in November, which was followed by the offering of many new loans. The Metropolitan clearing, which affords a good index of the state of retail trade, showed the highest percentage increase of any of the clearings for the year—namely, 5.2 per cent. General trade conditions are reflected in the country cheque clearings, which, it should be noted, showed a large increase in the first quarter of 1925, a slower rate of increase in the next two quarters, and a trifling decrease in the final quarter. As 93.2 per cent. of the increase in the country clearings in 1924 occurred in the second half of that year, it will be seen that this increase was more than maintained in the corresponding period of 1925. The figures for the past three years demonstrate the gradual improvement of trading conditions:

The totals for the ten provincial clearings were as follows:

In the next table is shown the currency note position at the close of the three years 1923, 1924, and 1925 :

In consequence of the transfer of gold from the currency notes reserve to the Bank of England, there was a large increase, nominally, in the note circulation of the Bank of England, as the next table shows:

Owing to the return to the gold standard money rates ruled higher and changes were more frequent. There were four changes in Bank rate, whereas in 1924 the official discount rate remained at 4 per cent. throughout the year. For 1925 the average Bank rate was 4l. 11s. 6d. per cent. There was a further expansion in the demand for credit, but it was not so marked as in 1924. The increase in bankers' advances was attributable, in part, to the greater activity on the Stock Exchange. Trade demands were uneven, some industries being active and others less active, while a few were distinctly depressed. The average rates for money for the past seven years is shown in the subjoined table :

DISCOUNT RATE (3 MONTHS' BILLS) AVERAGE

3 18 10 6 8 0 5 4 3 2 12 9 2 14 2 3 10 9 4 2 3

BANKS' DEPOSIT RATE AVERAGE.

3 3 10 4 14 3 4 2 4 1 13 10 | 1 9 9 8 0 0 2 11 6

3 9 7

5 37

SHORT LOAN RATE AVERAGE.
4 12 8 2 5 11 1 18 4

2 12 6

3 11 3

In the next table are shown the changes in banking figures of the ten London clearing banks, as revealed in the average monthly statements (in millions of pounds) :

Thanks to the higher level of money rates generally, to a wider margin of profit, especially in the case of loans to the discount market, the charge for short loans being put 1 per cent. instead of 1 per cent. below the Bank rate, the banks had a very prosperous year, profits being substantially higher than in the previous year. As a result dividends were easily maintained, and in the case of three of the big banks increased distributions were made. In two cases the banks decided to make an issue of bonus shares. Larger amounts were also placed to pension funds, this liability of the banks having been increased of recent years by the raising of salaries and the tendency of bank clerks to stick to their jobs, that is to say, there is less wastage than there used to be, and more men reach the pensionable age.

The amount of new capital issues was restricted by the fact that the unofficial embargo on overseas issues imposed in 1924 was strengthened by application to Colonial borrowers. In November, however, the embargo was entirely removed, and immediately ensued a great rush of foreign issues. As a result, the total emissions for the year showed little change as compared with 1924:

The foreign exchanges showed much greater stability in 1925 than in previous years. There were only four currencies at the end of the year to occasion anxiety, and to present opportunities to those speculatively inclined. These were the French franc, the Greek drachma, the Polish zloty, and the Rumanian leu. In the case of Great Britain, sterling rose from $4.73 to $4.837 on April 28, when the Chancellor of the Exchequer announced the return to gold payments. After the return the extreme range of the New York exchange was $4.86 and $4.8313, whereas the extremes in 1924 were $4.303 and $4.733. German, Austrian, Hungarian, Dutch, Swedish, and Swiss exchanges were fairly stable in terms of gold almost as much so as they would be under normal conditions. The Belgian exchange broke away from the French franc, thanks to the measures taken by the Belgian Government to put an end to the period of unbalanced Budgets and to restore the autonomy of the Central Bank. In the closing months of the year the exchange on Brussels was fairly steady at about 107f. to the pound. Similarly, the Italian lira, after displaying much weakness early in the year, owing to large purchases of cereals from abroad due to the bad harvests in 1924 and also to inflation of credit which caused the rate on Milan to rise from about 111 to 146lr. to the pound, finished the year at about 120lr., at which figure it had stood for about three months. The Greek exchange, owing to inflation, rose during the year to 395dr. to the pound, after having begun the year at 264dr., and falling to 247dr.

On December 31 the rate was 3754dr. The French exchange touched a new high record, namely, 136fr. to the pound. On the year, the depreciation in French currency was about 50 per cent. Inflation was continuous, and a bad impression was produced by the falsification of the returns of the Bank of France early in the year, and subsequently by the political obstacles which were put in the way of effective financial reform. Norwegian and Danish currencies fluctuated widely, but a distinct improvement was shown on the year. The same remark applies to Japanese and Brazilian currency. The following tables are taken from The Times Annual Financial and Commercial Review :

In the next table are shown the New York quotations for foreign currencies, which give a fairer comparison, since dollars were on the gold standard through the period, whereas sterling was on the gold standard only from the end of April :

On the Stock Exchange the year was notable for two features: first, a definite change-over of public interest from fixed interest bearing securities to more speculative shares; and second, a "boom" in rubber shares. Both had shown signs of developing in 1924; the first was due to higher money rates and the progress made by the recovery in trade, which increased the yields obtainable on industrial shares, while the second was caused by a steep rise in the price of rubber, due, in turn, to a great increase in American consumption of this commodity. According to the Bankers' Magazine, British and Indian funds showed a decline on the year of just under 3 per cent., and fixed interest bearing stocks as a whole a decline of 3 per cent. On the other hand, variable dividend securities showed a rise of 4.3 per cent. The net result was that the 365 securities of various types covered by the Bankers' Magazine, calculations fell in value by 53,925,000l., or 0.8 per cent. Some disturbance to market values was caused by the three issues of 3 per cent. Conversion Loan referred to on an earlier page, the minimum tender prices being fixed below market levels. In addition to other adverse factors, the banks were large sellers of investment stocks in 1925, owing to the increase in the demand for advances, so that in the circumstances the gilt-edged market may be considered to have done well in showing only slight depreciation on the year. In the foreign market, the reconstruction loans issued under the auspices of the League of Nations met with a steady investment demand. and closed materially higher on balance. Brazilian bonds were also in demand, and towards the end of the year a notable recovery occurred