Warnings to trade with caution, hints of possible disaster ahead, have not been awanting in the commercial literature emanating from Grreat Britain since the begin. ning of the year. Accordingly we frankly welcome Dr. Clapham's statement telling us to prepare for a great slump. and if we err in welcoming it—the statement, not the slump—we do so in good company. The commercial position in the world is exemplified by the case of Great Britain. That country has a certain amount of credit backed by what may be called negotiable effects—and up to the extent of that credit it may trade. Recently it sent a certain part of its negotiable effects to America in the form of gold, to repay a loan, it attempted to continue trade on the same scale as previously, and at once found itself hampered. by financial stringency. That is the first factor in the case, In the mean time America is. believed to have overtraded, and even its credit, enormous though it now is. has been badly strained. Further we have all been endeavouring to resume trade with ex-enemy countries, whose credit in relation 10 that of America and Great Britain seems a minus quantity. Now, we cannot trade, unless by pure barter, without real credit, and it is this that we have been trying to do. We believe this is a fair statement of the world's economic position, though we should have preferred Dr. Clapham's analysis. We are liable to forget that with every shell fired during the war we were blowing away the world's extra wealth, representing its trading credit. and that we have now to suffer for it. When this is realized we shall probably have no difficulty in looking for the slump.
Text read from the printed page and cleaned; old type leaves the occasional error.