Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-15
Washington Ticker
BY CLINTON COFFIN,


BY CLINTON COFFIN,
Associated Press Financial Writer.
Latin American countries need to
borrow about $50O,O0O,0OO on inter-
national money markets during the next
year in order to maintain their economic
balance. Prospects for the supply being
provided on reasonable terms are far
from rosy, but it is probable that adj
vanceS will be made and that the in
veSting public of the United States will
be called upon for most of that amount
, This represents the judgment of
American Government observers spe-
cializing on financial outlook in that
quarter. Indeed, the first big loan in
the anticipated list, a $4,000, 900 tender
for Cuban public works, has already
been fioated and will be followed up, it
is understood, by $20,000,000 short
term advance, presumably applying to
the 1880 Cuban sugar production.
American agents who note the need
for public borrowing now evinced by
South and Central American countries
say that since 1924 the balance of in
ternational payments for that area has
been maintained by continuous stream
of new foreign investment, chiefly COM
Inc out of the United States. The bor-
rowings have largely gone into public
works, in the form of harbor and roads
construction and city sanitation and
water supply. One line of credit, estab-
liShed in London for valoriZing Brazilian
coffee, is keeping about sac, 100000 re-
volving, with some halts as coffee moves
to markets. Beginning in 1928 the
stringent credit conditions brought
about in the United States by the era
of intense security speculation cut off
Ia nd
has kept them cut off until now.
This cessation in the flow of new
capital to investment in Latin America
which has persisted for many months
is now set down by most observers as
the primary cause for the depreciation
of several South American currencies
which is daily reported on the exchange
markets. 1t has probably contributed to
the decline in prices of listed bonds of
several Latin American countries, and
! it Is embarrassing the remittance to the
! United States of payments for manu-
| featured goods sold there by this coun-
try's exporters. Government people say
| that South American purchasers in a
| number of cases, finding their own cur
rency deprecated. are depositing the
price of the goods bought in local banks
and letting the seller work out the ex-
change problems.
| II the flow of capital from the United
States to the southern area resumes
manifesting itself either by the pur-
| chase of bonds evidencing debts Of gov
ernmental and municipal units or by
| direct investment in utilities and en-
| terprises, some of these symptoms of
| unbalanced economics, such as depre-
ciated currency. will be expected quickly
! to vanish. The best hope that the
i money will be forthcoming from the
United States or from other investing
countries of the world is based on the
prevailing low level of interest rates.
Julius H. Barnes, chairman of the
national business survey conference
called by President Hoover last Deem
Der, spent day or so in Washington
this week and expressed the opinion
that general conditions justified cheer
fitness as to the business outlook One
| of the things which have been giving
Mr.. Barnes and higher Government Of
| ficials cause for optimism lately is an
apparent check now being observed in
the prolonged decline of commodity
prices. For the second successive week
the various series of indices which
measure average wholesale price levels
have remained stationary or nearly So
Just what caused nearly the whole
! collection of commodities which enter
into human usage and supply to drop
during January from low price levels
to lower is still a matter of debate.
The exact degree of the decline of the
composite level varies in accordance
with the different methods of express
ing it. On a percentage basis, average
wholesale prices appear to be ranging
at present at about 1870 per cent of
| 1914 levels, whereas IA months ago they
were, roughly, at point representing
140 per cent of 1914 levels.
In the theory of many economists
| any further substantial recession in the
! collective price levels would raise the
| prospect of enforced downward read
| Justment of wages and salaries, and the
! hating OF the recession is consequently
| being warmly welcomed.
In producing $500 900 tons of coal
tar last year by the diStillation of coal
the United States took production lead
ership among nations which have an
output of this highly valuable industrial
material The Commerce Department
which sets up that estimate. credits
Great Britain with average annual pro-
duction in recent years of 1,709,269
! tons. while Germany, the next most
important national producer. has an
output of probably 100000 tons. Coal
tar Is the base for numerous and i'm
portant chemical and dye products
which modern industry utilities.