“World Is Riding Out U.S. Recession”

Press, Volume XCVII, Issue 28513, 17 February 1958, Page 9

“World Is Riding Out U.S. Recession”

Press Association —Copyright) (Rec. 7 p.m.) LONDON, February 14. So far, the non-dollar world was riding out the American recession without too much damage, Reuter’s financial editor reported today. There were many difficulties, but there had been no collapse, he said. Wall Street and sterling were probably the supporting factors. “In the face of ehough bad business news to sink a battleship, Wall Street held at only 15 per cent, below its absolute peaks of 1956 and 1957, which were peaks of carefree inflationary boom. Firmness of Wall Street is a great help to business confidence outside as well as inside the United States,” he said.

Sterling, the other indicator of world confidence, was even better than Wall Street, but the London Stock Exchange had been harder hit.

Industrial shares in London fell this week to their lowest since 1954—below the worst depths of the sterling crisis of last year and of the Suez warfare in 1956. Britain had none of the serious unemployment that had appeared in the United States and Germany. Britain’s steel industry was still working at more than 90 per cent/ of capacity, while America’s at the moment was down to below 55 per cent, of capacity. Money Shortage

In principle, the international position was one of the most serious aspects of the present American recession. In 1954, the non-dollar countries were well off for dollars. This time, with the exception of Germany and very few others, the non-dollar countries were acutely short of money.

There were many difficulties |n areas ranging from France, India and Indonesia, to Latin America and New Zealand, and to perhaps a lesser extent in Britain.

If the looming famine of dollars and West German marks materialised, there was a danger of cumulative international trade restrictions. So far, the danger had not materialised, and most countries were tackling their difficulties in good heart and as reasonably good neighbours.