Evening star., 1934-08-05
Politics and Hindenburg
Death Hold Interest
During Week.
TRADE PACTS LIKELY
TO HURT U. S. EXPORTS
Both German and French Mar
kets Recover Quickly From
Fears of Another War.
Special Dispatch to The Star.

NEW YORK, August 4.-CableS
and radio dispatches to Business
Week give the following survey of
business abroad for the week ending
today
BERLIN.-"Politics and the passing
of President Hindenburg held the first
interest this week, though economic
pressure is likely now TO force the
next significant move by Germany.
"The embargo on raw materials is
proving to be a handicap
to world recovery. The moratorium
has as yet failed to ease Germanys
financial position materially, so there
are no signs of an easing Of the re-
strictions on raw materials imports,
despite the pinch they are causing
some industries. The move is having
its repercussion on neighbors. The
French wool combing industry is prac-
tically at a standstill since the sus-
pension of German imports, and the
London wool auctions have reacted
seriously to the lack Of German buy
ing support.
THE Austrian affair caused only
Short-lived setback on the securities
market, but in spite of the belated
overtures from Berlin it
remains an international danger
point.
Despite the slackening of indus
trial activity, which, In the cotton
textile industry, has forced reduc-
ton in working hours, industrial
share prices continue to climb. Bonds,
however, are weak, due to currency
United States trade Is likely to
suffer further than was at first antici-
pated following the final agreement
Of Berlin with the French and Swiss
10 put their entire export trade to
Germany on compulsory clearing
basis instead of just sufficient por-
ton to cover interest charges on
Dawes and Young bonds. The agree
ments in both cases guarantee to
Germany an export surplus in keep
Ing with past trends, but they reduce
The sums likely to be available for
TO countries where the nor
NAL trade balance fails to provide
adequate foreign exchange for normal
Paris Confidence Low.
PARIS.-"French markets recovered
this week from the shock of the war
scare and the threat Of domestic
political crisis, both of which seem to
be successfully sidetracked for the
time being. There is q general lack
of confidence, however, which is re-
f1ected in the sluggish demand for
the new offering of treasury bonds,
despite the erroneous report In the
general press that they yield more
than 5 per cent.
THE seriousness of the German i'm
port embargoes is making deep i'm
preston on the French through the
complete, though probably temporary,
tie-up of the wool combing industry.
Following the general recession in in
dustrial activity and smaller export
the industrial public Is con-
cerned over the outlook. Exports OF
rayon yarn still show slight increase,
but it is not sufficient to counteract
the steadily slackening domestic
demand.
Evidence of the apparent futility
of government efforts to reduce the
national deficit by drastic
economies came to light with the an
that the deficit now ex-
ceeds $500 100000 francs, compared
to an estimated deficit of only 4,500,-
600 900. Economies expected to re-
suit from salary reductions and ad-
reforms have not been
realized, and public resentment has
been SO vigorous it is not likely that
the country will be able to accomplish
much more in this direction"
British Study LulI.
LONDON.-"Is it a Summer lull. or
has recovery really halted? Has the
heat wave taken the energy out of
industry and business or has the re-
placement demand of 1933-34 dried
up9 The official figures can be used
to prove the case either way. 1t Is
certain, however, that as far as Lon
don represents England, there Is not
the zest In affairs that there was a
month or so ago, and that for the
present hesitancy there is not the
excuse of a dramatic continent.
"One thing that is playing a part
in the lack of drive is the new fear
that something drastic may happen
to gold shares. All these markets
look overvalued-South African, West
African and Australian-and If by
chance the present trouble between
the various interests in the East Rand
causes an outflow from gold shares
the reactions on the stock exchange
may be unpleasant. To support the
market there would be liquidation of
industrial and a general disturbance
Of investment confidence. At the
moment this is cloud on the horizon
no bigger than a mans hand, but
it may grow. 1t is a factor.
Again, what is to be the future Of
currencies? Lombard Street smells
trouble. Opinion Is divided still upon
whether the gold bloc can stay on
the metal. Nobody doubts the in
tention, but many people doubt
whether intention is enough. It
wasn't in Britain's own case. The
factors, visible and invisible, are con-
anH fha voe1,YS fe i,,%