Evening star., 1923-01-06
PARIS BREAK HAS
LIMITED RESULTS
BY STUART p. WEST.

Special Dispatch to The Star.
NEW YORK, January Sit might
seem a matter of surprise that the
break-off of the Paris conference
should have had so little effect on
the markets, in view of the state
ments often made in high places that
a failure to agree upon German repa-
rations would bring a serious crisis
in world affairs. The fact is that
practical financial judgment has not
been misled by the predictions of
diplomats looking to create a sensa-
tion or by the equally extreme views
taken by economic theorists.
No one can pretend to foresee what
will happen In case France carries
out her threat to occupy the Ruhr
and force her violent program for the
collection of the indemnity. The ma
jority of impartial observers un-
doubtedly hold the belief that her
attitude will have the effect OF hold
ing back industrial recovery in Eu-
rope indefinitely.
Germany Can Buy Here.
Still 1t all comes back to the prac-
tical question of how all this bears
upon the trade outlook in our coun-
try and in other countries. like Eng
land, which are not vitality dependent
upon the German payments of war
claims. Germany's share in our ex-
port trade is only about s per cent.
and II were to lose the whole il would
not be matter of vital Importance.
But there is not the slightest idea
that we would lose the whole or
even the major part. Occupation of
another slice of her territory Is not
going to cripple Germany'S buying
power, and Germany has demon
strated. despite all the great depre-
citation in her currency, that she had
the ability to buy more In the Amer
ican market during the last twelve
months than in the year before.
Financiers Disappointed.
1t goes without saying naturally
that the disagreement between the
to the financial communities every
where. Had Germany been allowed
to get on her feet 1t would have been
the most important step that could
to the commercial position she was in
prior to 1914 Upon European recov-
cry depends, in turn, the prospects for
any real expansion in our foreign
trade.
We have been gaining in recent
months In our exports to South Amer
lea and the near east, and these gains
have been shown in the latest fig-
ures. But not until Europe's buying
capacity is restored to something like
normal can this country look forward
to old-time conditions in the foreign
commerce, where agriculture, mills
and factories can extend themselves
to their utmost and still find abundant
outlet for their surplus production.
Home Market the Big Thing.
The European situation. as ii bears
upon home business conditions, ap-
pears. therefore, in two aspects. On
the one hand. everything that retards
recovery abroad increases the danger
of overproduction here, and hence
tends to limit our productive activi-
ties. On the other hand, nothing that
happens on the other side can di-
is, after all, the big thing.
With very little help in the shape
of foreign buying, the steel trade, as
we see 1t now. can expand to 80 per
cent of capacity-can in fact reach
very nearly the largest output of pig
iron and steel on record. What is
true of steel is true also OF wooden
manufactures, of cotton goods, of
boots and shoes-indeed of nearly all
the leading lines. 1t is recognition
of this. namely, the supreme i'm
portance of the home market, which
Europe this week has not met with
more response either in security
prices or commodity prices.
Money Rates Work Lower.
Money rates have been working
lower, as they always do at this sea-
son of the year, when funds involved
in the autumn crop moving, are re-
turning to the depository centers
This has been a sustaining factor in
the stock market, for where specula-
tive cliques are in for long cam
paign they need the assurance that
credit will be easy for an indefinite
time ahead.
1t is significant. however. that the
decline In quotations for money to
the lowest since last summer has not
evoked any enthusiasm in the bond
market. Bonds have been firm, but
there have been no signs of any re-
newal of the main upward movement
which was checked in the early
autumn. The customary January ire
investment demand" has this year
been singularly slack.
(Copyright, 1921