Evening star., 1932-02-28
FOREIGN BUSINESS
ISHAND|CAPPEDBI
FAR EAST FIGHTING
HoStiIitieS at Shanghai Are
Causing Concern in Trade
CenterS.
REDISC0UNT RATE CUT
PROVES HELP IN BRITAIN
French Conditions Serious-Ger-
many Makes Test of Trend BY
Reopening Exchange.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, February 27-Cable
and radio dispatches to the Business
Week give the following survey of busi-
ness abroad for the week ending todav:
Far East-Japans temporary mill
tary reverses in the Far East and the
increasingly delicate situation on both
! sides make the whole prospect in the
Far East-both political and economic
more unfavorable.
Business at Shanghai is not at a
Standstill, but the volume is seriously
curtailed, with its effects felt through
out the Yangtze Valley. In the Tien-
tsin-Peiping area there is the lack Of
buying of japanese goods, but other
! wise business Is moving more or less
normally.
What business effects Japan's hurry
up move to set up new independent"
government in Manchuria will have
cannot yet be determined
Political Factors.
At home the Japanese situation is
bad. In the elections the Seiyukai or
government, party carried a good ma
jority, but the unfavorable reports
from the Shanghai front. plus the
mounting realization that Japan IS now
involved in a major crisis with world
AdfOl llAlk dkdlLloI 1ldS
rumor5 that the Seiyukai will ask for
coalition cabinet in order to have
maximum national backing for policies
as they are made. If this plan is car
ried out, it is probable that former
Premier Wakatsuki will be one Of the
important members of the opposition
| to be drafted into the coalition cabinet.
Standardization of the rediscount
rate by full 1 per cent, instead of the
usual y per cent, is already having a
| stimulating effect on industry, has en-
! couraged more extensive trading in gilt
edges, and IS generally being accepted
as an official confession that Britain's
actual financial crisis has ended Ex-
| change restrictions will be removed
| any day, and this is expected to aug
| ment already growing optimism. The
| Bank of England and the treasury evi-
| IDENTIFY regard the unfavorable balance
| of trade as less menacing than they
did previously.
| London is becoming increasingly
concerned over hostilities at Shanghai.
Not q few authorities are speculating
on the effect. treaty commitments may
have on Britain. Opinion quite widely
favors the prospect Of joint action by
| Britain and America, in cooperation
/ with the League, in. bringing economic
! pressure to bear on Toxic.
The public is definitely "anti-war,"
| but it is suspected that certain states
men are ready to approve hostilitieS
because they see in this move one way
of postponing the yellow threat" to
Pacific dominions, and at that time the
transfer of Canada and Australia from
the empire to a parliamentary white
group" to combat the threat.
Paris Bourse Higher.
1t is their contention that a Sino-
Japanese war now would so completely
| exhaust both powers that it would
greatly retard further chauvinism.
Business men are frankly baff1ed over
! the immediate outcome for Britain.
| Paris.-The BourSe, notwithstanding
40 per cent climb from December
| lows, and in spite of the manifest de-
| terioration of local economic conditions,
| is still buoyant. Except for very slight
revival in textiles, all other industries
are operating on hand-to-mouth basis.
| The increase in unemployment shows
| no sign of Slackening. January revenues
are significantly below December. Fiscal
| conditions are now definitely expected
to become acute before the year end
Berlin.-The outstanding event of the
German business week is the carrying
out of the long postponed bank reor-
ganiZation. Actually it is the paying of
F, the bill-nearly $4,000 ,O00-which
| Germans must foot for the liquidation
Of the bank crisis last July. But just
as truly it Is a gallant effort TO make
fresh start toward restoring public
| confidence, and putting the country'S
| largest banks on a firm basis.
The easier tone on the money market,
with the private discount per cent
below the official bank rate, stimulates.
and to a certain extent justifies. the
| demands of business that the Reichs
Bank follow the lead of the Bank Of
England and cut the bank rate, but the
uncertain political outlook and exchange
situation support the Relchs Banks
opposition.
Decision to reopen the Berlin Stock
Exchange premises, which have been
closed since last September, is a tenta-
tive test step in the trend back to
normalization. Official quotations will
not at first be allowed, and publication
of prices is prohibited. The government
will follow prices closely before agreeing
to full return to normal trading.
POUND STERLING GAINS.