Evening star., 1934-08-26
Each New Monetary Change
Regarded as Threat to
Gold Standard.
BELGIAN BANK PLAN
BELIEVED INFLATIONARY
French Fear Brussels Program
Will Overload Central System
With Non-Liquid Assets.

NEW YORK, August 25.-Cables
and radio dispatches to Business Week
give the following survey of business
abroad for the week ending today:
PARIS.-"Silver naturalization in
America, dropping the dollar against
the franc; a stepping aside of the
British equalization fund to allow the
pound to sink further against gold
currencies, gave Paris a new case of
jitters. The inner meaning of ex-
change movements is still hidden, but
France sees each fresh monetary
change as a threat to force her of
the gold standard.
Paris is concerned over the lack
Of liquidity of the Belgian banks as
revealed by the government plan.
This provides that, after segregation
of commercial from investment bank
ing, a transfer of slow commercial
credits shall be achieved by having
the banks guarantee AZ per cent in
terest to a special corporation which
will deliver in exchange 3 per cent
government-guarante bonds accept
able as collateral by the national
bank. This IA per cent interest
spread Is held sufficient to amortize
half the principal in 20 years.
The plan Is criticized here as in
f1ationary and as tending to eventual
overlooking of the central bank with
non-liquid assets, endangering the
Belgian franc.
The Belgians hold, however, that
this new national company for in
dustrial credit program will both give
relief to debts and allow the national
company to set up reserve to cover
losses on bad debts-or, as stated, to
amortize the whole with assurance of
success. The hope is that confidence
will be restored and the immense
sums of money now boarded will be
tempted out into productive invest
ment. The set-up is compared here
to the r. F. c. in the United States"
Reich Vote Anticipated.
BERLIN-"Business shows indiffer-
ence to Sundays plebiscite. The re-
suit had been anticipated and dis
counted. However, it is realized that
official disappointment over the in
crease in the percentage of opposi-
ton votes may lead to heavier dicta-
torial pressure. Contrary to seasonal
trends, July imports we're down 3 per
cent, due chiefly to restrictions re-
sulting in an IL per cent drop in raw
materials. The shift of trade from
direct overseas imports to imports
from European countries with clear
ing agreements is increasingly mani
fest. New restrictions on the domes-
tic use of imported metals are taken
as indicative of the governments
resolution to pursue its policy of
throttling imports.
The orders follow closely the
methods of wartime curtailment Of
the use of metal. Copper and nickel
may not be used in house fittings and
copper is also held back from use in
many varieties of wire and cables. as
heavy imports of that metal were
serious factor in building up Ger
many's present high import balance
and cutting down foreign exchange.
THE foreign exchange tangle is
immensely serious in the German sit
uation today. Unpaid commercial
debts now pass 100,000,0 900 reichs-
marks, and an increasing number of
exporters to Germany demand cash
DR.. Schscht is stimulating discussion
of ways Of increasing exports, in the
face Of dwindling exchange supply,
and bases his hopes of acceptance of
such plans on the fact that exports
take only 10 per cent of German pro-
duction and that the restrictions on
the use Of imported materials have
never affected the export industries,
which can continue to use imported
materials which they re-export."
British Exports Gain.
Britain's 'unfavorable
trade balance in July was clipped, as
compared with July of last year, by
over f4,000,000, July exports rising
10.9 per cent to f33,200,O0O and i'm
ports rising 8 per cent to $4,000, ,000
Exports OF manufactures increased 81
per cent. Chief increase in imports
was in lumber-f1, 100000 But the
adverse trade balance Is the lowest
since July, 1888. which, however, fell
only about f1000,0O0 below the cur
rent figure. Trade with India made
a gratifying jump from f4,4O0 900 to
f5,500,000
The railroads are resuming their
discussions regarding the creation of
new conciliation machinery following
the wage settlement. The relations
between the men and the executives
are described by participants as cor
dial. The railways are stepping into
the transport situation with optimism
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