Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-24
EASY MONEY SEEN
HlAS BUSINESS AID
Financial Leaders Hope Re.
ncoVery in Industry Win
Be fastened.
BY DONALD c. BOLLES,
Press Financial Writer.

AseDCAHtSh EAccs 1Ah1ASidA WHEEL
NEW YORK, June 24.-scanning the
business horizon of the world for signs
of recovery fromlthe current state of re-
cession, American financial and indus
trial circles are hopeful that the easy
conditions in the American money mar
ket may help to bolster the purchasing
power of its foreign customers.
Indissolubly linked with the present
day prosperity of the Nation. the trend
of foreign trade has continued steadily
downward since last Fall, and in May
exports reached the smallest proportions
in several years, bringing the loss for
the five months of 1896 to about $780,
100000 as compared with the like period
in the previous year.
Just as the dearth of American CAPT.
tai available for foreign investment dur
ing the bull stock market adversely af-
fected the purchasing power of potential
buyers of American goods, so the easing
OF money rates are expected to revert
attention to foreign investments.
Foreign Exchange.
Some close followers of world trade
say they expect definite upturn in
foreign trade to set in when foreign
exchange Is again bolstered by fiotation
of foreign loans in the American money
market. Last year the volume of foreign
securities offered in the United States
dropped TO $700, 000 900, the smallest
since 1928, and far below the billion
dollar average maintained in recent
years.
Establishment of the rediscount rate
of the New York Federal Reserve Bank
at 212 per cent last week has been ac-
cepted in financial circles as assurance
that the cheapest money rates in many
years will continue for many months,
nj ctl hal, -N~ i
market in which most foreign invest
ments are foated. Bond men anticipate
a large increase in foreign offerings il
the easy credit injects new vitality into
the market for fixed Understanding
securities.
An encouraging sign of the business
relations of the United States with the
rest of the world, as viewed by the Ma
tional Foreign Trade Council, is the fact
that the demand for finished products of
American factories has been the least
affected by the worldwide depression.
The sale of finished products now
constitutes the largest item in the Ma
tons foreign trade, totaling about 81
520,OO0,000 last year, to outStrip raw
products, and reports to the Foreign
Trade Council indicate that the reduc-
ton OF sales has been comparatively
small. 1t is expected that the close of
will show only or per cent reduction
from the previous year, the gains the
hrst part Of the year offsetting the loss
IN the last half
The Importance of the sale of finished
products abroad to American industry is
emphasized by the fact that about 80
600 of the 197, 900 American manufac-
turtles now depend upon foreign mar
kets as an outlet for part of their
- -.
10 per cent of their production and
constitutes the difference between
breaking even and making a profit
Some export IS per cent.
American Goods Needed.
The reason for The stability of the
foreign market for American manufac-
tured goods is attributed largely to the
fact that the United States manufac-
urer has less competition than the
grower of wheat or cotton and the de-
mand for his product is less affected
by economic conditions. Foreign coun-
tries which have embarked upon a pro-
gram of industrialization need Ameri-
can machinery for their factories, as do
governments and municipalities in car
rying out road building and other pub
lie improvement programs.
observers OF foreign trade also are
watching closely the efforts to adjust
production of raw products to world
needs and dispose of the surplus which
has largely contributed to the decrease
IN purchasing power both here and
abroad
The destiny of commodity prices is
wrapped up IN proper balance being
maintained between production and
consumption. Large stocks have de-
nated the price of sugar and cocoa to
Wnere they are selling below cost of pro-
auction and much coffee is being pro-
duced under the same circumstances.
Gotten. grain and rubber are other COM
moolties which have declined in recent
weeks to low levels adversely affecting
the buying power of millions.
economists have stated that stocks of
important groups of commodities al
lowed to accumulate are so great that
their liquidation will take many months
TO establish a proper balance, even if
production Is sharply curtailed and
consumption increased to the high rate
OF 1928. Efforts to stem overproduc-
ton have been made in MANY lines this
year. but their effect has not vet been
apparent.
Much difference of opinion exists as
TO what will be the effect of the Hawley-
Smoot tariff bill. So far there have
been few conclusive indications that
other nations plan reprisals. save per
maps canada. Nations have protested.
put so far have confined their activity
to talk.