20 
LAND y WATER 
November 14, 1918 
Looking Ahead : By Hartley Withers 
NEVER was a time in which it was more difficult 
tlian it is to-day to "see one's way," as the 
City says, in financial matters. The best judges 
of the outlook in Lombard Street frankly admit 
that the future price of money is a complete 
puzzle, and that they are pursuing a cautious policy, con- 
fining themselves to bills with a short life and keeping a 
liquid position. Advocates of caution and prudence are 
generally resented as stulYy people who refuse to look at the 
bright side of things ; nevertheless, in view of the great 
uncertainties that surround us there is every reason for 
deprecating anything like a spread of speculative canvas. 
The dear old public, of course, is showing a very-human and 
natural desire, after the strain and restraints of the past 
four years, to continue a course of financial mafficking which 
will sooner or later cost it a good deal of money. And equally 
naturally, those who minister to its needs in this direction 
are making haste to gratify its wishes. Just as in Victorian 
days the " musical'' public wanted, as Corney Grain told it, 
/ a song with 
The piano not too difficult. 
The voice part not too high. 
so in these times-, when carrying over in the r^arket is not 
possible, what the light-hearted gambler wants is a nice 
low-priced share" that can be taken up and paid for with a 
moderate outlay, can be trusted to go up like a rocket if 
enough people will come in to buy, and consequently must 
not be hampered by too much information concerning its 
past for which anything like reasonable calculations con- 
cerning its future would be possible. This "felt want" was 
to have been obligingly provided last week by the placing 
on the market, in the neighbourhood of I2s. a share, of shares 
with a nominal value of 5s. in a concern called the Aabada 
Trust, of which little was known except that it owned con- 
cessions in various parts of the earth. The Stock Exchange 
Committee intervened and prohibited dealings, presumably 
pending inquiry concerning the company's position and the 
circumstances vmder which the shares were to be introduced 
to the market.' It is very satisfactory to see the committee 
taking this step. Its responsibility for the securities in which 
its members are allowed to deal is a most difficult matter. 
Any attempt by it to make' stringent inquiries into the pros- 
pects of companies which it admitted by granting them a 
settlement, would naturally be interpreted by the public as 
A virtual guarantee of the future prospects of any securities 
so admitted. But the committee cannot be wrong in insisting 
that before a security is introduced on the market, a certain 
amount of information shall have been made public con- 
cerning its past and present, so that buyers may have some- 
thing on which to base their guesses as to its future. In the 
present temper of the speculative optimist such considera- 
tions seem sordid and contemptible. He wants to buy 
blindfold and trust to being followed by a large enough 
crowd to shove the price up after him, and give him a nice 
profit. Speculative profits are not subject to income-tax ; 
everybody is feeling cheery and happy ; there is not enough 
fuel to make a big enough bonfire ; the restrictions on the 
sale of alcohol put a most uncomfortable bar on another 
obvious way of expressing one's feelings ; so why not a run 
for one's money in Throgmorton Street ? What one man 
loses another gains ; no labour is involved except a little 
clerical quill driving, so where is the harm ? It is a very 
plausible line of argument ; but is this quite the right time 
for these amusements ? If speculation could really be con- 
fined to people who knew what they were doing, and could 
afford to lose their money, and did not risk more than would 
be inconvenient to them to part with, there would be little 
or no harm in it. But it always drags in a crowd of folk 
who think that they are investing when they are actually 
only gambling, and then, when they find that money which 
they need for a rainy day is gone, turn round and denounce 
the whole City as a gang of swindlers, whereas it is only their 
own ignorance and greed that is at the bottom of the mischief. 
And this is not the right time to encourage the growth of that 
sort of spirit, because one of the things that will be very 
much wanted for some years to come is a steady stream of 
money into investment to provide our industry with all the 
capital that will be needed. , 
Moreover, the existence of a big speculative account means 
that there is a large number of people who will be frightened 
into selling securities at the slightest hint of any adverse 
happenings or possibilities. This would not be of very- 
serious consequence, perhaps, if the sales by these "weak 
bulls" could be confined to the low-priced stuff which they 
chiefly affect. But this is not so. When they suddenly 
turn round to sell they are likely to find that their speculative . 
pets are more or less unsaleable ; and then they are too often 
forced to turn out part of their holdings of real investments, 
and so give an air of weakness to securities with real intrinsic 
merit. And so just at a time when we want to show a firm 
financial front, an impression is created that London is Bat 
as strong as it was thought to be. 
The Turning Eoint 
This is just the impression that is not wanted at a time 
so fraught with uncertainties 'and possibilities and impossi- 
bilities as the present. We are at a turning-point in the 
world's history. A terrible menace to civilisation has been 
destroyed, but everything depends on the next few steps 
that are taken by those who have won the fight. And on 
the economic side of things there is as much possibility of 
good or evil as anywhere else, if not more. The soldiers, so 
we are told, will be grievously disappointed if they do not 
come back to the better world which has been promised 
them as awaiting them at the end of the war. This seems 
to be rather a large otder, for during the war the civilian 
population has had quite enough to do to provide all the 
material needed for the fight, and could hardly be expected 
to create a new heaven and earth in the course of it. What 
we have to do now is to get to work as quickly as possible 
and to show that we mean, by a greater output of better 
distributed wealth,, to make good the ravages of war and 
build up a state of things in which the chance of a better 
life shall be open to all who are willing and able to do a good 
day's work. If we set about this task in the right way, 
sensibly, calmly, and with good will, the chances of success 
are big. We are not going to make a Utopia all in a moment. 
Because we have, under the stress of war, developed astonish- 
ing dexterity in turning out shells, it does not follow that sdl 
the peaceful wants of man can be met with ease at a time 
when raw material and transport are scarce and all kinds of 
complicated problems have to be solved in the course of 
transferring our energies from war work to peace. 
To secure this object — on which our material prosperity 
completely depends — we need on the financial side a steady 
money market and firm stock markets ready to absorb any 
securities that come on offer and ask for more. There is no 
reason why we should not enjoy these advantages if only we 
behave with calmness and common sense. Our prestige has 
been greatly increased by the war, by the clean fight we 
have fought for a clean object and the clean hands with which 
we come out of it. On the financial side our record might 
have been improved ; but it was much better than that of 
our opponents who have not met a halfpennyworth of the 
war's cost out of taxation, and it was better than that of 
any of our Allies, except Japan, who did comparatively 
little fighting, and America, who came late into the struggle, 
and with her pockets bulging with war profits earned during 
the years of her neutrality. This prestige is a matter of 
great moment. For we hold at present a very large amount 
of money left here by neutrals out of the sums due to them 
for goods sold to us during the war. They have made a 
big profit on it owing to the recent favourable movement 
in exchange — we owe them pounds, and pounds have been 
rising in value on all the neutral markets. Some people 
anticipate that there is a danger that these neutral creditors 
may inconvenience our money market by taking these funds, 
which are pajable more or less on demand, home, and so 
securing the profit that they have earned. But why should 
they ? Like every one else they will want food, raw materials, 
coal, and other goods. These things they can most easily 
pay for by drawing bills on their balances in London. Surely 
the most reafenable course for them is to keep these 
balances here until the goods come forward and the whirligig 
of trade settlements begins again, instead of taking them 
away in gold, and so losing interest on them and hoarding 
the metal when what they need is goods. . The only 
thing that would lead them to such a stupidity would be 
any indication of weakness on our part, or any possibility 
that the schemes of some of our financial futurists, who 
want to plaster the comitry with paper currency as a remedy 
for all evils, were going to be adopted by an ignorant Govern- 
ment. 
