"boom" year was 1928. In the year just closed, German industrial production (heavily canalized in the direction of re-armaments) was from 25 to 30 per cent greater than in 1938 while in the three Scandinavian countries—though easing off towards the end—it ran 40 to 45 per cent. greater. In the United Kingdom (else helped out by re-armaments) it ran'about ten per cent. greater; in Italy it began about ten per cent greater and declined to around "par." Czechoslovakia was handicapped by the slump in textiles demand and by the political disturbances and never did better than about 90 per cent. of its 1938 level, -while France had a fairly disastrous year with industrial activity at least 30 per cent. below boom levels.
The "Munich pact" of September 28 produced the greatest shock to Europen business and finance since the outbreak of the Great War. It undermined the prestige of the pound-sterling as a safe "store of value" and started a panic flow of European funds into dollars and into gold. Although on paper the apparent collapse of Czechoslovakia as a well-balanced liberal-capitalist state opened the way for a formidable German trade drive into South-eastern Europe, the year ended with the Danubian states frantically seeking to escape from German economic domination by reserving some part of their foreign trade, if possible. for the "free markets" of the world, including Britain and not excluding Italy—United Press.
Text read from the printed page and cleaned; old type leaves the occasional error.