Evening star., 1933-10-29
BUSINESS ABROAD
|. UNDER INFLUENCE
OF THREE FACTORS
Europe Generally Pleased
With U. S. 0vertures for
Soviet Recognition.
ROOSEVELT GOLD PLAN
ACCEPTED WITH CALM
Crisis Brought by French Govern.
ment Fall Expected to Be Met
Satisfactory.
Special Dispatch to The Star.

special Dispatch to The Star.
NEW YORK, October % (SpeciaD.
Gables and wireless dispatches to
Business Week give the following sur
vey OF business abroad for the week
ending today:
European News Bureau.-European
executives confined their attention to
JUST three developments this week: The
invitation from Washington to the
Soviet government to send represent
tatlve to discuss possibilities for renewal
OF diplomatic and trade relations; the
announcement Of President Roosevelt
that the United States would set the
price Tor gold, and at figure above the
prevailing world price, and the fall OF
the French government with possible
reactions on the French franc.
Diplomats Pleased.
Diplomatically, almost every one in
Europe was pleased with the Roosevelt
move to restore normal relations with
the Sovlets. 1t is generally considered
tnat Berlin will be profoundly inf1u-
enceo, VIII be less abrupt in dealing
Win MOSCOW and will perhaps even
make some efforts to patch I'D present
wounded feelings. Certainly. the situa-
uon In the Far East-which most Of
Europe considered as tense as the
German-created spasm in the Conti-
nent week ago-haS been altered by
tne prospect OF closer cooperation by
Moscow and Washington in all future
dealings with Toxic. And finally.
Russia-which is taking an increasing
part in the politics Of the Continent
and IN councils with European nations
Will gain In prestige If official rela-
tons with the United States are re-
stored because it is expected that the
Two nations will act in unison in uany
council chambers.
Commercially, the move for recoeni-
tlon by washington is less welcome.
Germany will suffer most. Soviet or
oers for German products have drop
peo. since Hitler came into power and
pushed his antt-continent campaign to
the point where only the absolutely
essential manufactures are bought
through Berlin, this despite the fact
that two years ago the bulk Of Russia's
foreign orders were placed in the Reich.
Britain has failed to reach new trade
agreement with the Soviets following
the rupture in relations at the time
British engineers were accused Of sabo-
tage and tried in Soviet courts. France
has recently renewed cordial relations
with Moscow. but all three of these
countries know that the United States
can secure the bulk of the Soviet busi-
ness II comparable credits are offered.
Ihls means. most executives contend.
that credits must run for at least four
years. possibly 10, and that very little
cash must be expected in payment in
the next two years unless large mar
ket for Soviet products is found In the
United States. Europe Is frankly dis
appointed at the prospect of losing a
lot of Soviet business.
Gold Pronouncement
After the first furry of excitement.
the Roosevelt gold pronouncement was
accepted win more calm. Dollars sag
ged until the first official Treasury price
ruling came from Washington Ex-
changes tended to rise on the expecta-
ton that successive statements from
Washington will increase rapidly the
number of dollars which will be paid for
gold.
The gold problem Is cause for much
concern because so few details are
known. The British expect that Roose-
velt plans to operate the gold purchase
plan as sort of equalization scheme,
using instead OF the foreign exchanges
which Britain has been in the habit of
ASA-O W ObN1a9 NAAC ROAAAAg 6Ol0
which the Treasury will purchase.
France cannot determine the course Of
the franc until 1t is known how extern
sively the United States will purchase
gold from abroad, if at all
The fall of the French government
was expected. The budget deficit has
reached the point where the problem
must be met by economies to bring a
return to equilibrium, or by mild in
fation which might accomplish the
same result. The economies have al
ready been rejected, with the result that
the Daladier government is out. There
is small group in France which ia
vors imitation, but there is a much
larger group which remember the last
80 per cent devaluation of the franc
less than 10 years ago. Most observers
expect a series Of governments which
will attempt TO solve the problem In
various ways. Ultimately, only a ma
tional emergency coalition Is expected
to be able to handle the situation with
su1cient determination to meet the
crisis.