Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-12
Delay in Debt Holiday Plan
Proves UnfavorabIe Fac
tor for Europe.
BUSINESS TONE is GOOD
IN LONDON AND PARIS
Stock Markets Reflect Revival of
Public Interest-German
Trade Slow.
Special Dispatch to The Star.

! Special Dispatch to The Star.
| NEW YORK, July 1l-Radio and
| cable dispatches to The Business Week
give the following survey of business
abroad for the week ending July IL:
Europe.-World business is less buoy
ant. The delay at Paris was almost
fatal to Germany and caused a renewal
| Of the gold and foreign credit drain.
| Spain Is faced with banking difficulties
| Of the first order. Britain, sensitive to
various foreign uncertainties, has given
way to degree of temporary nervous
| ness though the general tone still is
good. France is tempering domestic dis
| satisfaction over the debt accord with
an improved local labor outlook Thu
immediate future is not bright. Central
Europe probably will pick up If the
German situation clears. Italian indus
try Is entering the Summer slack period,
| but is optimistic.
LondOn.-Despite the uncertainty
! caused by the delay in settling the NOR
atorlum issue, the business tone is good.
| Settlement Is received as a strong bull
| factor, but the fullest psychological
effect has been lost by delay and the
| near collapse it has brought to Gsr-
| many. Cotton textiles are in a better
| position; wool is steadier. Non-ferrous
| metals have staged a strong recovery.
| Commodities in general relapsed late in
the week.
Outlook Improves.
Stock markets continue to reflect re-
viving public interest. Just now inter-
| est focusing on the long-awaited re-
| port Of the Macmillan Committee on
Banking and Finance. Due July IS, it
| Is expected to include some criticisms
| OF the Bank of England policy.
PariS-1n the last trying week of the
| rranco,American moratorium negotia-
tions, the French business outlook i'm
| proved slightly despite the generally I'M
favorable reaction in France to the
whole plan of a moratorium.
One OF the most encouraging factors
IN the Improvement is the partial set
tlement OF the strike among the textile
workers. As a whole, business is less
concerned over the sacrifices imme-
diately involved in the Hoover mora
forum plan than with the growing
realization that the Young plan def.
nitely is dead. Two factors loom large.
One Is that this years budget deficit,
already large, will be augmented by
the $80,000.000 of unconditional pay
ments which had been counted as LA
bilities The second is the fear that
this loss will be increased next year
by Frances guarantee to other creditor
| countries in case Germany demands a
further moratorium. Early Franco
German political negotiations are
scheduled to settle these problems, but
Paris IS frankly skeptical of the results.
Berlin.-BusineSs is greatly relieved
by the Paris settlement, though the
half-month delay in the consumma-
ton of the Hoover plan has deprived
1t Of great deal of its original psyche
| logical effect and has allowed the
! process Of disintegration of the German
! currency and credit system to make
dangerous, though not yet irreparable,
| progress.
| Gold Drain Resumed.
After short respite following the
announcement Of the moratorium plan
the gold drain on the Reichsbank has
resumed Gold is leaking again,
reached $25,000,000 on Monday s13.-
100000 Tuesday and S10,000,000 We'd
nesday. The general council of the
ReichSbank finally has been forced to
reimpose credit restrictions which at
first it was thought possible to abandon.
Current June indicators. including
savings deposits. bond sales and fail
ures. reflect the deepening depression.
| while the one-half per cent rise in
the cost of living index, the first in
crease in many months of continuous
fall, partly is the result of the burden
imposed by the emergency decree, in
Guiding the doubled sugar tax De-
partment store sales have been re-
markedly maintained, due mostly to
the stimulating influence of spectacular
price cuts. This is not representative
Of the greater contraction in other
retail sales.