Evening star., 1934-02-18
Business Tone Still Good,
but Trade Race With
France Is Feared.
SPREAD OF INITIATION
LIKELY TO HURT FRANC
Prague Currency Move Raises
Possibility Of Other Danube
States Following.
Special Dispatch to The Star.


and wireless dispatches to Business
Week give the following survey of
business abroad for the week ending
today:
LONDON.-The business tone still Is
good in Britain, though executives are
perturbed by developments In France
and Austria, and by the prevailing
uncertainty over the effect Of the
movement of f45 zoo. 900 in gold to
the United States.
The political crisis in Paris had
scarcely been calmed when London
received reply from the new gov
ernment to the ultimatum on quotas.
France Is proving just as stubborn
as Britain and has given notice that
the existing trade treaties-one dat
ing back as far as 1526-wiu be can
celed at the end Of the required
three months notice. While France
believes 1t is . normal point from
which to start new trade talks in
line with conditions as they are today,
Britain fears that serious trade war
Is imminent.
Balance sheets Of retail stores con-
firm the impression that there is a
distinct revival in retail trade. Rail-
ways are reporting better earnings.
The Southor Railway is paying 2 per
cent more than last year in dividends
and the London Midland & Scottish
had previously reported higher divi-
dend this year. The other two groups
of England's big 4" are expected to
S&x,fSev,Ac ernn
Paris Bourse Steady.
PARIS.-The Bourse held up re-
markably well last week, considering
the seriousness of the political dis
orders. Rentes regained to 8 per
cent ON the announcement Of the
formation Of government under M.
Doumergue. Francs recovered this
week, dollar premiums dropping
quickly. The gold point Is now calcu-
lated In Paris to be l5.l2 and the cur
rent rate Of franc-dollar exchange Is
about 1882. Despite this disparity.
there have been few demands for gold
this week, owing to the uncertainties
which may enter the picture before
space can be booked for shipment
abroad. The Bank of France has
raised the discount rate twice In the
last two weeks.
Decision by the Czechoslovakian gov
eminent to devalue the crown is re-
garded in Paris as having no bearing
on the position Of the franc, since
Czechoslovakia has long been practi-
cally Oh the gold standard and has
never been . member of the gold bloc
Nevertheless, there Is some concern
over the prospect Of other Of the
Danubian states taking similar action,
which means that French exporters
viii be faced with q larger group of
exporters whose competitive position
has been improved by the devaluation
of their curTencies.
More immediate threat to foreign
trade Is the mutual denunciation of
trade agreements between Paris and
London. The French market Is
scarcely less important to the British
than the British market is to the
French, but France is inclined to be-
lieve that the time has come for q
complete revamping Of trade agree
ments and that cancellation Of exist
ing pacts simply clears the slate for
an entire new deal. If complications
should develop it would seriously affect
the business Of both countries.
France is not yet talking devalu-
alton, but the worsening foreign trade
position, the budget deficit and the
growing number of devalued currencies
makes the position of the franc in
creasingly questionable.
Prague Imitation Feared.
BERLIN.-Surrounded by political
developments Of the first magnitude,
but wary Of commenting publicly on
them, Germans turned attention to
more comronplace developments in
domestic business.
repercussions Of the country's policy
Of extreme nationalism and the curbs
Of various neighbors, were shocked by
the announcement from Prague that
the Czechoslovkian currency would
be devalued. They foresee the Polish
zloty following . similar policy and
the possibility that other states in the
Danube basin will be forced to take
similar measures.
Glass and textile manufacturers are
most worried. When exchanges were
on their old bases German products
met still competition from these
lneighbors In competing markets.
Fortified by devalued currencies. Ger
mans see more markets lost to their
neighbors. Germans still refuse TO
consider -devaluation Of the mark.
The unseasonsl decline In the num-
ber Of jobless. In January (nearly
2e5, ,0OO) was due equally to govern
mental measures providing work and
to . spontaneous Improvement In
business.
Foreigners expressed some interest
in the officially released figure of 7s1,-
000, 900 marks as the total Of German
bonds which have been repatrlated at
deprecated values. None doubted that
this was the minimum figure, though
there were no statistics available to
prove their point.