THE WORLD'S FINANCIAL CENTRE.

Auckland Star, Volume LVIII, Issue 90, 18 April 1927, Page 6

THE WORLD'S FINANCIAL CENTRE.

In commenting on Mr. Churchill's Budget, the " New York Times " raises once more the question whether, under such difficult conditions, London can still claim to be regarded as the financial centre of the world. The case is put courteously enough, "without any of the self-assertiveness that sometimes disfigures American views on finance and politics; but it claimed positively that "London has had to surrender a large part of her prestige in that regard to New York." We venture to suggest that this view of the case involves some misapprehension as to the nature and the foundation of London's longcontinued financial predominance. New York is certainly richer than London in regard to the amount of ready money at the command of its bankers and financiers. But mere wealth has never accounted for the recognition of London as the virtual director of the world's financial activities. London's pre-eminence has been due to a combination of causes —the sound and careful organisation of her financial system, the cautious and conservative policy of the Bank of England, the existence of the money market —an institution to which New York provides no parallel—able to absorb an unlimited quantity of money for short periods on absolutely impregnable security, and above all the worldwide and century-old reputation for integrity and probity which British finance still enjoys. The " New York Times " has just paid Britain a graceful compliment on her business-like punctuality in meeting her liabilities; and it may be as well to remind the Americans that till they can develop a financial system as sound and stable as Britain's and win for themselves a reputation such as her banks and accepting houses have acquired, the mere preponderance of wealth in New York will do little to disturb the equilibrium of the financial world in America's favour.