Evening star., 1931-04-05
TURN FOR BETTER SEEN
In INDUSTRY OF BRITAIN
Bottom of Business Slump Thought
Reached as Executives Look for
Great Trade Increase.


what the manufacturer believ2S he
ought to have instead of what ha &C.
taaliy wants.
Another instance Of the lack Of flexi-
bility Is the hesitation frequently founo
In the introduction Of new machinery.
Consequently the plant in many fac
tories is quite out OF date IN compari-
son with that in America. Germany or
even Japan. In some cases part of the
blame must be assigned to the rigidity
of trade union regulations originally
drafted to deal with an entirely Diff
ferent set of circumstances.
Another factor is the extreme immo-
bility of British labor, which is due
partly to the housing Shortage-still
present despite gigantic efforts made
since the wsr-and partly to the sys-
tenn OF unemployment insurance. with
regard to the latter, however, it should
be noted that IN spite Of all defects 1t
has provided an element Of stability
and has prevented large groups of work.
erS sinking to starvation level. In fact,
1t is not too much to say 1t has been
insurance against revolution as much
as against unemploment)
An authoritative examination of Brit
ish industry on the lines indicated
above was made few weeks ago Ey
Sir Arthur Salter until recently head
of Nations Space prevents even q
summary of the many proposals he put
forward with q view TO restoring elas-
ITCHY to the system He point out,
however that drifting" "muddling
through and passing the buck" will
never achieve the desired end. A ma
tional cooperative effort, in which in
dustrialists. bankers, the trade unions
and the state must all play part, Is,
ha ftalre ot1c = foI
that condition the outlook is bright.
Thinks Change Is Due.
Sir Arthur does not believe that the
world depression can last long. "The
paradox of impoverishment through
plenty" he writes, lis not and can not
be permanent. It is not human desire
that sets the limit to consumption, but
purchasing capacity or earnings. With
a world system properly functioning.
these should i'll total approximate the
worlds productive capacity. That is
in turn increasing by leaps and bounds;
and how great is our potential share
in the resulting prosperity is shown by
the standards We have maintained
without so far drawing upon capital re-
sources, in spite of the loss of the work
Of two millions. If we can only make
our system adjustable and adaptable we
may reasonably lock forward when the
present world crisis is past, to steady.
rapid and immense rise in the standard
of living and in general prosperity"
Whether there will be any great I'M
provement seems to depend largely on
the solving Of two problems-reduction
of taxation and the gold question.
The second, in the opinion of o grow
ing number of city men. is by all odds
the more important. 1t is felt that the
catastrophe collapse in prices through
out the world is largely bound up with
the fact that the machinery of the gold
standard is working erratically. To get
it functioning smoothly, international
action Is required, and the best hope
for 1881 Is that the necessary co-opera-
ton between the great central banks
will be forthcoming
In 1928 the London Stock Exchange,
like that of New York, experienced
boom conditions. But, unlike America,
Britain had enjoyed no long period of
prosperity, and, as the subsequent slump
revealed all too clearly, its bull move
ment was even less justified. One espe-
cially bad feature, peculiar to Britain.
was the building OF companies formed
to exploit new patents These were
promoted with wild promises of enor-
nous profit With investors eagerly alb
sorbing their stocks, prices were pushed
to fantastic heights.
Many Companies Bankrupt
The last year has seen total collapse
in such issues. Scarcely one of the
companies concerned has made good
and many now are bankrupt A similar
experience has been suffered by invest
ors who plunged in stocks of the many
interrelated groups" formed during the
boom. The HAIRY companies are the
most notorious example, and here fraud
has been probed and punished. Other
groups became involved in manipula-
tions of a financially unsound, If per-
fectly legal, nature and investors in
them now are paying the penalty.
These are domestic troubles. But
London also is the largest international
stock market and 1928 saw a great in
crease in this business. Many British
stocks were introduced to New York
markets and many new foreign stocks
received quotations here. A very profit
able business, but its aftermath was less
pleasant, for during the last year Lon
don has time and again been called
upon to absorb securities dumped by
the stock exchanges abroad.
In spite of these difficulties the
financial structure of London appears
well maintained. There have been only
minor failures on the Stock Exchange
and these mainly due to the HAIRY
frauds One or two small private bank
ers have gone under, but the strength
of the great deposit banks is undimin-
ished. London has been able also to
maintain its position as an interna-
tional center, particularly in the short
loan market. 1t has kept its reputa-
ton for standing by its clients, and
when, for instance, the Partisan bank
ers recalled their funds from Germany,
panic-Stricken by the election results,