KICK OF A MULE.

Taranaki Central Press, Volume IV, Issue 360, 15 February 1937, Page 5

KICK OF A MULE.

DEFENCE LOAN.

Quotations For Most Part Marked Down. Press Association—Copyright. London, February 13. The City, which for weeks gloomily expected a blow' on the chin, found that the rearmament programme rather resembles the kick of a mule, but it is still in the dark how Mr Neville Chamberlain proposes to set the financial machinery in motion.

“Stable secrets” whispered a few weeks ago to the effect that there was to be no new borrowing before the autumn are regarded as still substantially correct.

The Investors' Chronicle expects the first instalment of the defence loan will total about £69,009,000 with income tax 5s in the £1 and increases in indirect taxes. It considers the Bank of England must increase '.lie supply of bank cash to enable the banks to support gilt-edged r.ecuri-

ties. The paper says there is no reason why the defence loan should precipitate inflation if recovery continues. The immediate view of the markets is that there is nothing at present to go for; consequently quotations lor most securities, ‘excepting air maments. are mark-d down. Gill edged securities and industrials have suffered a severe setback.