By Our City Editor.
The international situation, particularly the Danzig position, produced a feeling of gloom on the market on Monday, while an even more actively depressing factor was the hesitation and uncertainty that was becoming manifest in the Russian negotiations.
the money men can be almost incredibly at sea. No myth dies harder than that of the inspired prescience of finance. The market's weakness affected both industrials, and gilt-edged British funds gave way on moderate realisations, and with them other investment stocks lost ground. In the industrial market the coming into farce of fare increases failed to influence Home Rails, and even London Transport " C " stock showed weakness.
CONTINUED EXPANSION Despite these symptoms there can be no doubt about the fact of continued industrial expansion, Attention has already been drawn to the increasing productive capacity of Steel, and the May production has now been recorded as 1,218,1000 tons, This exceeds by nearly 40,000 tons the previous highest figure which was attained in November, 1937. We are still some way from the maximum output figure of 14,000,000 tons, but the gap is narrowing.
Meanwhile the Steel people are rightly anxious to prevent a speculative debauch in the laying down of new plant. As a rule the present writer has shown no sympathy for rings or cartelisation. But the alternation of inertia with frantic competition in the production of capital goods is the gravest. weakness of the capitalist economy-and where Steel is concerned such goods are very costly. If rings and cartelisation arc a means of avoiding this, then that much must be reckoned in their favour.
AGRICULTURAL DEVELOPMENT BILL
Increased Steel production, it is said, generally means increased beer produc
tion. Brewers, however, will probably find their costs affected by the Agricultural Development Bill, published on Tuesday of last week.
The Bill empowers the Government to provide schemes for ensuring an adequate market and a reasonable financial return to growers of barley. There are, of course, various methods by which the barley grower might be assisted. One is by means of minimum prices, the other by means of a "levy subsidy," i.e., the equivalent of a processing tax on brewers, and surprisingly enough the brewers do not appear to be resisting the suggestion.
The industrial upswing is further attested by the drop in unemployment figures by 152,112. This has exceeded the most sanguine expectations. At 1,500,000 unemployment is now within 200,000 of the "low " of September, 1937, and within 400,000 of the postwar " low " of 1,100,000.
The rate of fall may indeed be termed spectacular when it is realised that decrease since January now amounts to half a million.
On the positive aide the increase of insured persons in employment to 12,667,000 brings the employment total to an " all time high." The decline in unemployment last month was, it is true, partly seasonal. Last year, however, instead of a decrease there was an increase about this time, and the present decrease is, needless to say, considerably greater than any recorded for the corresponding period of the year.
Despite this very satisfactory position from the wage-earners' point of view, and despite the fact that " full employment " (at whatever figure that phenomenon may be held to exist) may be upon us earlier than we think, the depression In certain industries may well continue,
If the wage-earner elects not to buy furniture. furnishing businesses will continue to be in a bad way. Their employees will drift of into other industries and will not necessarily be any worse off, but those who have sunk money in such enterprises and erected plant may well find their money lost and their plant redundant. " Full employment" does not by any means imply that Carey Street will put up the shutters.
IMMIGRANT LABOUR
To return, however, to the question of " full employment," there is a complicating factor here on which the Press preserves what is almost a conspiracy of silence.
It is the effect upon the labour market, of Irish immigrant labour, There is at present no sort of check on this, and if labour shortages arise there is less likelihood than ever of such a check being imposed. It would be interesting to know how much of the total British labour force may today reasonably be designated as "Irish "; the percentage in certain