Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-02
FOREIGN ECONOMIC
STATUS IS CLOUDED
by GERMAN FACTOR
Fear of Dumping Tactics by
Central Powers Spreads
Through Europe.
COMMODITIES Affected
BY DECREASE IN SALES
British Trade Circles Are Reas-
sured by Recent Aid for Bank
of England.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, August Gable and
radio dispatches to the Business Week
give the following swift survey of
business abroad for the week ending
August /:
Europe.-The European imbroglio has
had an unsettling effect on business,
exchanges and the bourses. Realiza-
ton that the seven-power conference
and. later, the Macdonald Henderson
visit to Berlin, have resulted in nothing
more concrete than an occasion for
some political handshaking, has left
business anxious as to the uncertainty
OF the coming months.
The increasing fear has rapidly
spread throughout Europe that Ger
many may take advantage of the
present crisis in order to dump her
large existing stocks of coal, iron and
steel products, ETC., at any price, either
by taking advantage of the artificial
imitation OF the mark or on account
Of governmental support Of exports
which has been made definite policy
as means of obtaining foreign cur
rency.
German Purchases Decline.
Already commodities are beginning
to feel the effects of the present i'm
possibility of German consumers to
continue their purchases of primary
materials abroad, due to governmental
DEGREES, which are paralyzing normal
capital circulation. This is especially
true Of copper, which, within the week,
tumbled to a new low. Except for
German firms having foreign balances
in trading countries, most purchases
for the German consumer have prac-
tically ceased.
Transformation continue to be
persistently uniform and featureless.
The half-yearly indicators just now
available show an average decrease in
general activity from 10 per cent to-
20 per cent below normal. Rail re-
ceipts are nearly 9 per cent below last
year, passenger receipts, per cent;
freight, about 10 per cent, the latter
being considered indicative Of the
country's total drop in activity.
Foreign trade in manufactures shows
considerable losses. Imports during the
first six months we're down IS per cent
in value, 8 per cent in weight. Exports
dropped % per cent in value, ID per
cent in weight. The depression has af-
fected all industries. Chemicals are
down 20 per cent; machinery and met
ais, 81 per cent; automotiveS, "a per
cent; textiles, 81 per cent; rubber goods,
Is per cent; leather goods, Al per cent;
furs, So per cent.
Losses are due not only to the closing
Of outlets and to prohibitive foreign
tariffs, but particularly to the high
French production costs evidenced by
May wholesale indiceS on domestic and
foreign manufactures which stood re-
spactively at $50 and $50. This 202-
point margin against domestic produce
ton is largely responsible for the fall
in manufactured exports. June show
ings. however, indicate an improving
tendency, with national manufactures
at $50 and foreigns at 366.
Business Confused.
French opinion is displeased at the
failure of the London conference. La
walls scheme was unfavorably viewed
due to the present deficit, but while
opinion is relieved to some extent, much
irritation is evident against Germanys
refusal of French demands for political
and financial guarantees. and Englands
maneuverS tending to make impossible
any FTanco-German entsnte.
Berlin-While the hysteria of recent
weeks is rapidly disappearing, German
business is still in a state of -aopeiess
confusion due to the inability to carry
on normal banking activities. Berlin
expects the present restrictions to
change but little until after the end of
the month salary and wage payments
are arranged. The Bosrse definitely Is
to remain closed until mid-August.
In the meantime, retail trade is con-
tinuing, with ample food supplies avail
able. but with purchases In all cata-
gories increasingly restricted because Of
limited funds. There is no evidence of
a rush to convert money into goods
The Reichsbank in the first week
10 pi~S~ -
small increase of notes in circulation,
because of the quick refiux of notes is
sued for wage payments. The crafty
ing feature Of the whole situation is the
complete absence Of infiationist symp-
toms In the presence of a certain degree
Of currency expansion and the contin-
ued downward movement of prices.
LondOn.-With the gold drain SEEM
ingly stemmed and with no fear of fur
Their bank troubles developing, business
is settling back more nearly to normal
to await developments. There are no
signs Of alarm. Cooperation from the
Bank of France has eased the strain
on sterling. RumorS of French loan
Of f20,000,000 are current, but there
is considerable public antipathy to any
such plan. .-...
London Prestige Gains.
London, by demonstrating its ability
TO remain a free gold market under the
strongest strain, has gained consider
ably In prestige. The chief lesson which
has been drawn so far from the events
Of the last few weeks has been that it
is not gold resources and other facili-
ties which make a money market, but
nerve and morale. France has definitely
shed much of her popularity with Brit
ain. both politically and as a neigh
boring financial power