Evening star., 1932-05-01
CHEAP MONEY ERA
EXPECTED TO HELP
/. FOREIGN BUSINESS
Bank Rate Reductions Dur
ing Week Designed as Trade
Stimulus.
DECLINE IN PRODUCTION
INCREASES IN GERMANY
French Concerned ever Drop in
Rail Receipts and Poor Ex-
port Business.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, April 3O.-Cable and
radlo dispatches to the Business Week
give the following survey of business
abroad for the week ending today:
LondOn.-London has been influenced
only mildly by developments. significant
as they have been. The cut in the bank
rate to 8 per cent had been discounted
Ior some weeks and had small imme-
olate erect. 1t concluSively marks the
END OF the crisis, inaugurates a period
OF really cheap money, though even at
this new rate it is ineffective so long as
market rates continue a full l per cent
below 1t. Investors anticipate a further
cut IN preparation for the long-awaited
conversion operations which the gov
ernment is now likely to urge as an
economy measure
The India loan Of 10000 900 pounds
sterling, while it checked the recent ad-
vance in Indian securities, was taken
up in little more than an hour, indicat-
ing the sustained interest of the invest
ing public in high-gr issues. IN
dustTlal stocks were quiet though
slightly f1rmer
German Employment Gains.
The drain on sterling, due to heavy
selling by the French, only accentuates
the necessity for prompt carrying out
Of the new government proposition to
utilize 150,00o,000 pounds sterling to
carry on foreign exchange operations
in order to prevent such drastic fluctua-
tions of the pound.
Beriin.-The most significant devel-
opment of the week was the reduction
of the discount rate to per cent, the
first time it has touched this low level
since the panic last Summer.
Unemployment declined 100000 dur
ing the first half Of April and is now
nearly 100000 below the mid March
level, but this is so far below the nor
NAL Spring pickup it has offered small
comfort either to industry or to the
government.
The decline Of production in the basic
industries continues unabated. In
March pig iron output fell further by
IL per cent and steel production by 2.9
per cent, both compared with the pre-
ceding month.
Sales of electric current also con-
tfnued their decline, with February fig
ures IA per cent off those for the cor
responding month in 1881.
There is in Germany at least one in
dustry which is experiencing a regular
boom. That is the bicycle industry,
where dealers stocks are cleared and
fresh demand is brisk One of the ex-
plantations offered is that those who
used to buy automobiles are now buying
bicycles.
The situation in industry is grim and
the outlook gloomy.
Paris.-A thin crust of seasonal re-
covery is hiding true conditions in
French industry. The lighter indus
tries last week continued to absorb
small numbers of workers, and a squirt
of business in the consumer trades
promises to continue the trend for a
time
The competent Frenchman. however,
is watching other factors as we'll Rail
receipts, up Sporadically a few weeks
ago, are again of. Foreign trade is
very unsatisfactory. Exports are down,
and declining further; imports, despite
all the quotas, have failed to contract
proportiOnately Government revenues,
which have been falling gradually, are
now falling away at an alarming rate.
The March sales tax return, which can
be taken as a fair index, was % per
cent below the total for last year. In
ternal prices are rising
Perhaps the most encouraging devel-
opment of the week was the prompt re-
sponse of the public to the Land Bank
issue of $66,000,O00.