Britain’s Finance Stronger than Ever with Bright Trade Prospects

Northern Advocate, 28 January 1939, Page 9

Britain’s Finance Stronger than Ever with Bright Trade Prospects

(Received 10.0 a.m.) . . LONDON, January 26 SPEAKING AT THE ANNUAL MEETING OF THE MIDLAND BANK, OF WHICH HE IS CHAIRMAN, MR REftINAL McKENNA SAID THE BRITISH MONETARY SYSTEM AND PRACTICE WERE FITTED TO COPE WITH GREAT DEMANDS IMPOSED BY NATIONAL NECESSITIES. BRITAIN WAS FAR STRONGER THAN EVER BEFORE TO FACE ANY POSSIBILITIES OR FINANCIAL DISTURBANCE THAT MIGHT ARISE FROM DEVELOPMENTS ABROAD.

‘•The business outlook Is still overshadowed by international anxieties, but, just as we have experienced sudden turns for the worse in foreign affairs, so we may yet experience an equally sudden change for the better,” the speaker continued. , .

“If this should happily take place, there will be little doubt as to the probability of a marked recovery of business during the coming year, Even as things are, I think we may reasonably look for some modest improvement.

“In external trade, the Anglo-Amer-ican agreement and the arrangements associated with it mark a big step forward in the direction of a larger volume of free interchange of goods over a greater part of the world.

Full Benefit to Come. “In domestic trade, we are probably far from having felt the full effect of the rearmament programme in stimulating output and employment.” Discussing the financing of the rearmament programme, Mr McKenna said the choice lay between additional taxation and borrowing, or something of Additional expenditure by the Government ought, if possible, to be so financed as to bring into productive activity men and women now out of employment. Borrow For Employment. Taxation would not help in this respect. Borrowing, on the other hand, under the existing conditions-, would stimulate employment, and, as the demand for labour grew, industrialists would be forced ultimately to draw from the pool of the unemployed. The limit of this policy would obviously be reached when the labour employable at a profit at the current rates of wages was fully engaged, but he considered they were a long way from that condition at present.

“If it should become clear that rearmament is causing true inflation, as indicated by over-employment and an all-round rise in costs, it will, I think, be probable that restrictive measures will have *to become a matter oij, urgency, but I see no sign of a near approach to that condition,” Mr Mc--Kenna concluded.