Evening star., 1935-05-19
BY ALBIN e. JOHNSON.
. ENEVA.-Despite protestations
of nnlificians and nrnfas-

4 Of politicians and profess
I sional "Pollyannas" to the
~ contrary. the worlds eco
nomic situation, as whole,
Is not improving, and in many re-
spects new low levels in commerce,
production and consumption were
reached during 1884. Official and
complete reports Of imports and ex-
ports Of $50 countries and territories
have been received by the intelligence
economic and financially sections of
the League of Nations and Interna-
tional Labour Office, and the COM
posite picture charted by expert stat
isticians is not particularly bright.
World trade-imports and exports
combined of 100 countries-totaled
only $23, 100000 (gold) in value
last year, according to official figures.
That was less than the 1888 total by
59,000,000 gold dollars. When COM
pared with the pre-crisis or 1929 to-
tai the shrinkage is startling. The
value in gold of the worlds trade in
1929 was $68, SOC, 100000.
Enter Military Service.
1t is true that there has been an
upturn in many countries and that
the downward tendency has slowed
somewhat or halted in others. But
these usually are small and non-in-
dustrial countries. 1t is also true that
the number of unemployed today is
less than 1t was a year ago. But hun
dreds of thousands of formerly idle
men have entered military service
in Italy, France, Germany, Russia,
Poland, Czechosloyakia and even in
England. Other tens of thousands
have been reabsorbed in industry en-
tirely as a result Of orders for war
Materials stimulation which every
one admits is artificial. In Germany,
for example, where the NaZis boast
that there are $4,000 less idle now
than there were year ago. it is re-
liably reported nearly 80 per cent Of
the nations workers are engaged in
the manufacture of war materials,
directly or indirectly. Before 1914
only about IS per cent Of Germany's
workers were engaged in the manu-
facture of war potentials.
Jumped together the gold dollar
value Of world exports in 1884 was ap-
proximately s11 1854, 1000, 900, or S376,-
100000 less than 1898; the value of
imports was $12,011, 100000 gold as
against $12,484, 900, 900 the previous
year. When compared with the last
normal" year, or 1929, the worlds ex-
ports have declined by three-fifths and
its imports by about one-third OF
former values.
The decrease in 1884 over 1888 may
not have been as great as those of
previous years, but smaller decline
last year may mean more than a
much greater drop two years before.
The irreducible minimum Is rapidly
approaching. The coming Summer,
it is predicted, will tell whether the
nations Of the world are to embark
upon suicidal economically and
commercially speaking) financial and
currency war or if some sort Of a
working agreement on stabilization is
to be reached.
Gold Block Cracking.
There are indications aplenty
that the gold bloc is cracking badly.
The Czechoslovaks first deserted
the Franco-Swiss- Dutch combina-
ton, which was intent upon main
tanning the gold standard until such
a time as the currency systems Of the
world would be reorganized. Then a
few weeks ago the Belgians, faced
with growing unemployment, shrink
ing foreign commerce, budgetary
difficulties, ETC., followed suit. The
Bank of France offered a large loan
to support the belga, but the Brus-
sells government decided to avoid
going deeper into debt.
Now Switzerland is wavering. Un-
able to manipulate the Swiss franc
without consent of the people. the
Swiss government has called for a
popular plebiscite on June 2. The
voters will be asked to authorize the
government to take the necessary
measures to combat the crisis" That
means to maintain wages, lower
prices If possible, preserve the in
tegrity of the franc, maintain the
standard of living, revitalize industry
dIlu UIlIl6 GOuA ISIo N"AlO d4AAAuohy ASAN
hundreds of millions of francs in the
country to Swiss resorts.
Conservative and reactionary au-
thoritieS interpret the referendum to
mean that the gold parity of the
franc will remain inviolate; others,
however, who seem better informed,
point out that def1ation has failed to
remedy matters and that abandon
ment of the gold standard is the only
alternative open to the government.
A controlled initiation" officials say,
will not impair the franc and will be
better than leaving it to the tender
mercy of spectators and shifting
economic winds.
Gold Leaves Swiss Banks.
An unmistakable sign is the fact
that gold continues to flee from Swiss
banks. In three weeks more than
326, 900, 900 gold francs (about $780,
0,0O0) was withdrawn. The gold
reserve of the national bank was
1,7S3 100000 gold francs on April l.
On April is it had dropped to l,457,-
00O, 900 francs.
Financially considered, the SITUATION
of Swiss banks is good. There is a
gold coverage of over 90 per cent,
which is the highest of any country
in Europe. Frances gold reserve
covers 1923 per cent of the paper,
bronze and silver money issued. But
the steady drying up of business, clos
ing Of hotels, failures of small es-
Establishments and increasing unemploy-
ment makes some sort of political
action imperative. For example, COM
mercial bank deposits decreased from
593, ,000, 900 gold francs to 349,000,0 900
francs between March IS and April Is.
Switzerl&. ids exports and imports
also have been badly affected. I'm
port values, in gold dollars, dropped
from $5l5,800, 900 in 1929 to $272,-
100000 in 1894. Export values fell
from $4O0, 100000 gold in 1929 to
$158, TOO, 900 gold last year.
One-third Of Switzerland's indus