London, Jan. 26.
Presiding to-day at the annual meeting of the Midland Bank, the Rt. Hon. Reginald McKenna, the Chairman, said he saw no ground for pessimism in the future.
"We must not, it is true," he said, "under-rate the importance of American developments and their effect upon other parts of the world. If the recent shrinkage in American business should, for any reason, persist, then it seems likely that the slow but substantial growth of world trade, which has been gathering strength until the middle of last year, may definitely be arrested.
"With the decline in total trade, it becomes all the more important that we should neglect no opportunity of expanding exports. The special rearmament demand is temporary only; maintenance of export trade is a permanent necessity."
The Chairman considered it wrong "to deduce from the recent commodity and stock exchange movements that we are on a lasting downward curve. A clearing out of the speculative position, in the long run, is not bad for trade."
"There are signs already," he added, "that the depressing effect here of the American closing down of purchases of capital goods is a spent force, and that underlying factors, making for wider industrial activity, are again coming into play.
"The demand for short-term industrial and trade advances has shown an appreciable revival during last year, and the Midland Bank figures have shown evidence of this most clearly, in engineering trades, clothing industries, retail trade, entertainments and public services.
"Furthermore, the long expected slackening of building activity has not yet become serious."
Mr. McKenna also stressed the improvement in the quality of the Bank's advances.
Text read from the printed page and cleaned; old type leaves the occasional error.