THE ECONOMIC & INDUSTRIAL OUTLOOK I HAVE recently been discussing the relation- ship of banks and business with prominent business men. There does seem to be a line of demarcation in the development of both finance and industry. The policy of this country during the last few years has been the rehabili- tation of finance before definitely striving for a revival of industry, and by the passing of the Gold Standard Act of May, 1925, the United Kingdom reverted to a form of monetary organi- sation which had prevailed for over a century. Banks have flourished, while the staple industries have been passing through unprecedented diffi- culties. There are those who are of opinion that the banking organisations of this country must take a more active part in business as they do in the United States of America. A condition pre- cedent to a loan to a business man by a British bank is the deposit of some form of marketable security. Of course, the fault is not all upon the bank, for a British business man would resent an inquiry as to the purpose of the loan-in other words, he would dislike the dictates of a banker as to how he should run his business. In Ger- many it is a part of the agreement before making an advance to a partnership or company, that the bank shall have one of its officers made a partner or director, and that he is so appointed by the bank as its supervising nominee. Thus the trading or manufacturing policy of the firm is directly controlled by the bank's directorate through its nominee. In this wav it is said that the Deutsche Bank controls the industrial policy of some hundreds of German manufacturing com- panies. I believe that in the future British banks will be called upon to play a different role than thev have been doing in the past. They will be in business rather than of business. Another topic which is being much discussed in these days is the reason for America's pros- perity. Investigators and enquiries from this country are legion. Various explanations of the high production and high wages are being proffered, but the following reasons are given by one of the most recent investigations-the rapidity of turnover reducing capital requirements, the increased productive capacity of labour by time and trouble saving appliances, no limit to individual earnings under a system of wages related to output, the welfare of employees, the importance of research and experimental work, and, perhaps the most important of all, the desirability of a low profit rate with increased volume of trade, as opposed to high prices and restricted sales. Turning from the New World to the Old, Mr. Walter Leaf, the President of the Inter- national Chamber of Commerce, in his survey of Europe's economic progress, comes to the con- clusion that Everywhere, with hardly an ex- By W. Tudor Davies. ception, there are the same complaints of the difficulty of finding markets for manufactures, The capacity for production is there, and is generally much larger than in pre-war times; but the products are stagnating, because they are refused, or at least hampered, by foreign tariffs and trade barriers. Hence unemployment, stagnation of industry, and a lamentable waste of potential human energy. The whole standard of living is lowered by the artificial restrictions on human efficiency. A European Trade League would have open markets on at least the same scale as those of the United States, and would thus be able to compete in production on equal terms with that vast area of free trade inter- course. National jealousies force us here to employ in suicidal trade struggles the efforts which should be concentrated on the general advancement of human well-being." Internally or domestically the average citizen is discussing the Budget from the natural view- point as to whether he will increase or lower taxation. The Chancellor is in an unenviable position, for, as he himself has said-" On the one hand, everyone demanded new expenditure; on the other hand, everyone objected to paying for what they had ordered." However, one thing is tolerably certain--it is that industry and trade cannot bear any more taxation. There is a question of international trade which vitally concerns South Wales. The Spanish Government intend to restrict the importation of foreign coal in the interests of the local mine- owners. Representations have already been made on behalf of British coal exporters, to the Spanish Government to prevent such a policy, but the matter is not yet satisfactorily settled. There is little doubt that the limitation of imports of British coal to Spain will mean an increased freightage for the carriage of Spanish ore bv British ships. But then the Spanish exporters of ore are not the Spanish importers of coal, though the healthy condition of the Spanish Trade Re- turns is a matter for the whole nation. Spain has been quite a good market for South Wales coal, and it needs development not contraction, particularly at this time when the coal trade is very unsettled. The tonnage position, generally. is improving, and consequently there should be more regular work at the pits. In South Wales, as in other coal areas, the problem is the dis- parity between the cost of production and the selling price, which now is about three shillings and threepence per ton, without taking into account any return upon the capital invested in the coal mines. Portuguese and Palestine Railways have recently placed orders on the South Wales market. Maybe the findings of the Coal Commission will bring great changes to South Wales,