Evening star., 1934-11-18
France Prepares to Tackle
Budget, With Attempt
to Balance 1t.
ATTITUDE OF BRITISH
ON GOLD is CHAN GING
Barter Order of Day in Germany,
With Large Deal Pending
With U. S.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. November 17.-Cable7
and wireless dispatches to Busine'
Week give the following survey Il
business abroad for the week ende
today:
PARIS (Wireless) France passed
through a major political crisis thii
week with only a modest business
furry. So promptly did the new
prime minister, energetic and COM
paratively young, NJ Flandin form hii
cabinet and announce his program
that members of the opposition had
no time to make move. Paris, re-
viewing the situation through the
Chamber of Deputies first vote OF
confidence in the new leadership, de-
cided it was good, that it might be
expected to remain in Office until
after the Saar plebiscite in mid-Janu-
ary.
On five points the plans Of the
practical M. Flandin are reassuring
to business. He will first tackle the
budget and will attempt to balance it.
In view of the announcement that
tax receipts in the first nine months Of
the fiscal year are running 2,700 million
francs behind estimates, this will be
no small task. To stimulate business,
the new prime minister promises to
reduce interest rates. help the farmer
recover his purchasing power, loosen
trade barriers, threaten industry with
fewer attempts at governmental regu-
lation.
Important Developments.
Though business is stagnated by
the political uncertainties which have
persisted for more than a month, de-
velopments of importance are taking
place. The great Citroen works is
likely to pass from the control of the
founder to creditors anC to the gov
ernment. Equipped with the most
modern Neutrality-suspicious. of it pur-
chased as recently as this year in the
United States-the plant is of mill
tary importance to the government
as we'll as a vital cog in the countrys
industrial set-up.
Depression has also hit the French
steel industry and Is likely soon to
cause a thorough reorganization
which will eliminate the present un-
economic set-up and cut costs. AS
in England, part of the pressure
behind the naturalization is coming
from the banks to which steel COM
panies are in debt more than $780,
100000.
Iron and Steel Outlook.
Frances iron and steel industry
has points of striking strength as
we'll as weakness. 1t is united in a
great association, the Comite des
Forges, which directs the policy Of
the entire industry, much as the code
authority in the United States. With
in this organization there are II spe-
cial divisions, according to products.
Each division distributes orders
among its members and fixes prices.
When foreign orders are obtained.
the representative of the French in
dustry reports to the international
steel cartel any part of the order
which must go abroad in order to
keep the French industry within its
export quota. Thanks to this very
strong industrial organization, prices
have been comparatively well main
tanned in the industry.
1t is in plant organization that the
industry is weak. Mergers and con-
solidations have brought together
widely separated units. If plants could
be redistributed according to location,
it would cut costs materially. This
is the line which first naturalization
moves will take, and some start in this
direction can be expected soon.
Gold Opinion Changing.
LONDON.-British opinion in the
highest quarters is beginning to
change as to the endurance of the
gold bloc. 1t is now felt that the
danger of a fall-off is less than was
suspected just after the Brussels
meeting of all the countries concerned
France, Belgium, Holland, SwitZer-
land, Italy and PolanO. There is also
growing the view that despite the
Paris pact of 1888 and the Brussels
meeting the fate of the gold countries
is by no means linked. If France goes
off, all will go. But if Belgium goes
of. the others will stay on.
Business confidence is not yet deeply
enough rooted to stir any great inter-
est in industrial shares. Gilt-edged
securities are in great demand, and
government funds have reached new
highs. New issues continue to flow,
with good public response.
Barter Coming to Fore.
BERLIN.-Barter is the order of the
day in Germany. Hungary. Poland,
Chile, South Africa. Brazil-all have
negotiated deals with Berlin. But the
largest deal of all is pending-the
purchase of 100000 bales of raw cot
ton from the United States against
any kind of German goods the United
States is willing to take.
At first glance, the situation looks
hopeless. Beyond a few optical prod
ucts, some dyes, a certain number OF
chemical products and some special
instruments, Germany has little to
offer which will not compete with the
United States. The fact that Ger
many is dependent on outside supplies
of raw cotton counts for little because
Germans have already declared that
they can supply all next years needs
in other markets If necessary. While
this is perhaps exaggerated, it is true
that much more raw cotton has been
purchased in other countries this year
and that the proportions can probably
be increased in another year. AS in
recent deals. the prospect for the
United States is not good.
One of Germany's best foreign Gus.
toners three years ago was the Soviet
Union. Sales of German machinery
and manufactured goods to the Rus
slams reached tremendous volume un-
der the Germany system (until the
Nazis came to power) of stimulating
| exports with government export credit
guarantees.