per cent. which thus
remains unprecedentedly high, and Is
proving a heavy check II not serious
burden on all financing. The uncer-
tainty was reflected in the stock mar
kst. where considerable fuctuation
throughout the week finally showed little
net result.
Business generally feels that condi-
tions have by no means gone as far
toward deflation and readjustment as
is the case in the United States.
There has been hardly a single move
toward wage reduction here. \ bettar
organized labor union movement appar-
entity prefers to face the Distressing
problems of widespread unemployment.
seeking meanwhile the paternalistic aid
any reduction in the wartime and post
war wage scales. for which they fought
so hard.
Slow TO Reduce Prices.
While the week has seen some ex-
tension In the price cutting movement, it
has hardly yet got outside the field of
shoes, clothing, &C.. where near strike
of buyers left huge stocks on hands.
The prices Of foods and other essentials
yet show little sign Of yielding. except
in the case of bread where some bakers
are striving manfully to get back to the
price of a shilling for a quartern loaf
There is still prospect OF a rise in the
price of coal, however, and until the
retail prices OF essentials settle down
either to the present scale or tend to-
ward reduction as in the United States,
there is little chance of effective cuts
in wages or general readjustment time
following the post-armlstice boom scale.
The Governments plans for meeting
the unemployment problem during the
coming session of Parliament also may
have a powerful influence in this direc-
tion.
While it is considered likely that some
new steps in state relief measures may
be announced by the King in his speech
before Parliament Tuesday. the general
opinion is that the Government. which
must face n national demand for
economy. won't commit itself to an ex-
penditure prodigious enough adequately
TO meet the Unemployment distress. Mr..
Chamberlain's announcement OF the
withdrawal OF excess profit duties had
been looked upon to stimulate both gen.
eral security and business, but when the
bank rate failed to respond the an
nouncement had little net effect.
No change is expected In the bank
rate this week, but this change may
take place Thursday, February "a, when
the financial district expects that 1t may
drop to s per cent. and subsequently TO
the normal per cent. Pending that.
manifestations of reviving activity are
confined almost exclusively to the spe-
cialty fields stimulated by spring buy
ing.
This effect is most marked in Lanca-
shire textiles and similar lines. The
iron and steel trade also is helpful. as
was indicated by recent cut in prices
in expectation of the coming world de-
mand for British products along this
line.
L. s. Fluctuations CounterbaIance.
A further decline in the value Of the
dollar during the week was counterbal-
concerned by the Improvement IN Wall
Street prices. Transatlantic influences
also figured largely In both oils and rub
bers.
The Dunlop annual meeting proved a
sensation in the rubber market. The
directors succeeded in avoiding what
threatened TO be a nasty situation be-
fore the shareholders when they showed
that recent difficulties were due largely
10 the demands Of an American sub
sidiary for funds with which to COM
plete the development and erection of
q new plant The shareholders finally
were convinced that the American COM
pany is over it's difficulties and is about
TO become a substantial contributor To
the profits OF the parent concern. The
ground was made fertile for the &C
ceptance OF this explanation by the ac-
tion of American hanks aiding the
Goodyear company and by the grow
ing belief that the huge stocks Dun
lops have accumulated In the raw can
be amply cared for by debenture finan-
cling and ultimately can be proftably
disposed Of
The Anglo-Texas Oil Company also
made an encouraging report to tho
parent concern. the British Motor Spirit
Company. TO which the president OF the
Anglo-Texas Arm reported a 100000
profit In production activities alone, the
inauguration OF It's own refinery and
development and new operations In the
famous Deaner pool field.
British railroads were thrown into
something like chaos by the report that
Lord Colwyn's special governmental
committee was recommending that the
Government repudiate the agreement TO
pay the roads deferred maintenance and
repair replacement claims upon the post
war cost basis.
The return OF the railroads to private
ownership is coming in August. While
Lord Colwyns recommendations that
the Government pay only the pre-war
value Of replacements and repairs is
recognized as a preliminary skirmish.
railroad share holders realize also that
What they consider their Just recon-
pence may be swept away in the storm
feconouy demands that will be made
upon Parliament.