Ashburton Guardian Magna est Veritas et Prævalebit. THURSDAY, APRIL 17, 1930. BANKING AND INDUSTRY.

Ashburton Guardian, Volume 50, Issue 159, 17 April 1930, Page 4

Ashburton Guardian Magna est Veritas et Prævalebit. THURSDAY, APRIL 17, 1930. BANKING AND INDUSTRY.

A distinct and important advance in the industrial history of Britain is indicated by the formation of the Bankers Industrial Development Company to provide funds for the assistance of basic industries. The new relationship between banking' and industry, of which the new movement is the outcome, was exemplified a few months ago by the appointment by the Bank of England of Professor Henry Clay, of Manchester University, to organise and direct research in connection with its extended policy of co-operation in industrial reorganisation. To understand the position, it must be remembered that, though recent years have seen a considerable migration of British industry southward, the Midlands and the North are historically, "and to a large extent even now, the main fields of industrial activity. The City of London is, of course, the financial centre, of Great Britain, of (he Empire, and of a great part of the civilised world. The relationship of financiers to industrialists was the subject of an informative book by Professor Clay, published last year, in which. the writer explained the reason for what be termed a great gulf between the London financial world and the industrial North. He pointed out that the City was never called upon to finance industry there. It was begun by provincial capitalists, carried on and expanded with its own profits. The merchant bankers of London have been chiefly concerned in financing commerce, <specially foreign commerce. The London financier is expert, in judging the credit of Balkan principalities, Argentine municipalities, South African mining propositions, or Australian irrigation schemes:. He is accustomed to finding money for all of them, lias studied them thoroughly, and walks without hesitation among their many complications. He lias not given the same attention to industrial conditions in his own country, and, consequently, is not so familiar with them. Admittedly since the war this paradoxical position has not been so pronounced as it was) prior to that great upheaval, but Professor Clay maintained that by the aloofness from industry which remained partially characteristic of the City, the latter was failing to fulfil those functions for" which it is specially adapted. Criticism of economic propositions and direction of capital into channels where if can. be most profitably employed are two things most natural to issuing houses. These things are essential for the reorganisation of depressed industries. The industrialists are not themselves trained for the work. Since, therefore, the London capital market did not do more to study the needs and possibilities of the depressed areas, it was not ; pulling itsi full weight in a time of economic difficulty. Finally, Professor Clay advanced the opinion that if the City of Loudon did not seize the opportunity, the failure of private enterprise which tire Socialist makes the basis of his case would in fact be visible, and State action, intervention in industry on an extensive scale, Mould be the consequence. As.it is, Mr J. H. Thomas stated, in reply to a question in the House of Commons, that it is not intended that the State should be involved. He said in his recent speech at Manchester that money could be found for the reorganisation and rationalisation of industries, and the formation of the company is the sequel.