Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-06
Britishers Continue Skeptica
OF Investments in Their
Own Country.
FRANCE is ATTRACTING
BULK OF PRIVATE FUNDS
Creditor Nations Abroad Accept
Basic Advice, but Disagree
on Interest Rates.
Special Dispatch to The Star.

NEW YORK. September 5.-Cable
and radio dispatches to the Business
Week give the following survey of busi-
ness ABROAD Tor the week ending
Europe.-The conclusion of a franc
dollar credit equivalent to f8o, 900 900
granted by American and French bank
ers TO the Bank OF England has failed
70 produce the desired PSYCHOLOGICAL
erect in Europe. Last week it was
thought that if England were only tided
over its immediate difficulties Europe
would enter period of relative tran
guilty. But now the contrary seems to
have been the case.
Wnlls sterling has been made sales
proof for some time to come by the
gigantic mobilization of foreign credits
with which banking is able to parry the
repatriation of foreign capital. these
credits are not sufficiently invulnerable
TO meet the combined fight of domestic
and foreign funds
Flight Of Capital
The situation is daily becoming more
accentuated due to the average British
er lack Of faith in the ability of the
national emergency government to insti-
tute economy measures required to bal
N@LS SA0SCG CA1dG Ill DC DdldJdO DIE
70 a voting majority Therefore. domestic
capital Is continuing to seek a safe
harbor outside of England, most of It
rnolng its way to France
All creditor nations except the United
states are now agreed in principle upon
acceptance Of the conclusions of the
Basic Committee which, in view of the
fact that Germany is unable imne.
oIaIeiy 70 refund its short-term credits.
approved their extension for six months
and proposed that each country sep
arately negotiate terms of renewal Eng
land suggests interest rates of 7 per
cent, France per cent. while the hardy
Dutcn see nothing less than IL per cent.
However. 1t Is thought likely that some
concerted action will be taken to reach
q nxed interest rate equitable to all
countries
The death Of the Anschluss has been
omclally announced. It Is curious to
note that it was not the polemics of
The Hague Court that caused its de-
cease, out the course Of financial events
more powerful than human wishes.
Since the outset. developm ents have
been such as to force both Austria and
Germany to resort to French financial
aid which was inevitably conditioned
upon the complete reputation of the
Anschluss
1t is rumored that France, in ex-
change for the recent credit to the
Bank OF England. intimated that she
Desired England to recall the 100000
O0O shilling Austrian credit. loaned
over the heads of the French bankers.
and which is now only repayable by a
similar credit placed in Austria by
French banks.
Seeking New Loans.
Bulgaria, Poland Hungary. Rumania
and Yugoslavia again all find them
selves momentarily pressed for new
loans and are turning their eyes to-
ward France in hopes of relief. But,
except in the case of Austria. interna-
tional lending activities by France will
henceforth be greatly diminished.
Bankers are becoming increasingly
fearful OF the way demands are ac-
cumulating with no end of the crisis
in sight.
Berlin. - Germany continued this
week to make some progress back to-
ward normally, but under two shadows,
One emanated from the stock ex-
changes. reopening on Thursday after
being closed for So days. with the new
level OF securities prices drastically
lower. The other was cast by the in
stability of the foreign exchange stu
alton.
Savings bank returns for the two
drop in deposits from 2.67 billions to
EST billions, or 38 per cent. which was
considerably below expectations.
:, Industrial employment is continuing
its gradual decline with the striking
exception OF the radio industry, to which
the Berlin show brought unexpectedly
heavy domestic and foreign orders.
.Parls.-Conditions continue subnor-
NAL, with the outlook none too bright,
but any acute development of depres-
sion. throughout the country creating
problems similar to those faced by Eng
land seems unlikely. Unemployment is
increasing slowly. the weeks advance
amounting to 2 per cent. But time cuts
are spreading, particularly in Northern
France, where over so 900 metal workers
are now affected by the recent decision
OF the railways to suspend rolling stock
orders in view Of their deficit.
Political Handicap.
Persistent countrywide inclement
weather has seriously damaged the
wheat crop as yet unharvested, thereby
throwing of previous estimates Of
French wheat requirements. The ex-
tent Of the damage is set at 20 per cent
at least.
Observation-Disclosures British business
Is temporarily treasured by the prompt
economy measures Of the new govern
nent, there Is no underlying certainty.
The refusal Of Labor to follow Mac
Donald, Snowden and Thomas makes
the government national In name
only. with some possibility of finding
its program reversed by a Labor VIC
tory when elections are held.
The Labor policy is based on resist
ance to dole cats, increased direct tax
alton, mobilization Of foreign invest
ments with insistence that the crisis is
by bankers who are instru-
ments of an international conspiracy to
reduce wages and lower the workers
standard of living.