Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-07-01
Short-Term FOREIGN
Outlook Regarded
As Favorable
industrial Rate Up
Slightly; Commodity
Prices Improve
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, July 1.-The past
months international economic
news was relatively favorable, from
the shorter-run point Of view, &C
cording to the monthly review of
foreign economic conditions by VIM
throp w. Case In the current issue
of the Annalist.
Foreign industrial activity in gen.
eral expanded slightly and COM
modify prices advanced, while fur
ther absorption was reported of sur
plus commodity stocks" he declared.
THE apparent sharp drop of April
international trade is probably not
to be regarded as of more than pass
ing interest.
With world industry, trade and
prices already dependent to a
considerable degree upon deficit
financed arms programs, and with
further support from the same
source in prospect, the world eco
nomic outlook for 1899 is decidedly
Favorable" assuming even mod
crate recovery in the United States.
From the longer viewpoint, how
ever, the future is increasingly OBJ
scure. Infiationary rearmament
cannot continue indefinitely to sup
port pacification, the psychological
rebound that would sweep the world
might 60 far to Offset the depres-
sive influence of the sudden curtail-
ment of Government arms expend-
itures. Unfortunately, no such out
come is in sight.
The danger is. of course, that the
economic, as we'll as the political,
problem will rather be resolved in
the final crucible of war. If SO, the
world that will survive-since some
sort of world will doubtless go on
is not likely to be one to which our
accustomed economics will be APP
plicable.
"A minor advance marked foreign
industrial activity in April, the An
nallSt index with Russia excluded
advancing to 1915 preliminary
from 1918 in March. The February
index of 1880 was the highest on
record, exceeding even that of l22 8
for November, 1897; except for these
two high records, however, the pre-
liminary April estimate is the high
est ever reached.
April indices showed gains for
the United Kingdom, France (the
highest since l93D. Canada, Bel
GUM, Sweden, Norway and Den
mark. Italian industrial output de-
clined when normally a seasonal
rise takes place. German industry
made minor gain. considerably
less than the usual seasonal rise of
the past years, and the seasonally
adjusted index therefore dropped
In view of the fact that German
industry is working nearly at ca
pacity, however. it is doubtful to
what extent past seasonal trends
are now valid.
With the United States included
the world index. of course, went
lower in April, since industrial pro-
duction in this country. as measured
by the Federal Reserve Board in
dex. suffered sharp decline. The
United States index for May was
unchanged, while that for June is
likely to show a gain. In view of
the generally upward trend of in
dustry abroad, the world index with
the United States included will
therefore probably advance in May
and June.
preliminary April international
trade data suggest a contraction
considerably greater than the usual
seasonal drop, the preliminary sea-
sonally adjusted index falling to
37.9. from 404 in March, and now
standing at the lowest since October
1886. There is some reason, how
ever, to believe that more complete
returns will considerably moderate
the reported decrease"