Evening star., 1935-06-16
BRITAIN IS CALM
IN CABINET SHIFT;
RAIL PLANS HAILED
5-Year Electrification Work
Would Require $175,-
100000 Spending.
DISPUTES STRENGTHEN
COALITION GOVERNMENT
Franc Again Comparatively Safe,
but French Eagerly Await
Lower Discount Rate.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, June 15.-Cables and
radio dispatches to Business Week give
the following survey of business abroad
for the week ending today.
LONDON.-"Britain changed cabi-
nets last week without a ripple. Real
reason is that only few positions are
shifted and this had been expected for
some time. Also, party squabbles of
the last few months greatly strengthen
the position of coalition government.
Finally. London is cheered up by the
prospect of a $l75,000, 900. 5-year rail
electrification program which will en-
ploy many, give flip to spending.
although British stock markets,
trade figures and unemployment have
stood up well to a series of external
shocks, everything is governed still by
three factors-Berlin, Paris and Wash
ington.
Reich Policy Watched.
"In London, the naval talks with
Germany are being held against a
background of a new dispute between
France and Germany over the Franco
Soviet pact. This pact Germany de-
clares to be a menace to the Locarno
treaty. France contends that it is of
no different significance than the
Franco-Polish pact which was actu-
ally signed with the Locarno treaty
itself. What strikes the British OBJ
server is that Germany's present diplo-
macy seems designed to lull Britain
but to keep France on edge Paris
construes the German endeavor as an
attempt to divorce Britain from her
former allies. All agree that the pres
ent talks inaugurated by Hitler's
speech do little but delay the time
when Germany will come forward with
new and stronger demands-certainly
for a. return of her colonies, possibly
for other concessions more diffcult to
make. In the meantime, Germany is
rearming rapidly.
.Domestically, two cheerful facts
stand out: That all the industrial
companies now reporting maintain the
unexpectedly large increases of profit
that have marked 1895; and that the
flood of new capital issues continues.
Taking stock markets as the only
criterion, one would say that the coun-
try is surging forward into a BOOM"
Franc Again Saved.
PARIS-'France has a new gov
ernment, and for the time being the
franc is once more comparatively
safe
Three developments epftomize
what has happened.
Pierre Laval has formed a gov
ernment. 1t has asked for, and re-
ceived from Parliament. complete
freedom to decree whatever laws are
necessary to meet the financial emer-
gency without waiting for the usual
prolonged debates in the Chamber
Two restrictions are imposed: Parlia-
ment may not be dismissed, and the
Finance Committee of the Senate and
Chamber must be kept informed Of
all that the cabinet proposes doing:
whatever DEGREES are necessary may
be issued only until October 81, and
they must be ratified by Parliament
before the end of the year.
Finally, the Bank OF France will
discontinue loans on gold in an effort
to curb speculation which has been
an unsettling factor for several
months. The Bank OF England has
asked London banks to cooperate in
restricting purely speculative gold
deals.
1T is generally believed that the
franc is secure for the time being.
Next move, eagerly anticipated by
business, is lowering of the discount
rate. This, in turn, should make it
possible for the government to borrow
necessary funds to run the govern
ment at reasonable levels"
BERLIN-"The two main problems
of Hitler's recovery program-supplies
of imported raw materials and flnanc-
ing of public works and other employ
ment schemeS-are attracting wide
interest. All attempts to refinance
the rapidly growing floating debt by
the issue of government bonds in the
free capital market have failed. Ths
government met the situation few
weeks ago through the quasi-volun-
tdIy oUV mllllOu IndIkS Aodn unuch
written by the German savings banks
1t is now the turn of private and So
cial insurance institutions to take an
amount that Is expected to be only
slightly lower, possibly 900 to 4oC
million marks. The mortgage bank
market is already feeling the ef-
feet of this move. In prepara-
finy, for the neu loon insliranne cnYfo-
panies have almost suspended their
regular purchases of these bonds as
investment for their reserves"