Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-23
FOREIGN ECONOMIC
CLOUDS SHOW SIGN
Of SILVER Innings
Loan to Hungary and Extern
sion of German Credits
Aid Situation.
EASING OF POLITICAL
TENSION HELPS TRADE
Uncertain Financial Conditions in
Britain Remain as Check to
General Recovery.
Special Dlspatcb to The sian.

/ Gpecldi D1Spatcn TO Inc star.
NEW YORK, August 22.-Radio and
cable dispatches to the Business Week
! give the following survey of business
abroad for the week ended August %;
Europe. - Among positive develop
ments the week brought continuation
Of the SIS 100000 18-month Internal
tional loan to Hungary, expected to re-
lieve the exceedingly acute financial
and economic situation in that country
by permitting relaxation of banking ana
exchange restrictions. 1t also brought
the news of the initiating Of the agree
ment whereby Germany's 81 ESQ, 600 600
in foreign credits are extended TO mid
January And, finally, It elected from
the Bankers (Wiggin CommitteeD Con-
ference at Basel a highly significant,
though guarded. approval Of and appeal
for a real revision Of German repara-
tions.
Conditions in Germany show some
further progress toward normal. but in
Great Britain the coming week VIII
bring to a head the budget crisis sno
the underlying tariff issue. Judging
from press reports, American sentiment
seems inclined toward the belief that
the economic recovery of the United
States is possible even without parallel
recovery by Europe, providing Europe
suffers no further economic disintegra-
ton: and to the conviction that such
disintegration hrs been made unlikely
by recent financial measures.
ro..::..ical Tension Eases.
Conclusions regarding Europe appear
premature. What with huge foreign
credits frozen in Germany, with Eng
land facing a budget crisis and sterling
arbitrarily pegged, the European situa-
ticn continues obviously arti1cially
propped It remains to be seen whether
economic conditions can now I'LL in the
natural foundations before Winter or
whether Winters stresses viii require
further emergency propping to prevent
a collapse.
The most favorable general factor af-
fecting the whole situation is the APP
parent easing of political tension: the
most unfavorable the uncertain ffnan-
cial condition Of Britain with its re-
sulting fiscal strain on many countries.
LcndOn.-Business has been duh,
rejecting the influence Of the holiday
season, more Importantly the financial
uncertainty as 10 the decisions of the
cabinet on taxation and economy. An
nouncen1ents this week have cleared 10
some of the uncertainty though enough
Still remains While parliamentary ac-
ton on emergency proposals Is eagerly
awaited. business men feel that politics
must inevitably give way to the eco
nonlic necessity and that the compTo-
misses earlier indicated by the meetings
between leaders of the three parties
must 60 through II any measure Of
confidence is to be restored In any
event the possibility Of an Autumn re-
viyal is very remote.
Giit-edged securities fell OF badly
this week on the expectation Of a tax
on fixed interest securities. This has
added further to the gloom in the mar
kets. Some encouragement has come
from the gain in exports of manufac-
tured products.
Commodity Situation.
Among the commodities. cotton bust
ness was restricted due to continued
falling prices; wool textiles were quiet,
but anticipated an improvement In the
next few weeks; rayon was q little
Stacker. but showing a steady flow Of
orders for yarns; iron and steel were
at standstills except for the pig iron
furnaces whose output will swell al
ready substantial stocks; inquiries for
Welsh coal have been small, but the
demand shows a little.
Berlin.-LiQuidatio of the credit
crisis is progressing satisfactorily. Both
Government and public are realizing
more and more that the unavoidable
next step in the process will be drastic
reduction in standards of living. This
viii include new wage cuts, breaking
down of cartelized prices as well as an
intensive drive Upon foreign markets
I The cabinet Is busy drafting new emer-
gency DEGREES.
The London experts agreement has
disappointed industry as far as the mat
ter OF payments Of reparations in kind
are concerned since the plan provides
for payment of less than half of the
deliveries on current contracts during
/ the holiday year.
Difficulties encountered in the Basel
negotiations are expected to be settled
within the next few days with the pos
sio1e exception Of the right to dispose
, OF mark balances which Germany esti-
mates at l90, coo GOO Germany is re-
luctant to agree to a complete release
fearing they will be used for payment
Of exports thus reducing the amount Of
foreign currency resulting from an ex-
port surplus which in July reached rec
ORD total Of 100000.
Paris--Current indicators show little
, tendency toward imp ovement in busi-
ness activity Only slow progress Is
! n1Islg maze IN the oeHatlOn oil Prices,
IN which France Is tagging behind the
I world and which probably constitutes
! IT'S most fundamental Domestic eco
nonnic problem. Thanks to an increase in
the customs receipts. the total July rev
eaues were only slightly below last
years, but the yield Of ssales taxes was
| II per cent below estimates, 10 per cent
| below last year S. indicating the extent
I Of the business showdown The mid
August BoIrse index was lowest In four
( years.