Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-25
FOREIGN BUSINESS
AWAITS ADVENT Of
REPARAT|ONSLOAN
Conditions in Britain and on
Continent Described as
Quiet in Review.
USUAL SPRING REVIVAL
FAILS TO MATERIALlZE
Purchasing Power Still Impaired
After Collapse in Stock
Markets.
Special Dispatch to The star.

Special Dispatch to The star.
NEW YORK, May 24.-Cable dis
patches to The Business Week give the
following survey of business abroad for
the week ending May "a
Europe.-Nothwiths the ex-
traordinary amount of capital modified
preparatory to the Offering Of Inter-
national Bank shares and Young bonds,
money remains ample at the lowest
rates since the war. This plethora OF
| idle funds itself is an index of the de-
gree of business lassitude which exists
and the new lower price ratios. On the
other hand. it is in itself condition
F! facilitating revival. There is no lack Of
adverse criticism of the f1otation OF
conditions. j. M. Keynes stigmatizes
the issue as one of the stupidest con-
| ceivable undertakings. The condemna-
ton is not unjustified, comments the
German Volkswirt, since the worlds
money markets for months are d1slo-
Gated in order to prepare for the nota-
| ton of an issue without economic oc-
casion. The purpose belongs to chap
ter of postwar economics idiocy for
| political motives"
Prospects for Loan.
Nevertheless, now that financial
preparations have been made and only
| technical difficulties protract final ar
| rangements business only wants to get
| the issue out of the way, from capital
| markets, Oversubscription by France
Is considered assured and no material
/ difficulty Is anticipated In marketing
| the other European quotas but response
in the United States is queried. whereas
at the time of the Paris conference
participation Of the United States vas
considered an indispensable backbone,
| it is now pointed out that the whole
issue could be readily placed in Europe
| were the French desire to make the
United States a Joint stockholder in her
reparations claims disregarded, and
French readiness to subscribe accepted.
Failure of business to realize the
usual degree of Spring revival has
dampened optimism. Realization Is
penetrating that no rapid recovery is
probable. Instead a protracted period
| of restricted production and trade is
| in prospect until world purchasing
power gradually RECEIVERS the losses SUI
! fered through the collapse OF the price
ceiling Recurrents relapses OF pessi-
mism. however, exaggerate the difncui-
| ties. It is anticipated that the Summer
season will be marked by high degree
| of financial activity stimulating bust
ness initiative and gradual expansion
of turnover.
Iron and steel conditions are reported
unsatisfactory throughout Europe, eX-
cent In France, where the domestic
| market is relatively strong. Except In
France. present production quotas ex-
coed market demands. The steel carter
| is internally strained by the desire. par
| ticularly among the Germans, to re-
duce quotas s25 per cent, which would
defict in France and allow for greater
! imports. The French, naturally. are OPP
posed to allowing less favorable condl-
| lions in Germany and elsewhere To
operate toward restriction OF their pro-
duction below home sales possibilities.
Great Britain-It is not impossible
! that business will take heart, once the
Young bond issue is out of the way and
| financial markets are again normallzed
| but for the moment sentiment is dis
tinctly gloomy. During the wee'. Lon
| don lost another 20 millions in gold
to Paris. Because London's key posi-
ton as a financial center is founded
upon the solidarity of sterling exchange
such losses always exercise dispro-
portionately depressing psychological
effect. They are now accumulated, be-
cause no further large African or Aus
| tralian arrivals of gold, such as onset
recent losses, are scheduled. Foreign
trade returns add gloom with April
the worst month since the 1926, strike
| year.
Industrial reports emphasize the
hand-to-rnouth character of buying,
restricted continental demand and ex-
cessively sharp competition over what
/ L,ret fe S0Unral lnHIV1n.
ual wooden mills have compromised on
wage disputes and resumed activity.
Conditions Quiet in France.
France.-Business is featureless and
| tranquil The stock market is marking
| time. Interest is absorbed in the In
| ternational Bank and Young bond is
sues. Threefold oversubscription Of the
French quota of $50 100000 to SOC, 000,-
| 900 is expected. Progressive liquidation
of foreign obligations, utilizing a share
of the Young bond proceeds and large
| treasury and sinking fund Surpluses, are
expected during the year. This will re-
| duce capital congestion.
The most recent production index
| for the end of March was 144, COM
pared with the 1929 average of 1879.
Building and iron and steel are each
up points; automobiles, Is. Foreign
trade for the first four months shows
| imports down 8 per cent by value. but
up 100000 tons by weight, notably in
raw materials. an index of manufac-
turing activity. Exports are slightly
lower, both in value and weight. The
railroads plan to ask for 20 per cent
increase in passenger and s per cent
increase in freight rates, due to unsat-
isfactory results of operations last year.
AS consequence of the recent increase
in automobile tariffs, the local General
Motors dismissed rs employees and dis
continued advertising. Other dealers
are similarly economizing in overhead.
The situation for the American auto
motive trade is worse than was at first
anticipated The position of the Ford
assembly plant, however, Is relatively
favorable because it imported heavy
stocks of parts prior to the tariff in
crease, and now is negotiating with
French steel works for future require
ments, thus minimizing imports.
Holland.-BusineSs is generally dull,
with money again very easy and
the stock exchange lifeless. The deep
ening depression in Germany is viewed
with uneasiness: likewise the favorable
reception of Young bonds is not as
sured, since, unless there is a higher
yield than is SO far indicated they are
of little interest to the investor
with IL branches, has merged six pro-
vincial banks with 40 branches, thus
marking another step in banking con-
centration.
Germany. - Although the stronger
tone on the stock market is sustained,
current business indicators still fail TO
el,nrv i-r,r-oyerray>t THE feehtenaeS nf.