STATE OF BUSINESS: Czechmate

When Czecho-Slovakia passed away last week (see p. 16), U. S. business grew so worried over the effects—and over the possibilities of a European war—that the stock-market cracked a solid ten points, falling back to 141.68 on the Dow-Jones industrial averages. Other effects of the passage of Hitler’s steamroller:

Czech Trade. In 1938 the U. S. bought $26,000,000 worth of goods (glass, gloves, shoes, textiles) from Czecho-Slovakia, sold her $26,500,000 worth (oil, cotton, copper, automobiles, machinery). Most of this trade was wiped out when Hitler took Sudetenland and by January U. S. imports from Czecho-Slovakia were off 67%. Last week’s events, including the U. S.’s virtual cancellation of its Czech trade pact, will undoubtedly accelerate that trend—to the particular benefit of New England shoemen.

German Trade. Germany was once one’ of the best U. S. customers, buying some $400,000,000 worth of goods a year. Last year, however, she sold the U. S. only $64,537,000 worth of goods (machinery, chemicals, cameras),’bought only $107,491,000 worth (cotton, copper, petroleum). Last week’s imposition of a punitive duty by the U. S. (see p. 11) will undoubtedly halt most U. S. buying from Germany. Dr. Albert Degener, executive secretary of the Board of Trade for German American Commerce, immediately declared: “Germany will find other sources of supply for the raw materials she has been getting from the U. S.” But exporters generally believed that Germany had already pared to the limit her purchases in the U. S., could not slash them much further.

Czech Bonds. Outstanding Czech bonds (two government issues and two Prague issues) have a par value of some $250,000,000 of which U. S. investors hold about $7,000,000. Last week the governments, although funds are on hand to cover interest due April 1, fell an average of 40 points apiece.

Czech War Debt. Czecho-Slovakia still owes the U. S. $165,696,936. Because Germany welched on Austria’s debts after Anschluss, there was some talk in Washington last week of confiscating Czech gold and dollar balances in the U. S., said to total $20,000,000.

Foreign Exchange. The British pound and French franc were held steady last week by their stabilization funds, but the Swiss franc and Dutch guilder broke. The general threat to foreign currencies showed up in gold shipments to the U. S., which jumped $40,000,000 last week to $50,000,000, giving the U. S. a record gold hoard of over $15,000,000,000. The Czech crown was “stabilized” at a rate of ten to one German mark; a mark used to be worth 11¾crowns.

World of Tomorrow. When Sudetenland went, Czecho-Slovakia trimmed plans for its building at New York’s World’s Fair by about one-third. Last week work continued on the $1,000,000 structure (see cut) but no one knew what, if anything, it would exhibit, or to whom it belonged.