Evening star., 1933-10-08
REICH CLEARS PATH
FOR MUCH-NEEDED
CREDIT EXPANSION
Flow of Capital ParaIyzed
and High Interest Rates
Bar New Bonds.
OPEN MARKET POLICY
AS IN U. S. ADVOCATED
British Cheered by Treasury Show.
ing While Budget Issues Hold
Attention in Paris.
Special Dispatch to The Star.

special Dispatch to The Star.
NEW YORK, October 7-Cables and
wireless dispatches to Business Week
give the following survey of business
abroad for the week ending today:
BERLIN-1n contrast to the recove.y
program Of the Roosevelt Administra-
ton, the Nazi government. like its pre-
any measure that could be interpreted
either at home or abroad, ash imitation
or even credit expansion.
Yet 1t has been increasingly realized
lately that any major business recovery
is dependent on the resumption of its
normal functions by the capital mar
ket. In contrast to a relatively easy
money market Though rates are still
high compared with those ruling In
London and Paris, the capital market
is still paralyzed and high interest
charges prevent new bond issues, both
public and private
It is therefore considered necessary to
attempt TRANSMISSION" from the COM
paratively liquid money market into
the stagnant capital market which
could best be attained If the Reichs-
bank would carry through the open
market policy successfully pursued for
some time in the United States and
England but up to the present tabooed
in Germany owing to the extremely
conservative attitude of the Reichs-
bank.
This change of policy will require a
change of the statutes Of the Reichs-
bank which IS now not permitted to
buy securities of its own account lex
cept to satisfy immediate requirements
Of its customersD Failing ratification
Of the Lausanne reparation agreements,
any amendment of the Reichsbank
statutes still require the approval OF
the Bank for International Settlements,
which has already been requested by
the Reichsbank It is believed that the
assent of the B. l. S. will be granted
without further difficulties at the Octo-
ber session of its council.
London is Hopeful.
LONDON There is still considerable
optimism IN London over the business
outlook. Perhaps the favorable report
on the condition of the national treas
ury this week did more than any other
one thing to encourage public interest
Government income increased f7.2 mil
lions during the first half of the fiscal
year and expenditures were down f48
millions, with the saving on debt
charges through the conversion opera
tions, nearly $50 millions.
Outstanding items on the revenue
side of the ledger were the f69 mill
lions increase in revenue from tariffs
contrasted to an estimated increase
OF only s730,000. Death duties also
yielded unexpectedly large income
totaling s5.2 millions. AS result OF
the favorable treasury report. govern
ment bonds were firm during the week
The slum- m-clearance campaign is 60
ing forward-but far too politely
England has no Gen. johnson. Sir
Hilton Young, minister of health. has
commandeered the old bill boards of
the Empire Marketing Beard and these
now plead with the local communities
to clear their slums. But there are no
vigorous drives. Public opinion, how
ever, Is strong and vigorous campaign
may yet develop under government
direction.
On the Stock Exchange. government
bonds and home industrialS were firm
with motors and rubber shares the fea-
ture. Gold was quoted at new high
tagging behind the industrial pickup.
aug SAPOA eo "SAS SAASSeAN0AAAo'
French Watch Budget.
PARIS.-Public interest all week pre-
tended to be primarily interested in the
fluctuations on the foreign exchange
market and in the beginning of the
discussions in Washington between
British ond American war debt negotia-
tors. Actually, there is only one
economic interest in France these days:
The precarious position of the budget.
The government has admitted that
the national budget deficit this year
will run to about 1858 millions. Priv
ate estimates in usually well-informed
quarters, however, say 1t may run as
high as $475 millions.
The Daladier government has init
mated that it will propose to Parlia-
ment when it reconvenes in the near
future that new taxation be levied
which will meet half the admitted
deficit and that new economies make
up the balance. Civil service employees
are likely to be asked to take salary
cut, and veterans are certain to be
chalked up for a heavy saving in re-
duced pensions. Tax increases are ex-
pected to include new surtax on gaso-
line, a tax on dividends at the source,
and a tax on gas and electric COM
DanieS