Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-09
Despite UnfavorabIe Develop
mentS Fears of Further Col
lapse Are Waning.
ENGLAND AND GERMANY
HIT HARDEST BY SLUMP
Import Restrictions Prove a Dis
turbing Element in European
Business Circles.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. August s.--Cable and
radio dispatches to the Business Week
give the following swift survey OF BUSH
ness abroad for the week ending Au-
gust 8:
EurOpe.-Europe Is unsettled again,
though there are encouraging factors to
counterbalance new worries. and fears
OF further collapSes are waning.
England and Germany are the TN
settling factors. Stubborn reluctance
on the part of the Bank of England to
utilize the new $3.50, 00O, 600 credit came
to sudden end Wednesday. when
sterling exchange dipped violently as
the Bank Of France Withdrew Its sup
port. After harried two hours. recov-
cry set In when the Bank of England
drew on the bills forming the new
FTanco-American credit. Sterling Is up,
but is stin below par. Confidence in
Britain Is shaky.
Political Factors In Germany.
Germany buoyed both foreign and
domestic confidence when banks re-
opened without disturbance. Deposits
the first day exceeded Withdrawals, even
in the Danat Bank, which closed It's
doors during the July crisis, but which
operates now under federal control and
guaranty.
Two new factors in Germany Gre pre-
venting a return TO normal business.
One is the worry over the possible cut
come Of the PruSsian plebiscite. II the
vote for dissolution OF the Diet carries,
even though elections cannot be held
until February, 1t win jeopardize the
Bruening government, just as did the
Hitler success last year. The country
is calm, but the outcome uncertain.
The other disturbing factor comes in
the new import restrictions. Added to
already stringent foreign exchange
limitations. they have thrown business
into confusion. Importers are unable
to pay their debts on merchandise.
freight or insurance. Under the new
restrictions, foodstuffs and manufac-
tured products are enlarged. Even
Central European transit trade Is held
up Trade associations are making n
strong appeal for relaxation Of reei-
lations.
London.-Except for wednesdays
break in sterling the atmosphere IN
London continues remarkably calm.
Even the temporary break in exchange
caused only a few hours OF gloom
Bankers attribute It to the hiatus be-
tween the withdrawal of market sup
port by the Bank Of France and the
effective use of bills forming the new
Franco american credit.
Investments Refrozen.
Apart from financial houses, the gen.
eral business background Is blacker than
Is generally admitted. The German
crisis came at an inopportune moment.
It refroze investment money, and firms
in need of new capital have been
thrown back on their internal resources
again. Returning confidence has been
damned, and trade has suffered.
Paris.-Free from the bank worries of
Britain and Germany, secure in the
knowledge that two billions Of the
worlds gold reposeS in the vaults of the
Bank of France, aware that domestic
industry, even at 10 per cent to 20 per
cent below normal activity. is not badly
of In view Of world depression, French
business Is sitting back and meditating
on the troubles of other nations, won
dering how long it viii be possible to
continue without being seriously AZ
fected by the crisis.
Interest this week conferred in two
eventS-French participation in the 200
million credit to the Bank of England,
with accompanying support of sterling
by the Bank OF France; termination of
the textile strike, which has involved
400 factories and nearly 100, 900 workers.
BerIin.-Germany's step-back from a
banking moratorium to something APP
preaching normal credit functioning
without disorder or distress to any i'm
stitution has inspired q return of con-
fldence, badly needed. OF the elaborate
precautions set up to protect the move,
and prevent inf1ationist possibilities,
the most drastic is the is per cent
discount rate which is likely to be re-
duced within 10 days II no new run
develops. Business Is already antici-
pating this relief.
Limiting Imports.
Next most significant development
Is the governments drastic policy to
limit imports, TO supplement regula-
ton OF all foreign exchange trans
actions.
The new regulation is an attempt
to exploit the export Of fabricated prod
uctS. Manufactures are practically
prohibited from entry into the country.
Seml-manufactures can enter In limited
volume only. Raw materials, indispen-
sable to industry, are to be admitted
freely. The plan Is to be enforced
through state control Of foreign ex-
change.
MiIan.-The aftermath Of the German
crisis, added TO the usual Summer dull
ness, continues to depress every branch
OF Italian business activity The stock
exchange is weak with very little bust
ness except in bonds, which remain
steady and moderately active The ex-
change rate shows some improvements,
although 1t is still at the gold export
point. As yet the Bank Of Italy Is pur-
suing q policy of buying gold tnew
shipment Of 30 barrels Just received
from New YORK.