Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-18
POLITICAL FACTORS
CONTINUE TO SWAY
. FOREIGN BUSINESS
Increased boarding of Money
Follows Uncertainty in Gov
eminent Circles.
GERMAN LOAN RENEWAL
is CONSTRUCTIVE MOVE
French Continue in Belief That
Dollar Exchange Is in DAN
ger of Collapse.
Special Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, October 17.-Cable and
radio dispatches to the Business Week
give the following survey Of business
abroad for the week ending October II:
Europe.-The business situation is
characterized ID by the political crises
which are coming to head in England
and Germany: 90 by the continued
liquidation of international credits and
the expansion Of domestic boarding,
and 80 by rising prices on London
commodity markets on specific news
reports, regardless of financial end po-
Htlcal uncertainties.
Throughout Europe increasing cur
rency boarding is reflected in the ex-
panslon OF currency circulations and in
higher rediscount rates Gold with
drawals from the United States con-
tnue, attended by some redistribution
via Paris TO other countries DR.. Bur
CESS explanation that the United States
Is in strong monetary position, and
that the Hoover credit plan Is nom
inf1ationist in Observation-Disclosures
throughout Eurcpe-has tended to allay
prevalent misconceptions causing un-
easiness, except in France.
Renewal of German Loan
The most notable financial develop
ment is the three month renewal by
central banks of last August's S1O0, 0O0.-
600 joint credit to Germany, and like
wise the 100000 credit to Yugo-
slavia; also the Bank for International
Settlements and the Bank of England's
credit to Austria (S13,000,000 and s14.-
100000. respectively, still outstanding,
are now reported merged in the single
Joint credit of the Bank for Interna-
tional Settlements, with leading central
banks participating, thus permitting the
hard-pressed Bank of England TO re-
cover part of its stake. The Austrian
finance minister is in Paris negotiating
for the urgently needed Austrian lean,
which probably will involve the merging
Of the four largest Vienna banks under
French sponsorship. The Bank for In
ternational Settlements is calling o
meeting of the countries controlling for
eign exchange operations in order to
unity practices and relieve various i'm
pediments to trade
The fate OF the Bruening government
hangs in the balance as the Reichstag
reconvenes. Whereas Bruening's posi-
ton until row was looked upon as al
most hopeless. it is now felt he has
fighting chance to win, following his
powerful address and the announce
ment of definite program at the
opening Of the Reichstag.
London.-Election possibilities are
holding the attention of business, but
not to the exclusion of numerous hope
full signs that there has been distinct
trade revival in recent weeks.
Cotton and wooden mills, iron and
steel furnaces, and coal mines are
working at full blast in several parts of
the country anticipating the revival eX
pected to follow suspension of the gold
standard and reflected in last weeks
sharp drop of $4,000 in the unemploy
ment total.
The short-term loan market is COM
Portable with discount rates firm. The
increase in the Federal Reserve and
Bank of France discount rates was not
felt in London. Sterling has hardened.
Foreign trade figures for September
show an increase in imports-primarily
of foodStuffS and manufactures in an
ticipation that tariffs will be inaug,l-
rated in late October and of raw ma
terialS due to the mild export boom
under way. Because the export re-
vival scarcely got under way until Oc-
tober, the September figures were only
slightly above August
The general tone is good with op-
timism subdued only by election un-
certainties.
Recession in Germany.
Berlin.-An extremely critical politi-
cal situation, after the prolonged par
l1amentary holiday again overshadoWs
current business developments Bruen-
1ngs failure to form a representative
National cabinet and secure the CO.
operation of prominent business lead
ers Is largely due to the intrigues of
big industry, which has lost faith in
Rr1lan1nU I'll
over the absence in. the latest emer-
gency decree of provisions loosening
the rigid wage structure of German in
dustry
Industrial activities are marked bv
uniform recession. Cotton spinning
and weaving industries are increasingly
complaining of the effect of fresh Brit
ish competition. Machine building in
the third quarter showed orders 10 per
cent of when compared with the sec
ono quarter and 80 per cent below last
year. Plants are now working at only
~ per cent OF capacity, compared with
So per cent last year. The whole in
dustry is saved from wholesale shut
down only by the volume of foreign
orders, now reported to make up near
ly tWo-thirdS of total business
Parls.-PeSSlmlSm, nervousness and
fear characterize French business senti-
ment, though the peak seems to have
passed. The weeks Developments in
the United States, England ana Ger
many all contributed. France believes
and foresees a financial panic in the
United States. foresees Conservative
elections in England followed by tariffs
which will paralyze already dWindlir1
French exports. foresees emerging from
the present German chaos a national
iStic government which will stand for
reputation of Versailles and the end
| Of reparatioEs.
Notwithstanding explanations by
| American bankers that the dollar is
thoroughly secured, the French con-
tinue to be obsessed that bank collapses
| and financial panic are imminent in
New York, provoking the collapse of
dollar exchange. A lack of confidence
is placed in Hoover's credit expansion
program, which is still viewed as an
| inflationist step. According to the best
French opinion, credit imitation is the
| underlying cause of the depression, and
def1ation or elimination Of rotten as
sets, not their perpetuation bv fresh
/ imitation is the remedy and the way
out. Either way collapse of New
York banks, especially those involved in
Germany, is thought unpreventable.