Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-08
Little Recovery Is Expected
Before Next Year Unless
Stimulus Is Applied.
GAIN IN UNEMPLOYMENT
is APPARENTLY GENERAL
Transition Period Indicated in Re-
ports From Britain and the
Continent.
Special Dispatch to The Star.

Special Dispatch to The star.
NEW YORK, June 7.-Cable dis
patches to the Business Week give the
following survey of business abroad for
the week ending June Z:
Europe.-There are no indications Of
any improvement in the business de-
preston and none is Immediately eX-
pected. General activity is slack; prices
are still weak; competition sharp; profit
margins narrow. Looseness of money
has increased, but investors are not yet
confident, and capital markets are mar
row, with interest rates still out of line
with money rates. 1t is the consensus
of opinion that it will be matter of
time before conditions consolidate, with
little recovery, If any, before next year
unless some unforeseen outside stimulus
enters.
1t is expected that contracts covering
the Young bond issue will be signed on
June and subscriptions opened in
nine countries simultaneously on June
10. Underwriting bankers will buy the
loan at a uniform price of 90, less 4
points commission. Issue prices will
vary from country to country, accord
ing to respective issue taxes. In France,
where the bonds have been tax exempt
ed, surcharge of points will be add
ed, the proceeds of which are to accrue
tive issue prices will vary, probably
being lowest in the United States at 90,
and highest in France at SO.
British Trade Restrained.
Great misunderstanding and uncer-
tainty are the keynotes of present bust
ness conditions. Immediate uncertainty
centers in the final terms of the Young
bond issue and in Snowden's conversion
loan plans These. and the possibility
of further reduction in the bank rate,
are factors which will determine the
future of money and security markets.
With unemployment increasing, and
expected to exceed 2 millions before the
end of the year. weight is attaching
to governmental plans to relieve unem-
ployment. No definite projects have yet
come from the Labor government. Pes
simists are inclined to anticipate
further increases in taxation despite
Snowden's assurances to the contrary.
Indecision is also caused by the I'M
certainty of the course the growing
tariff movement will take. Future i'm
ports are likely to be profoundly af-
fected by the inevitable reconstruction
of Britain'S economic foundation and
the cleaving between traditional polit-
ical divisions.
Apart from restrictions imposed by
world depression, England is manifestly
entering an epochal transition period
both in its internal structure and ex-
ternal relations to the empire. In
dustry is reluctant to enter upon long
time programs; investors are similarly
hesitant; and the current outflow of
capital abroad, notably to the United
States, is not merely flight from tax
alton, but betrayal of the basic I'M
certainty and uneasiness in business
planning. In the final analysis, Eng
land must sooner or later export that
part of its manufacturing population
which has been rendered superfluous by
the growing manufacturing autonomy
OF the colonies. Industry must be freed
of the lightweight cost of supporting
the present unemployed, now the major
handicap retarding recovery of British
competitive ability. No government so
far has had the courage to undertake
so radical change in the economic
structure, though many governments
have recognized the ultimate necessity
Recession in France.
France-Statement from key indus
tries such as iron and steel, chemicals
and automobiles tend to subStantiate
recent persistent reports of a slackening
of activity, though current activity may
hand are executed. New business COM
ing in, however, shows distinct CONTRA
action. Government reports also jndi-
cate a diminishing in the volume of
domestic commerce and an increasing
number of bankruptcies, though foreign
trade, except in luxuries and textiles, is
normal. Recession is not expected to
the degree experienced in other coun-
tries, particularly in terms of unem-
Ill Ill 10. l.
shortage of domestic labor enables
France to maintain employment by
repatriation Of foreign labor now
present in large numbers. Also, Parlia-
ment, which reconvened on June 3 for
a 40-day session, is expected to legislate
the so-called national equipment"
program which calls for expenditures of
at least $200,0O0,000.
Germany--The recurrent unfavorable
balance of government finances and the
evidence that existing taxation is al
are the most immediate factors in the
profoundly unfavorable general eco
nomic situation. For the third time
within one year the country has been
obliged to cover deficits occasioned
chiefly by record unemployment. The
budget now before the ReichStag is be-
lieved to be 200 millions short. Total
Unemployment SUdnQS at Z,lUU,UUU, Oh
which state subsidized unemployed num-
Der 1,950,000 compared with 100000 a
year ago. Capital stringency in turn is
accentuating business depression and
handicapping revival Under these con-
ditions the only alternative is all-round
reduction of government expenditures,
a move anticipated in proposals likely
to come from Moldenhauer next week.
RAductiOn in Wages
Event of the week is the award by
government arbitrators of 10 per cent
reduction in wages in the northwestern
steel industry, subject to the condition
that manufacturers undertake to make
corresponding reductions in steel prices
one month previous to the wage cut
This is expected to prove a precedent
for co-ordinated readjuStment Of car
tel-controlled prices and state-regulated
wages which will be more nearly in
keeping with the lower levels of un-
controlled commodity values. Illus
trating the need for such readjuStment
is the decline in the price index of
semi-manufactureS from 90 in Janu-
prices remained pegged at los. The
steel award is likely to be followed by
coal and other carteliZed industries.
The conference of German and
American sound film interests, sched-
uled to take place in Switzerland in
the last part Of June, 1t is hoped will
settle patent disputes and reopen the
German market, now. monopolized by