Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, APRIL 13, 1931. THE SILVER LINING

Poverty Bay Herald, Volume LV, Issue 17441, 13 April 1931, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, MONDAY, APRIL 13, 1931. THE SILVER LINING

6r the many factors governing the economic situation there is none greater than the psychological one. Renewal of prosperity is largely dependent. upon restoration of confidence in all the countries of the world, ai.d there are a good many signs and portents to indicate that the spirit of optimism is gradually dispelling the gloom of pessimism which has oxerhung the markets of the world, ami that “old man Prosperity” is not so very far around the corner. The first and most potent of these .indications is given in tlie barometer of the Stock Exchange. According to advices received by the last mail, dating to March 0, a new spirit of optimism is dominating the financial quarters of London in spite of a heavy budget deficit and the knowledge that the Chancellor of the Exchequer will have to increase taxation to meet an' additional expenditure of £20,000.000 for the coining year. ‘‘For the last lew weeks,” one report states, “there have been uninterrupted improvements in markets and the Stock. Exchange. Government securities have risen substantially in value —a sign of increased confidence at home and abroad in Britain’s financial position. All important industrial securities have also risen in value. The drain of gold to France seems to have stopped and commodity prices are beginning to move higher. It is regarded as particularly encouraging that more money is coming to London for investment from abroad. Financiers believe that the worst is now over and that there will be a steady improvement for a long time to come.” In the United States, also, there are indications that corrective forces are now operating to swing the pendulum back to normal. The difficult time through which business has passed in the last 12 months has introduced a note of caution into financial operations, and one of the effects has been that enormous sums of money have accumulated in what are known as “frozen” credits. Banks are now turning in various directions to find employment for their surplus deposits, credits are being enlaVgpd, and with a truer circulation of money industry is reviving and unemployment becoming loss. “The consensus of opinion,” writes one financial authority, “seems to be that the nadir of the decline is past, and that slow but steady improvement may bo anticipated in the months which lie ahead.” Both in Britain and the United States financial experts have declared frequently that no sub slant in 1 recovery could be expected until commodity prices reached bottom and started to climb to more profitable levels. Several times hopes that this had been achieved have been disappointed, but at last there are real signs that the long slide downward has been checked and that an upward movement is within sight. This deduction may be confidently drawn from the Board of Trade figures published last week. The national balance sheet issued in March showed the tidy sum of £30,000,(100 on the right side of the ledger. Whilst the visible balance of trade was against Britain to the extent of £302,000,000, the in visable balance such as foreign investments, dividends, and shipping services, which constitute the main source of the nation’s financial strength! amounted to £431,000,000 in its favor. The national profit, accord ingly was the £39,000,000 already quoted. It was not the best year of the country’s commercial history, but neither was it the worst. In 1020, the year of the general strike, a deficit of £7.000,000 was reported. The figures, in face of world-wide depression, unemployment, and the burden ol war taxes represent quite a substantial achievement arid give confidence for the future. Already 1031 has begun to show the silver lining. “The business outlook,” reports a London correspondent, “has veered from hitherto tinallovel gloom, which now lias been replaced by qualified optimism and the expectation of bettor times. The British Industries Fair has supplied the needed fillip, ns orders indicate exports of British manufactured goods and machinery in 1031 will show a distinct improvement over those of 1030. Unemployment has again shown a slight decrease. But it is the ebbing tide of pessimism which is the biggest factor in the situation. Steel manufacturers have issued an optimistic statement that they have never been so busy. One firm is miilding 17 bridges in all parts of the world, Involving an outlay of £10.000,000. Sheffield, which has long suffered severely, is at last showing signs of improvement, due to the re-equipment of several plants, whieli has 'enabled it to successfully compete with foreign firms. A better tone has never prevailed in the electrical industry. The general improvement is largely due to British manufacturers having abandoned conservatism in business and changed their methods of product ion so as to regain their footing in the markets of the world. Criticism of out-of-date methods by leading men, from the Prince of Wales downwards, luis begun to have effect. Then* are external factors governing trade. The international situation has improved of Into, dissipating fears of another war. The Indian settlement gives hopes of u revival of Lancashire's trade. Any extension of business is certain, to improve the value of silver and this in turn will react on China’s buying power and enable Britain’s languishing trade in the Fur East to

revive; Altogether the financial and industrial skies are brighter than they have been for many months past.