Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-17
EUROPE'S BUSINESS
REFLECTS GENERAL
PESS|M|ST|C TONE
Fiscal Difficulties Cause
Concern in Germany
and England.
STOCK MARKETS EXPECT
POORER YEAR THAN 1880
Political Issues and League Ses-
sion Next Week Already
Being Felt.

Special Dispatch to The Star.
NEW YORK, May 16.-Cable dis
patches to The Business Week give the
following survey of business abroad for
the week ending May 16:
EurOpe.-BuSiness sentiment is be-
ginning to lose its confidence. Com
modities have manifested inability to
steady themselves. Stock markets have
Sagged appreciably except for technical
reaction in France. Fiscal difficulties
and the prospect of mex taxation, espe-
cially in England and Germany are
causing considerable concern. Disap-
pointing company reports continue to be
published. The collapse during the week
of the Austrian Creditanstalt, East Eu-
ropes biggest bank, is thought to be
due to special causes, but has caused
not little shock. Also many difficult
political issues are expected soon to
come to a head, including reparations,
war debt revision, and the question of
the Anschluss, which comes before the
league next week and which now is
given added emphasis by the Vienna
bank failure. The above, and other con-
siderations, have Slapped business vitality
and account for the disposition again
to take short and more pesSimistic
views.
Commodity weakness is largely ascrib-
able to maldistribution of stocks. Al
though supplies of nearly all raw ma
tertals are still excessive, despite the fact
production restriction schemes are be-
ginning to show some effect, stocks have
become congested in first hands where
they are conspicuously visible but where
they conceal virtually the complete ex-
haustton Of reserves normally carried by
consuming industries and the distribut-
ing trades. This condition is not vet
realized though it will probably prove
the pivot on which current conditions
will turn. Meanwhile bear speculation
is without constructive counterpart
Hesitancy of buyers to cover more than
immediate requirements, and the very
gradual, though actual, increase in con-
sumption has abnOrmally and unnatur-
ally narrowed depressed primary mar
kets. In the case of few products.
notably wool and wheat, prospects have
frightened.
Won't Exceed 1880 Earnings.
Stock markets are beginning to re-
nect the realization that, even were ex-
pected Fall improvement to materialize
the years earnings won't exceed. If
even equal, $780, the first half of which
was relatively active Bonds, however.
are somewhat stronger. Reduction of
the Federal Reserve discount rate has
GACEDL
Gnpeg and reduce British bill rates TO
5-16 per cent and temporarily to I'M
settle sterling. Nowhere, however, is any
immediate effect expected. II already
existing dtsparitteS in money rates have
tailed to move capital, it is obvious no
monetary causes are responsible. It is
generally conceded, in fact. that causes
are psychological, which further reduc-
tlon OF bank rates below already abnor-
mally low levels fail to remove.
Reduction, nevertheless, Is welcomed
as gesture of cooperation and also as
discouraging futile movements of gold
from one center Of excess, such as Paris,
70 another, such as New York, and as
facilitating much sooner ultimate CAPT.
tai read1uStment when international
confidence RECEIVERS.
Among miscellaneous DEVELOPMENTS.
March iron and steel production figures
are now available and show increases
throughout Europe. Iron increases-In
france, per cent; England, IL per
cent. Steel-France and England, 4 per
cent; Belgium and Luxembourg, per
cent. Initial April coal and iron ore
figures. however, indicate no further
Improvement.
Budget Effect Unsettled.
LondOn.-BusinesS is bad. That
much-vaunted recovery has failed to
mater1alize and with the budget out Of
the way there is nothing to blame but
the after effects. Actually these should
not be minimized too much. Business.
after several weeks of arguing, has not
reached clean-cut decision on the all
around results of the new budget. It
has decided that Chancellor Snowden
did verestimate-gT oSsly-the yield next
year from the income tax. This threat
OF heavier taxes a year from now is
rolling into SNOWFALL proportions in cur
rent discussions and the worry is
enough 10 retard business
The pessimisn which is taking the
place Of the confidence which persisted
the first three months Of the year is
without foundation. Cottons, it is true,
are drawing increasing inquiries, but
actual orders for early delivery are
small Rayon is doing we'll Wool is
quiet. Iron and steel activity is slack
entng. Nonferrous metals are at SKIES
and sevens again, with pig lead at new
all-time low.
Coal trading is better in many fields.
but the SotS pits are inactive, and many
collieries especially in Wales, report
they cannot find markets for their
cheaper grades.
Tendency Is Better.
Partisan eleyenth-hour change in
sentiment, which implies renewed con-
fidence IN Brands foreign policy
brought 7s-year-old Paul Doumer. re-
firing president Of the Senate. into the
presidency and supposedly leaves M
BRAND to administer foreign affairs in
the trying conferences which are inme-
diately ahead. Proponents Of ths
grand old statesman" of France look
on the result as a vote of confidence for
the efforts Of BRAND in the raSt, and in
his unique ability to handle the IN
volving problems Of the German Gus
toms union, credit relief for Central
Europe, and disarmament in the future
The direct effect on business will be
clearer after the League Of Nations
meeting gets under way next week and
affairs take definite trend. Certainly
French policy Is likely to undergo small
change as an immediate result of the
election.
In the meantime, the tendency to-
ward seasonal improvement has beer
maintained, but general conditions are
unchanged. Registered unemployment
declined for the third successive week
Car loadings have risen and are nov
less than / per cent below those of g
year ago. The stock market has recoy.
cred after an unbroken IL per cen
decline since n1id-February. Price in
nation probably reached the turning
point with the second week in May. In
dicies, then declined only slightly bu
affected every category except certain
I,1Hc~nnisva axrortn Anm Ma ara