Evening star., 1938-01-02
LONDON HOPEFUL,
RANKS AS WORLDS
BEST BAROMETER
Year Reveals France Aqain
Out Of Step and Sharp
Contrasts in u. S,
BY Cambridge Associates.

BY Cambridge Associates.
Again Great Britain must be con-
ceded the honors as forecaster of
Worldwide trends. On the basis of
1887 industrial statistics, also, France
continued as the most out of step
great power, and the United States
as one of the most violent contrasts.
While the rest of the world was
Whooping it up and looking to a
bigger and better prosperity, London
was beginning to see the cold, gray
light OF dawn. For the peak of senti-
ment and business activity alike in the
empire was reached in the closing
days Of 1895, and 1897 opened with a
considerable body Of opinion in London
forecasting comparatively early end
to the armament boom"
1t will not be forgotten that the
British devaluation of 1881 was
followed by reversal of the down
trend in that country, and touched
of the series of events which started
the inf1ationary spiral So it is q
definitely encouraging sign to the
rest of the world that optimism is
the keynote in financial London as
the year closes. Since it covers so
large part of the world, and since
its trade dominates international ex-
change of goods and services, this at
titude must soon be either reversed
or reflected in a resumption OF the
recovery.
French Production Low.
France in 1887 continued as the
leading exponent of def1ation, for
despite two devaluation moves, trade
continued at a low ebb The long
stand taken against such action,
primarily as result of the over
whelming sentiment against repeti-
ton of the disastrous postwar infla-
ton, left the nation in such q weakened
state that quick restoration of con-
fldence was impossible. On the basis
of 100 for 1929. the 1887 average of
industrial production in France is
estimated at approximately II, only
slightly above the depression low of
67.4 established in 1885. The home
building surge which blessed England
was not seen in France And although
the new year is greeted in France
with more hopefulness than for some
time, the almost certain establish
ment of Fascist state in Spain, the
undigestible body of domestic social
legislation and the increasingly ad-
verse balance of trade hardly COM
pensate for the small evidence of
repatriation of gold which has taken
place.
The developments in Europe, how
ever, were far less sensational than
those in this country; our frightened
declines in the security markets were
regarded with amusement at first,
that we, who were so isolated from
the scene of activities, should have a
war scare. But an upward direction
in an industrial trend line at the close
of the year was not to be found
throughout the world. Unless, OF
course, is taken into the reckoning
that surprising index of the Russians,
which stands at nearly 400 on the
| oasis OF 1879 as lUU.
Reich Makes Gains.
Perhaps the most astonishing record
for 1887 was turned in by Germany
which seems to be making something
out of nothing. Too much reliance
should not be placed on current Ger
man indices, according to some
authorities, but for what they art
worth, the approximate level of indus.
trial production rose from an averag.
of 1863 in 1896 to about 113 in 1887
both on the 1929 base. Self -suficiency
through the development of synthetic'
is here stressed as nowhere else in tn
world
Prosperity in Italy has closely par
alleled our own, except that the 1913:
low Of production was $50, agains
538 in the United States. Italy ais,
has budget problem, owing, in larg'
part, to the high cost Of controlling
and developing Ethiopia. A 10 pc
cent capital levy was imposed ON cor
porations in 1887.
The situation in Japan is somewha
precarious. As nation virtually with
out raw materials, the penalty imposet
(See LONDON. Page E-l0.)