Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-29
WORLD TRADE BOON |
|. SEEN IN DEBT PLAN.
Hoover Proposal Accepted as
Turning Point in De-
preston Crisis.
BY MARK SULLIVAN.

The sensational change in the. bust
ness psychology of the whole world that
occurred last week is universally attrib-
war debts.
The assertion is true enough as re-
spects the element Of psychology. in
business. 1t is realized in Washington,
however, that the change could not
have occurred and cannot now go ahead
unless the fundamental factors are
right. 1t has been the belief in WASH
ington since before Junesl that the de-
structive forces of business disintegra-
ton had largely worked themselves out
and that conditions were right for the
beginning of recovery.
AS of about the lst of June there
were two principal conditions about
which those most responsible In WASH
ing on were vigilant. One was the state
OF farm crops in America. 1t was be-
lieved that, as respects America, every
other important condition was sound
and that if farm crops should turn
out to be good this condition would set
business recovery on its way. In short,
the expectation was that business in
general would watch the week-to-week
reports of the Department Of Agricul-
ture on the state of growing crops.
Recovery Predicted.
If the reports should show normal
progress until about Sep. ember, marked
business recovery, would be EVIDENT
about that time. Crop reports up-to-
date are favorable, and there Is no anx-
iety ebout that condition, although 1t is
impossible wholly to forget so recent an
experience as the drought that came in
the late Summer of last year.
The other condition. which has been
a matter of concern to Washington for
several weeks. was Central and EAST
ern Europe. 1t was realized that much
of the continuation Of financial depres-
sicn during April and May expressing
itself in the forced sale of securities
in New York, was directly due to bank
ing and economic difficulties in Austria,
Germany and some other countries OF
Eastern Europe. Banks in all these
countries. being forced to md money.
conducted liquidation that caused much
of Europe to throw the best American
securities on the market. In addition.
the menace Of revolution In Germany
had caused an increasingly urgent
fight Of capital from that country.
If. as seems to be the case. the I'M
mediate financial crisis in Germany, as
we'll as Austria. has been cured by the
action about poStponement OF oeoIS'
that one OF the causes OF uepresslol
in America will be ended.
Values Are Boosted.
One Of the principal reasons Tor con-
fidence in the lasting quality OF the rise
in business barometerS that occurred
last week is the fact that 1t is world
wide. Enormous values have been add
ed to commodities. crops and securities
in literally every country in Inc worlo.
In spite of all the evidence there Is
some apprehension in washington
about the sensational magnitude ano
extent of the rise The addition OF
nearly $4,000, 100000 to the value OF
crops commodities and securities in
America cannot be repeated week AFTER
week. At some point the rises In prices
must pause to wait for actual volume
of industrial activity to catch up. III
is realized also that there are some
real. even thought relatively minor, OBJ
stacles to be hurdled before business
can go on to high tide.
In any event the seven DAYS enoeo
AT 6 O'Clock Saturday night, which be-
gan with President Hoover's announce
ment the Saturday before. composed
remarkable week 1t probably JuStlf1es
even the excited assertions of Euro
peans that politically and internal
tionally it was the most important week
since the armistice.
'CopyriRht. 1917