Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-13
FOREIGN ECONOMIC
SITUATION CLOUDED
BY STOCK SLUMPS
Freezing of Alien Credits in
Germany Affects Many
Banks.
SELLING OF SECURITIES
ON BROAD SCALE NOTED
Increase in European Unemploy-
ment Is Disturbing Factor in
Business Outlook.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, September l2.-cable
and radio dispatches to The Business
Week give the following survey of bust
ness abroad for the week ending Sep
TENDER IL:
Europe.-Business in Europe, as In
the United States, still fails to show
any seasonal improvement except in
those industries manufacturing con-
sumabies and even in these improve
ments is limited.
The week has been characterized bv
stock market slumps, especially in the
secondary markets such as Zurich
Stockholm, Amsterdam, and Milan.
This is attributable to two primary
causes. Local values in these centers
have been supported at disproporticn-
atsly high levels by the presence Of
refugee foreign capital. In the sec
ond place, and more fundamental, the
freezing Of foreign credits in Germany
has set up throughout Europe an ef-
fort by affected foreign banks to re-
cover their original liquidity by security
sales whose proceeds should offset the
absence Of funds imprisoned in Ger
many. To this have been added sales
by German banks of their foreign hold
mgs in order to mobilize foreign ex-
change
Banks Condition.
The condition Of banks in secondary
centers, however, appear to be rela-
lively strong and no runs are expected.
Sweden, to forestall any run on her
currency comparable to the run IN
Great Britain. is expected shortly 70
launch $4,000 900 foreign loan to
Offset the reparation of foreign
deposits occasioned by the reasons given
above. Repatriaticns now are virtually
completed.
Also notable in Giuseppe this week Is
the widespread renewed increase in
unemployment, with attendant compli-
cations. A whole series of countries
are proposing public works programs
to alleviate unemployment but the
prevalence of budgetary deficits fails
to allow the necessary funds. and
everywhere the approaching Winter Is
viewed with grave concern.
London.-The tension pending the
announcement of the governments
economy plans has kept business in a
state of worry and inactivity. The
general outlook is not encouraging. In
evitably buying activity will be cur
tailed as a natural reaction to the new
economy program, and lingering hopes
that business might recover this Fall
are waning.
The relief which came to business
with the appointment of a coalition
government has been shortlived be-
cause of the mounting opposition CT
labor acting through the Trade Unions
Congress. and of the growing insistence
on an election at the earliest possible
date. Though neither may delay
seriously moves by the coalition to leg
islate and carry out extensive econo-
mics, there is little prospect Of busi-
MSS revival till elections, whenever they
may be fought. assure the defeat Of
socialism and afford some concrete def
milton of tariffs prospects.
Business Reported Slow.
All lines are slack. Business in cotton
goods at Manchester has been slow.
with buying very cautiously approached,
owing to uncertainty with regard to the
future course of values. Bids from In
dia have been too 10 wfor acceptance.
Fair quantities of dyeing materials have
been taken by South America.
Berlin.-The relative. though artifi-
cial, equilibrium of the financial struc-
ture which was established in recent
months is being maintained with in
creasing difficulty because business is
that there will be new
setback in the near future. Though
stabilized. the lack of
liquidity of the banks makes 1t unlikely
that they can Withstand many new
blows from outside or from within with
the foreign exchange situation particu-
larry strained.
Although the momentous events since
the outbreak of the financial crisis have
devitaliZed the customs union issue. in
dependently of the adverse Hague Court
ruling and formal surrender at Geneva,
it is acknowledged by pub
lie opinion as a national humiliation
and a symbol Of the establishment VI
French financial predominance IN Aus
tria and Hungary, thus indefinitely
adjourning German plans for economic
of DR.. Curtius, foreign
minister, is claimed by all shades OF
political opinion. though 1t is unlikely
to become effective before the visit OF
French government oficials at the end
OF September.
Paris.-Business conditions slowly are
developing a more pesSimistic trend.
July iron and steel production figures
confirm previous reports that the
industry chiefly Is af-
ected by the depression. July figures.
which usually show a decided seasonal
increase over the previous month. this
year are reversed. Pig iron totaled
$50 900 tons; steel. $4,000 tons, are.
respectively, Is per cent and 81 per
cent below last years record.
Profits Smaller.
Annual returns of large companies
showed a great diminution of profits.
Alsthom. the largest electrical equip
ment manufacturer. showed profits %
per cent below last year. passed its
dividend; Lille Bonnieres, leading inde-
pendent petroleum company, reports
so per cent loss of profits. Various
Woodworking industries also report
dif6cult conditions, particularly ma
chinery and automobiles. international
competition in the latter apparently IS
undated by the depression, instanced
by Italian Flats plans TO open an as
sembly plant near Paris, and Citroen's
decision to do likewise in Italy. Reports
are current that leading automobile in
terests are now advocating international
ententes with the view of eliminating
such uneconomic developments in the
future by limiting various markets to
industries best placed to insure supply.
POTATO MARKET.