Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-08-14
Foreign Uncertaintie,
Keep U.S.. Business
On Tenterhooks
Situation Regarded
As Worse Thun Fear
Of Actual War
Bv GEORGE r. HUGHES.

SPECIAL Dlkp2Gch 10 Inc Stef.
NEW YORK, Aug. i'm the
opinion of many business observers
uncertainty over whether 1t is to
be peace or war in Europe is a
greater deterrent to Harvard plan
ming in business than fear of actual
war.
Needless to say. statistical evil
dence is lacking to support that
view. but it is an understandable
situation which may we'll exist.
There can be no doubt that threats
of war have kept business, as well as
the security markets. no tenterhooks
for several months. There has been
no real assurance in counting on
peace, even though the balance Of
financial opinion has leaned to the
view that peace will be preserved.
BY the same token it has hardly
seemed necessary to lay plans def
nitely for possible war conditions
The result, naturally. has been
a state of business affairs wherein
many plans have likely been held in
allegiance But at the same time,
in the wholesale markets-if We
choose to read it that way-a GER
tain portion of recent forehanded
buying of merchandise may have
been done by those who want to
be sure of their supplies II war
should come and should tempo
rarily disrupt the orderly processes
of production while the way Is being
cleared for the urgent needs of bel
ligerents
Big Purchases Likely.
As to what would happen should
general hostilities actually break out
in Europe, probably majority bust
ness opinion would side with Dean
John T. Madden. director of the
Institute of International Finance
of New York University, who re-
Gently declared that a European
war in which this country was not
involved could not affect the United
States adversely to any appreciate
extent during hostilities.
Dean Madden proceeds on the as
sumption that the Anglo-F French
group would need to buy a great deal
from us and he does away with any
idea that the allied democracies and
the neutrals will not have the where
withal for making such purchases by
pointing out that their total OF
gold and dollar assets is more than
one and one-half times as large as
the United States exports to the
allied and central powers and Cam
ada during the period from July,
1914, to July, 1917" He argues, fur
ther, that imports by the United
States from the belligerents and nell
trails will make available to the two
groups additional dollar balances.
Buying Power Seen.
Thus he says, the Anglo
French group and the neutrals, with
out borrowing in this country land
such borrowing. In a great many
cases, is prohibited by the johnson
Act, are now in position to buy in
the United States at the present
price level much larger quantities
of goods than they were in 1914"
But the fact that this purchasing
power exists and would become
effective for war materials and sup
plies in the event Of hostilities does
not dispose OF the thought that
business would be under the neces-
sity of changing over from a peace
time to wartime scheme of things
with certain wide areas of activity
definitely losing by reason thereof.
Viewing broadly the period of
probable shock and drawing upon
memory of what occurred at the time
the World War broke out. it may be
fair to assume that, if war should
come, business will be at its worst at
the outset of the conflict. That was
the case in late 1914. Recovery from