Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-24
ECONOMIC OUTLOOK
BECOMES CLOUDED
German-Au Customs
Union and Wheat Develop
ment Disturb Situation.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, March 24.-Two new
developments served to compIcate an
already complex economic outlook over
the week end. One was the formation
by Germany and Austria Of a customs
union, and the other the announce
ment by the Farm Board Of its policy
with regard to supporting the wheat
market after the 1880 crop has been
It Is a little difficult for the average
observer on this side to understand the
alarm in France over the German
Austrian accomplishment. Looking at
the matter simply from the economic
standpoint it would seem to be q con-
structive move sure to benefit both par
ties and go far to restoring normal con-
ditions in Europe as whole. Certainly
1t is what the distinguished American
financiers urged five years ago When
they made their plea for the removal
of restrictions upon European trace
French Attitude UnfavOrabIe.
Nevertheless, the French reaction to
the news has been decidedly unfavor-
able. The dispatches even characterize
it as the "graVest" step taken by Ger
many since the signing of the Versailles
treaty. What is feared, of course, is the
reconstruction Of parable mid-Euro-
pean political unit under German
leadership.
It is revealing no secret to say that
the chief reason for encouragement as
to world trade recovery stressed in the
highest banking circles in New YORK
has been the improvement in the Euro
mean situation. Important buying OF
stocks has been based on this belle1,
and the same is true Of foreign dollar
bonds. The latter market should be the
more sensitive to any change In TINS
view and will be watched closely on
that account. =
The other matter, the announced oe-
cision of the Farm Board not 70 attempt
to maintain wheat prices beyond May
is heartily Endorsed in Wall street.
problem to which no acceptable solution
has been offered is the huge over
sIInplv of wheat and the Farm Boards
effort to hold up quota tons, taking over
the surplus as fast as it came to Market
Every other experiment OF TINS mature
by a government agency has ended IN
disaster, and the threat OF such disaster
has weighed down upon all the marKeGs
for months, securities and commoditles
alike. At any rate. we are now to have
a showdown, and even If the immediate
result is to bring prices for grains IN
the United States down to world party
at least the crisis will have been met.
Dollar Bond Outlook.
Curiously enough, these two events
came at a time when the markets most
concerned were en- the eve OF revival.
The foreign dollar bond outlook has
been so much improved in recent weeks
that new foreign offerings have been
planned Commodity pri ces nave
achieved a measure of sterilization. The
Fisher index this week is unchanged
from that of week ago. In Germany,
wholesale prices as of March IL were
114.3, against 1889 on March 4. The
decline in Italy has been halted and
indications from other parts OF the
world point in the same direction. 1t
is agricultural prices which have held
back the averages from advancing, and
therefore it is well that the wheat ques-
ton be settled as soon as possible.
CCopyright, 1917