Evening star., 1921-05-14

shrunk to the low level of sS5. 900. 900
and that this was more than offset by
the import of $4,000 900 In gold This
visible debit against the United States
would be considerably augmented by
reckoning in the invisible items, for
with the most liberal estimate of
what Europe owes us for interest on
loans. both public and private. this ie
nowhere near equal to her credit in
tho carrying trade plus the expendi-
lures of American tourists abroad.
Europe Already Liquidnting.
Thus It appears that Europe has al
ready begun to l!quidnte the obli-
cations incurred during the war.
When we remember that Il was less
some of them in high places. were
talking about the possibility OF
Europe going bankrupt and lying
down on Its American Indebtedness.
this should be regarded as Il most
welcome development. But. unfor-
tunutely, It is not All unnixed good.
England and France and Italy have
bcttered their positions as debtors at
the expense Of the trade Of their
principal creditor.
1t is increasingly plain, however,
that European countries. when cut
Off from further extension Of Ameri-
can credit, set about becoming less
dependent upon American products
by trading more with one another.
This condition promises to continue
and to form hindrance to trade re-
Covery here, unless we find the means
to make it easier for Europe to buy
from US on long term loans. RecoE-
milton Of this is seen in the new ru!-
ing by the federal reserve this week
making exchange bills up to SIX
months. available for rediscount.
Domextic Trade status.
Developments in the domestic trade
situation continue of varying char
acter. There is no use denying that
the motor industry so far this month
has been a great disappointment. Iht
promising recovery Of March and
April has been followed by reaction
severe enough to influence automobile
and tire makers to cut prices Sharply
in an effort to stimulate business.
Inasmuch as the better demand
from the automobile centers had
been the bright spot in an otherwise
uncertain situation for the steel com
panies, the steel outlook mas breh
made to appear less favorable Inc
market has felt 1t necessary 70 uiS
count the passing OF dIFldendS by az
least two of the big independent
concerns. and has had to consider
the possibility Of a further downward
revision of steel prices before the
industry will have struck bottom.
About to Slash Prices.
Agricultural implement makers are
reuorted about to slash their prices
and this. too. has been q disturbing
irfuence, But these ar" instances
which merely bear out the conteH-
tion made all along that the turning
movement in business is not otAHE
made in any general way, put pY sec
tionS. or+s
rrom the motor. steel and harvester
industries are to be set. a& quite ~
-in1nor:aut, the advance during th'
last few days in copper prices ana ifL'
very substantial gain in railway lral'
fic as shown in the statistics OF ca'
loadjDgs and idle cars. from the sec
iond week of April on. The stoci
market has revealed a degree Of lr
regularity commensurate with SIM!
/ lar conditions in outside trade.
| steel and Motor Declines.
! Declinos in steel and motor shares
have gone on simultaneously with ad
yanceS in oils and coppers, and tins
Iuneyenness seems likely to continue
until trade rcadjuStmcnt is coinplti
ed in those quarters where it stu
/ has not yet run its course.
! The upward movement IN bondS ma
paused for two reasons. First. Their
/ is thp increasing competition from
| fresh output of new capital issues
! Second. there is the proba bility tina
| further reduction in interest rate
! will be slow because the demand IRON
| farmers and business men who Wer
unable until recently to get adequat
! accommodation will take up quite
part of the credit slack released b.
| the slowing down of industry gencr
ally.
| froDvripht 1921 }