Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-05
FOREIGN ECONOMIC.
BR|GHTENS.
DURING PAST WEEK.
Debt Holiday Plan Causes
Lively Notwithstanding and
Commodity Advance.
BRITISH BUSINESS GAIN
FOLLOWS PARIS FARLEY
France Still Struggling in Throes
of Depression Despite Improve.
ment Elsewhere.
Special Dispatch to The Star.


yer plan Is the most significant event
Of the week. It's causes and effects have
completely obl.terated all industrial and
commercial developments. Universally
booming markets during the past week
were spontaneous. Stock markets In
Europe rose from per cent to 20 per
cent within the week, while the most
active issues actually gained from 40
per cent to 90 per cent.
Commodities, especially the basic
metals were jubilant after two years of
four principal metals on the London
Exchange during the week sprang from
the usual $4,000 tons to more than 49,
900 tons, which, whether 1t was caused
by short covering or industrial purchas-
ing, Is highly enlightening as to the
why's and wherefores Of previous de-
clines.
The possible duration Of the German
effiux Of gold and foreign currencies,
both from foreign and domestic sources.
is not yet stanched and gives rise to
lion credit granted by the creditor ma
lions. The French cabal for the mo-
ment also is exercising o certain detri-
mental effect on the good already ac-
complished, but will certainly be short
lived, since France also has participated
to an unexpected extent in the Hoover
revival.
New Economy Measures.
For the second time in history. Spain
this week became q republic. Parlia-
mentary elections resulted in an over
whelming republican landslide. For the
moment the monarchist issue Is buried.
The new republic will, however, be faced
af AfH7R1fIfV
% The Catalan separatist movement,
(2) anti-clericalism, go Socialism.
There Is yet no valid reason for sup
posing that these issues will jeopardize
the new government. There Is reason
to expect, however, that political and,
consequently, business conditions In
Spain will be unsettled for an indefinite
period. A reassuring element Is the use
finally being made Of the Spanish gold
reserve for currency Sterilization. This
reserve is the third largest In the world:
exchange value of paper currency IN
circulation; has been boarded while the
peseta deprecated. Currency stability
viii be a support to business during the
unsettled political situation which lies
ahead.
In Poland the severity Of the depres-
sion has caused the government to IN
aug,lrate new economy measures, Wnlcn
include salary reductions OF 40 per cent
for government employees. Despite the
severity Of the crisis, no banks have
failed to meet all regular obligations.
Except for sporadic Communist riots,
which are being severely repreSsed by
the government, conditions are quiet.
Tension in the Austrian situation was
removed when the government, re-
spending to pressure brought by DR.:
Bruin adviser to the Austrian National
Bank, and foreign creditors interested
in Credit-Anstalt, agreed to guarantee
domestic as well as foreign liabilities OF
the reorganized bank.
Proposed Bank Features.
Revelation of Emile Francqui's plan
for a bank Of national export banks"
has stirred not o little interest in Eu-
rope. Features Of the proposed bank
include initial capital Of 100000, 900,
fully subscribed, but only 10 per cent
to 20 per cent paid in; bond issue
up to four times the banks capital, the
bonds to be jointly guaranteed by Eu-
ropean governments.
M. tranquil Is believed to favor In
GLIDING Russia In the list Of countries
to which credit may be extended by the
bank.
London.-The generally improved
world outlook, despite the degree Of UNI
certainty over Paris conversations, has
created an improvement in the tone OF
British business, though it has failed
to bring about any wide increase in
actual trading. Stocks and commodi-
ties are markedly better. Retail sales
have improved. The labor situation is
better. due to the provisional settlement
Of the engineering trade dispute in
involved.
Paris.-Conditions continue to be per-
sistently unsatisfactory. With the
trend toward sterilization still well be-
low last years levels, there Is little hope
now for early improvement. Rail re-
ceipts and carloadings again have re-
coded sharply. The textile strike, now
entering the seventh week, Is not yet
settled. Stock markets, buoyed by the
Hoover proposal and the stimulus from
New York, are stu active, but pessi-
Is becoming evident. Debt conversion
projects, due for consideration, have
been sidetracked by more pressing is
sues and will not be considered in this
session Of Parliament. This adds to
budget difficulties. Already the 1891
deficit Is estimated ct $92, 100000.
Berlin.-Business Is arxiously await
ing the outcome Of the French-Ame
can debt moratorium parleys. Accept
ance Of the French amendment means
a budget saving Of $3.50, 000,0 900 instead
of $3.50, 000, 900 according to the original
Hoover plan. The pressure for repara-
ton transfer on foreign exchange Is
relieved in either case.
The stock market, though nervous,
has maintained most Of its gains.
Stock index at the end of the week at
1877, against the mid-June low Of 65.3.
The money market has stiffened; the
private discount rate Is unaltered at