Evening Star Newspaper, January 1, 1930, Page 38

‘e RECORDS OF D. C. FINANCE REVEAL GAIN Local Institutions Forge Ahead, Despite| Effects of Noverber Slump in Stock Prices. BY EDWARD C. STONE. ASHINGTON banks are ring- 7 ing- out a year ;’I’! highly tifying prosperity, one Erh:t would have been the best in local banking history had not the November stock slump come along. ‘Thes Washington Clearing House has canceled a record number of checks in the past 12 months, indicating substantial business progress in spite of many_ handicaps and the sudden cutting down of ex- pendituges by hosts of people. The Washington Stock Exchange has transacted the largest amount of business in years and mer- chants report & gaward C. Stone. first-class year | retail trade. Although the hoilday figures | are not completed. it is said that many | stores probably failed to break former sales records. 'Too many “lookers” and not enough “buyers” was one reason iven. 5 The Wall Street smash burned thou- | sands of Washington speculators and some investors severely. They suffered far more than paper losses, losses that ran into the thousands, losses that ruined brokerage accounts and even made large dents in bank accounts. Brokers sold out many customers and bankers in charge of loans on securi- ties werc unable to guide all their de- positors through the storm. Yet before | the crash came many profits had been | carefully salted away by the more| cautious element, the gains keeping the kecner investors on the right side of the ledger. High Interest Helps Banks. ‘Bankers assign as the chief reason for such a good year in local finance the fact that call money was so high | in New York for the first 10 months | of 1929. Brokers report that the call rate averaged nearly 9 per cent for most of the year. Local banks having extra funds obtained a call rate of in- terest that helped their profits mate- Tially. ’n{e rate on home loans was also satisfactory and bankers assert that they took care of all local commercial necds before they sent any money to the New York call market. If the final | reports fail to show new recor bank earnings here it will not be use | of interest rates, but due to the fact that too many withdrawals were made | from savings funds by depositors trying to save something out of the wreck in | the stock market. At this writing the usual bank call at the close of the year has not been issued. Controller Pole's last _call was on October 4. At that time Washing- ton banks had more money on deposit than on thé last day of 1928. ‘Total deposits on December 22, 1928, ‘were $204,183,611.78, while on October 4 of the year now closing local ts were $269,589,885.84. Deposits on June 29, 1929, amounted to $264,479,938.06, so that the October figures showed a | gain of $5,100,947.78 over the previous call. The figures at “he end of De-| cember ave not likely %o equal the Oc- tober returns on account of the break in stocks, slowing up in some lines of business, income tax, dividend and in- terest payments. Furthermore, with- drawals for Christmas expenses are aiways reflected in the last call of the year. in completing the 1929 banking pic- ture the importance of the Christmas savings clubs should not be overlooked. ‘The thrift idea made ai progress in 1929. ‘The banks claim that elab- orate bookkeeping takes the profits out of the Christmas savings, yet much of this money finds its way back into per- manent savings or plays a vital part in the prosperity of the merchants during | the holiday season, aiding the banks in- directly. During the year between $7,000,000 and $7,500,000 was set aside in the Christmas clubs conducted by 31 Wash- ington banks. In 1924 Washington banks enrolled 49.385 members; in 1925, ,279; during 1926, 73,61 in 1927, 78,145; in 1928, 83,178, and during the past year 87,701. The clubs for 1930 | are now well under way and reports indicate a still larger enrollment in membership and a new peak in the | amount subscribed. Clearings Establish New Peak. Clearings in Noveniber were about | $2,500,000 behind the corresponding month & year ago. December clear- ings showed quite a decline, but not large enough to prevent a new high record for the 12 months. The records kept by Charles E. Bright, manager of the Washington Clearing House Asso- ciation, show that October was the best month of the year for the number of checks cleared, with June next in line and April a fairly close third. ! changing hands at 500 flat. 19,000 shares have figured in the year's| in | looked after the interests of the Associ- | Assoct ‘see budgets for the coming year con- | /taining less speculation, yet plenty or THE EVENING S DYRING 1929 Summer months trading held up re-| markably well. | Local bank stocks drew their full share of attention. The highest priced | bank stock on the local board as 1929 | rings out is United Savings Bank, sell- ing at 600. The most active stock has been Riggs National, which reached 621 before the New York break and is now quoted around 530. National Savings & Trust is in the same class, selling at 525, with Washington Loan & Trust In the 400 class during most of the year are to be found Columbia National, (with rights), compared with th out rights). 1,330 on December 1, 1929—as ‘Total stock transactions ag; A total of 976 individual which was a five-hour session. COTTON INDUSTRY Lincoln National, National Metropolitan, American Security & Trust and Secu- rity Savirgs & Commercial. During the | year nearly 1,600 shares of Riggs| changed hands, a most unusual record | for such a high-priced issue. | Capital Traction proved the most active stock on the board. Well toward | turnover. Potomac Electric Power 51 per cent preferred, Washington Railway & Electric preferred and Washington Gas have been among the leaders. Rail- way & Electric common, closing the year around 500, is the highest priced utility stock on the board. New Issues and Members. Leading the miscellaneous list has | been Mergenthaler Linotype, with a turnover of some 8,500 shares. Lanston Monotype has been popular. People’s Drug Stores, Barber & Ross common, Columbia Sand & Gravel preferred, Federal-American Co. common gnd pre- ferred and the Merchants’ Transfer & Storage issues have been among the most wideawake stocks on the list. Lo- cal securities are closing the year with quotations well under the high marks reached before the Wall Street tumble, with the exception of Mergenthaler, Lanston and a few others. The man- ner in which local bank stocks stood up under the Wall Street excitement is considered particularly gratifying. Several new issues were added to the list during the year and new members voted in. George O. Walson, president of the Liberty National Bank, is serving his second year at the exchange mast- head and C. J. Gockeler, vice president of the District National, is keeping the | many intricate records as secretary. ‘The District Bankers’' Association, under the presidency of Wilmer J. Wal- ler, is watching the financial pulse and making every possible move toward bet- ter banking in the Capital. H. H. McKee has served another year as chairman of the Washington Clear- ing House Association, Franklin H. Ellis is in charge of the Washington Bond Club and Eugene E. Thompson has | ated Stock Exchanges, an organization | made up of about a dozen exchanges | cutside of New York and Chicago. Harold D. Krafft is at the wheel of the District of Columbia Underwriters’ iation, which is having an active year and hearing many distinguished speakers on insurance subjects. Tne club members are highly enthusiastic over the past 12 months, as Washington insurance business has been close to the top of the ladder for the whole coun- try in percentage gains. Banking Facilities Improved. ‘The year closing yesterday saw many improvements in the banking facilities of .the city. The Columbia National Bank opened its completely rebuilt home on F street; the Frank- lin National dedicated its handsome branch on Connecticut avenue, which | ha more than doubled in size; the Second National occupied its new building as the home for the G street branch, while the National Bank of Washington threw open the doors ol a new branch on Water street, in the Southwestern section of the city. Many other changes and improve- ments have been made. The McLachlen Bank is now erecting a new branch on Fourteenth street opposite the Bureau of Engraving and Printing and Presi- dent Ezra Gould of the Washington Me- chanics’ Savings Bank has plans ready for the erection of a new bank on Con- neciicut avenue near McComb street northwest. From many viewpoints an important year is passing. Many people wish they had bought bonds when Secretary Mel- lon said it was a good time fo buy them. Many others would have bought stocks when John D. Rockefeller an- nounced that he was accumulating sound securities, but their funds were gone. Bankers, bond men and brokers activity in securities. There may be a silver lining back of every financial cloud in 1930. And there may not be. Caution will be the better part of valor. TR o LARGE RADIO FIRMS IN STRONG POSITION. SHONS STABLITY Markets of World Fluctuate in Narrow Range During Past Year. BY GEORGE DeWITT MOULSON. It would be nccessary to look back- ward more than 20 years before finding a season that parallels the last 12 months in showing so limited fluctua- tions and such thorough price stabiliza- tion as have occurred in the cotton markets of the world. ‘While the maintenance of prices within a range of 3 cents a pound has deprived events of the spectacular fea- tures that characterized many previous years, when gyrations of 10 to 20 cents were attended with broad speculative activity, 1929 will go down in history as marking the culmination of one of modity markets and of American agri- culture, Against a steadily rising tide of speculation in sccurities, grain and cotton producers have been unable to contend. The Eldorado visioned by the popular imagination in the common stocks of the great industrial and pub- lic utility corporations deflected normal interest in farm products to stock ex- changes and, during the past five years, the contrast between industrial and farming conditions has grown more and more marked. As against the constantly rising level in the market price of securities, there has been a definite downward trend in commodities until dwindling profits in agricultural communities stirred Congress to action. Just how intimate have been the relations between the two phenomena it would ke difficult to judge. But with reports of the hourly course of the stock market attracting hundreds of brokerage offices in every important town in the South, while de- velopments in cotton and grain were ignored, a formidable and highly im- portant buying power has shifted its field in recent years. Cotton Speculation’ Declines. ‘The usefulness of commodity ex- changes is based on intelligent specula- tion whereby the producer finds a broader market than could be furnished by the consumer alone, and prices are against advances later on. But for the past two years, cotton prices have ruled several cents below a theoretical level determined by past reccrds of the work- ing out of supply and demand laws. In searching for an adequate and reason- able explanation, the speculative stock mania must be reckoned an important factor. The popular cry has been, “Millions for stocks, but not one cent for commodities.” Instead of a speculative market, cotton has become a trade proposition b:tween producer and consumer, each endeavoring by procrastination to se- cure the best possible terms. With necessfty left as the most compelling factor in consummating the transfer ot ownership, freed from the stimulating features of a market fraught with un- certainties, trading has been an ex- tremely quiet affair throughous the year. Farm Board Enters Situation. ‘The outstanding event of the year has been the intervention of the Fed- eral Government, throurh the func- tioning of a Farm Boe an effort to restore an economic brium be- tween industries and & ulture. While the great manufacturing plants have waxed steadily richer until bonded in- debtedness thas been retired in all di- rections through vast sums provided by participation of an eager public in common stock issues, farm mortgages have increased annually until the g ures attained the staggering total of $10,000,000,000. B. J. Grisby Declares Troubles of Small Companies Were | Comparisons of check payments for | the 12 months of 1929 with the same | period in 1928 reveal these important | trade and trends: | 91 129, 109,649, 131795928 129:300.052 26.836, Totals _...... $1. Other Cities Surpassed. Supplementary to these figures, which reflect so much business activity on the mercantile_screen, the Federal Reserve Bank of Richmond recently reported trade in the National Clplhly!n be well ahead of most of the other cities in the country. It was also ahead of the gen- eral average for the 12 Pederal Reserve districts. | But it would be inaccurate to state that business here in all lines has been | ahead of last vear or the year before. ! It has not. The fifth district Federal | Reserve Bank has reported a large | number of small failures in this city, as | well as all over the district. It has been | tuch a hard year that many concerns| have gone to the wall. The sun has not been shining in every business cor- | mer by any means, and black clouds are still hanging over a portion of the business horizon. ‘Washington brokerage houses, how- ever, have enjoyed a year of remark- able prosperity, the mania for stock speculation. as well as of conservative investing. having boosted commissions almost to the skyline. The brokerage business has been quiet since the break, but the first 10 months of the year showed record profits. During the year Harris & Voss opened a Washington office, M. J. Meehan & Co. started business in the Washington Hotel and F. B. Keech & Co. moved into new offices in the Metropolitan Club, at Seventcenth and H streets. Macublin, Goodrich & Co. took over the Washington coffice of Clark, Childs & Co. Focus:ing the-spotlight on the Wash- irgton Stock Exchange brings out the fgot that transactions have surpassed ¢!l other 12-month perinds, There has Expected. | “Radio, being a new industry, has gone through the same throes as have been experienced by every major in- | dustry in the past, and to mention two of the most recent ones—the automo- bile and phonograph industries,” says B. J. Grisby. “The perscnal appeal of radio at- tracted a large number of people into the industry who were not equipped either from an organization or manu- | facturing viewpoint to meet the strenuous competitive situation which | ultimately resulted. It had been 8\ | ticipated for many months before $he | stock market collapse that it was just | & question of time before that situa- | tion would be remedied by economic | conditions. The stock market .collapse | merely hastened that date, and many of the weaker ones have already gonc | to the wall. OIL IN 1930 IN GOOD SHAPE The petroleum industry of the United States enters the year 1930 with a very favorable outlook, officials assert. The more favorable situation that now ex- ists is partly due to the co-operation practiced among producers during the closing months of 1929. This co-opera- tion resulted in curtailing crude pro- duction in line with actual consump- tive requirements, while at the same time both the producing and refining branches operated on a more satisfac- tory basis. Based upon the best opin- ion prevailing in trade circles, there is every - indication that this co-opera- tion will continue for some time. It is rather difficult to estimate the prol production of crude petroleum during 1930. An estimate of the amount of consumption, however, more easily ascertainable. Based upon reliable trade estimates, it appears that the percentage of gain in domestic consumption of gasoline for 1930 will amount to as much as 5 ner cent. But as each year shows a larger con- sumption, a 5 per cent gain on the present scale is by far greater than a 20 per cent gain soMe years back, thus been a steady demand for local stocks cnd bonds. Even during the hottest assuring the industry profitable opera- tions provided current co-operaticn in the industry continues as is expected. 4| Protected from foreign competition, the majority of manufacturers have en- | With the joyed profitable business. price of his products determined to a large extent by supply and demand in the crops of the world, the farmer has found himself deeper’ and deeper in | debt. The prosperity of the country as a whole became threatened by the | reduction in the buying power of an cxceedingly large and important portion of its population. As compared with | wages in the city, annual returns to the farmer have grown less and less adequate to maintain, much less raise, | the standard of living. There appeared to be two, and only two, ways of restoring a more equal balance. General deflation would mean | lower prices for the goods the farmer buys by making the purchasing value of the dollar greater, but postpone the {lifting of mortgages created when_ the | dollar was worth only 60 cents of its' | pre-war figure. The alternative meant an attempt to faise the price of farm products through Government assist- ance by the enactment of a higher tariff and funds for the withdrawal of the surplus or, at least, its gradual mar- | keting. | Coolidge administration and a veto of | the bill, Congress passed and President Hoover signed a farm bill which for the first time in the history of the country brings the Federal Government as a price-making factor into com- modity markets. Instead of the free play of world-wide economic forces and the final decision | of price level by the law of supply and demand, large-scale buying and selling operations, resembling those in vogue in twentieth century business enterprise, will be undertaken in order to bring better returns to the producer as his share in prosperity. This injects an entirely new and heretfore untried ele- ment in determining prices. It s neither a direct subsidy nor a State valorization scheme, but something bor- rowed from each for the purpose of reaching the same goal—raising prices or preventing lower prices. Government Exercises Caution. While the Farm Board has been mak- ing loans on a basis of 16 cents through- cut the South, the refusal of the Staple Cotton Growers' Association to accept | conditions _stipulated, would indicat the intention of the Government to avold the pitfalls inherent in valoriza- tion measures. Loans have been ex- tended to members of co-operative as- soclations only and partake of the na- o the most important phases of com-' sustalned during the marketing season ; After two defeats during the ! an advance of $6,000,000, owing to the | STAR, WASHINGTON, D. G, A peak price of $625,000 for a New York Stock Exchange seat e low of the year of $350,000 (with- A peak likewise was reached in the number of members— £ result of a vote on February 7, 1929, by which membership was increased 25 per cent and each of the 1,100 members got one-quarter right to a new seat. gregating 141,668,410 shares in the month of October, the largest monthly total in history. issues were dealt in November 4, IS AID TO GR Declared BY GEORGE SCHNACKEL. Special Dispatch to The Star. CHICAGO, January 1.—The grain grower in the United States had a bet- ter time of it in 1929 than he had in 1928. His returns were somewhat larger and his out- 100k is a bit bright= er, but there re- main factors which any likelthood of real prosperity. ‘The most hope- ful gesture during the year came from enactment of the Hoover pro- gram for farm re- lief and the estab- lishment of ma- chinery which in the end may lay the ground work for better times for agriculture. Steps leading up to the selection of a farm board, and later its acts, had a decided effect upon the wheat market, which primarily was the commodity to be aided. Early in the year the call for a sper cial session to enact farm legislation brought a good deal of buying into the wheat market and boosted prices ma- terially. As soon as the bill was passed, creating a farm board with the dis- posal of a revolving fund totaling $500,~ 000,000 at its command, conjectures started concerning the board’s policy. ‘This led to further bullish demonstra- tions, which ran wheat prices up sharply. When, however, the board was se- lected and announced its policy of aid- ing co-operative marketing combines, with loans to be made on the basis of $1.18 for No. 1 hard Winter .wheat at Chicago, speculators unloaded and sent prices down. Bullish Crop -Conditions. Bullish world crop conditions also had been a decided factor in the price situation, but supplies of this cereal in all surplus-producing countries were so large that the usual crop scare news largely proved inefTectlve as a price stimulus. Toward the end of the year grains had to meet an unusual test as a result of the complete collapse of the four-year bull market in stocks. This caused heavy forced selling in the com- modity markets and sent wheat crash- ing far below the loan basis established by the Federal Farm Board, Later the markets were able to get back to normal and prices were on a fairly stable basis around 10 to 12 cents a bushel above the price paid at the same time a year ago. George Schnackel. During the year prices of the May de- livery in wheat ranged from 98 cents to $1.64 a bushel, compared with $1.1715 to $1.711> in 1928. No. 1 Northern wheat covered a range on the cash market of $1.23 to $1.41, against $1.0915 to $1.75 in 1928. No. 2 red ranged from $1.19 to $1.48, compared with $1.30 to $2.10 last year, while No. 2 hard ranged from 98 cents to $1.4215, compared with $1.06'2 to $1.76 a year 2g0. Board Hopes to Level Curve, The Federal Farm Board In carr: ing | out its policies hopes to be able to 1};7«%‘ out the curve of these wide prics fluc- tuations by a comprehensive system of co-operative marketing. Whether the tboard can succeed in this program iprobably Will be shown in a measure | during this next year. It was wo early ‘;cll'esjcudtse its cfiecllvene&fi during the | Nt year as its acts had almost o) |'a psychological effect. 2 !, The lower average prices for cash Wheat and futures during much of the | bresent year were due largely to the tremendous surplus produced in 1928 not only in the United States, but in all of the exporting countries, Argen- tina particularly supplied competition out of all proportion to its previous ac- tivity. Her crop, in effect, dominated the world markets and pressed prices lower. Argentine exports are estimated at over 250,000,000 bushels, compared with a normal clearance of from 140,- 1000‘000 to 150,000,000 bushels. The Ca- nadian crop was tremendous as well, but in this case the Canadian market- ing pool endeavored to hold back its stocks for more favorable prices. What the full effect of this holding policy is to be remains to be seen. Drouth Reduced Crops. This year most of the vroducing countries suffered from drouth. Dry weather cut our Spring wheat ecrop from 324,000,000 in 1928 to 224,000,000 this year. The Canadian crop, accord- ing to latest estimates, was 293,899,000 bushels, against, 566,726,000 bushels last year—a severe drop in yield caused by prolonged drouth in the Western prov- inces of that country, Argentina and Australia have had the same trouble. As a result the expectation is for a | world wheat crop, excluding Russia and Siam, of 3096,222,000 bushels, com- pared with 3,474,824,000 in 1928. Encouraged by this big reduction in yield. not only ‘at home, but !n other surplus countries as well, the Canadian pool is pursuing a holding policy. They are firmly convinced that European im- porters will have to depend upon North America for supplies during the coming scason. Recent estimates say that the pool has on its hands about 228,000,000 bushels. It feels safe in hanging on in | the belief that operations of the United States Farm Board will prevent any dumping of our wheat in competition, Despite the small production in sur- plus countries this year, there has been no great shortage of grain, owing to the record-breaking carry-over from the old crop. Stocks of wheat in the United States on July 1 were 245,000,000 bush- els, against 128,000,000 the previous | year. This tended to offset the reduc- | — ture of ordinary commercial advances; that is, made on the credit of the bor- rower plus the cotton itself, instead of merely on cotton as collateral. Should the cotton when sold fail to bring the amount of the loan, the Government would look to the credit and assets of the borrower to make good the differ- ) | HOOVER FARM RELIEF PLAN AIN GROWERS Returns From Crops Larger During Year of 1929—Outlook for 1930 mitigate against' ence. (Cepyright. 1930.) e On October 24 the stock ticker WEDNESDAY, JANUARY 1, 1930. WASHINGTON BANKS AND BUSINESS HOUSES 'ENJOY PROSPE STOCK MARKET RECORDS SET UP IN 1929 ran until 7:09 p.m. in printing final sales, a record for ticker lateness. Total sales that day were 12,894,600 shares. to 1 p.m.—the ticker ran until 3 session. On November 13, a three-hour session—10 a.m. :46 p.m. a record for a short A record daily total of 16,388,700 shares, of which 3,259,800 changed hands in the first half hour, took place on October 29. A record two-hour volume of 3,488,100 shares dealt in on the Stock Exchange on Saturday, October 19, with the ticker running until 1:23 p.m. This was the fourth Saturday volume exceeding the. 3,000,000-share mark. The Exchange was closed every Satur- day in November. Brighter. tion in Spring wheat and the total sup- ply, including the new crop, was greater than a year ago. ‘There are many in the trade who feel that the farmer this year will be rewarded with better prices for his grain than a year ago, provided he held on, but from all statistics available it looks as though the grower has sold the bulk of his crop. The record-breaking visible supply tends to confirm this view. * Farmers were told to hold their wheat a year ago and followed the advice of the Department of Agriculture, with the result that when they came to unload toward the end of the season the situ- ation was much the same as if hay marketed at the beginning of the sea- son. So he took a loss in depreciation and carrying costs. When the same suggestion was made this Season the farmer promptly sold, thinking in all probability that he would outguess the Department of Agriculture and the Farm Board. This may be the time that he guessed wrong himself. The big problem is one of finding some way to curtail acreage devoted to |, wheat production. With a over in sight and importers taking wheat only sparingly, still the Ameri- can farmer intends, &ccording to his own expressions, to plant an acreage 1.2 per cent larger than a year ago. Exports of wheat since July 1 from the United States and Canada were 121,000,000 bushels smaller than the previous year. This effectively tells the story of Argentine competition. But Argentina will not be such an outstand- ing factor in the export trade this year, with a crop in sight of only 200,000,000 bushels, compared with 307,000,000 in 1928. The situation is one that “points to improved prices before another crop season rolls around if it were not for the burdensome supplies still in sight. ‘The way these supplies move into con- sumptive channels will tell the price story. Corn a Profit Crop. ‘The corn belt again this year was favored with a fairly prosperous season and with an outlook that is quite bright. Production has been relatively small and consumption good, with the result that prices are favorable. Approxi- mately 80 per cent of the corn crop is marketed through live stock, and here as well prices are at a fairly profitable vel, | ‘The May delivery of corn at present ranges about 8 cents higher than a year ago. Prices on May corn during the entire year ranged from 777% cents’ to $1.09%, compared with a range of from 75 cents to $1.12 in 1928. ‘The crop this year was 2,528,000,000 bushels, or 308,000,000 under a year ago, and with the exception of the crop of 1924 it is the smallest since 1918. In this product there is no burdénsome surplus. An almost total failure of the Canadian oats crop indicates that there may be some business with that coun- try, which may need feed for its live stock. However, European surplus-pro- ducing countries have had a big corn crop, and this has curtalled demand from that source, despite the fact that | Argentina has produced a small crop. Early marketing of hogs and cattle by domestic feeders this year may have some effect on the consumption of the present crop, but it is sufficiently small not to create an early bearish situation. | Oats Hold Steady. A smaller oats crop, about 120,000,000 bushels under the five-year average, has resulted in a fairly firm price basis throughout the year. May oats have ranged from 48!, cents to 50% cents, compared with a- range of from 42, to 5815 cents in 1929, | Cash oats sold from 4115 to 57! cents, | against 3612 to 78 cents last yea the present time oats futures are about | 1 cent higher than a year ago. The bullish feeling in other markets had a sympathetic reflection in this market. ‘There also was a port business wif pand before another crop is grown be. cause of the poor yield obtained by that country this year. (Copyright, 1930.) GRADUAL ADVANCES SEEN IN INDUSTRY Good Business Assured by Summer or Early Fall, Bank Fore- caster Says. Special Dispatch to The Star. CLEVELAND, January 1.—Although | industry is now in a state of recession, present indications point to gradual improvement throughout the Winter and _Spring, says the Union Trust Co. Cleveland. Discussing the outlook the bank says: “As we look back over the past few months, it becomes apparent that there was overenthusiasm in some lines of industrial production and distribution as cannot be attributed to normal sea- sonal trends seems largely a correction of an effort to produce and to sell more merchandise than the market could ab- sorb during the Summer and early Fall. From this point of view, the present curtailment of industrial production is distinctly an encouraging factor, as it is in itselt a corrective measure. “Now that November statistics are | available, we are able to get a much more definite idea of the extent of the | falling off in business precipitated by | the stock market collapse than was the | case during and immediately following the crash. The November figures would | appear_to indicate the following: “1. Business in terms of total vol- | ume of production and sales is, at this writing, definitely in a period of de- | pression. | “2. The depression, however, is not universal. Although the majority of lines show some declines, a drastic re- action is evident only in certain spe- cific industries, and other specific in- dustries and also certain sections of the country are actually showing increases. “3. The fundamental soundness of the business structure, plus the con- structive efforts of industrial leaders, give promise of a gradual recovery throughout the Spring and good busi- ness with the arrival of Summer, or at latest early Autumn.” A | for ‘cows and heifers was 8. At | scarce and demand oroader. LIVE STOCK MARKET FEATURED BY HOGS Swine Prove Important Fac- tor in Producing Profit for Growers. BY FRANK E. MOORE. CHICAGO, January 1.—Hogs proved the saving factor on the profit side of the ledger for live-stock producers during the past year. Swine, after an unsatisfactory 1928 scason, were a most important source of revenue, offsetting in price gains the losses sustained in cattle and sheep. It was a year of decreasing receipts of animals at market, but one of in- creasing returns in the aggregate. Ar- rivals of cattle at the Chicago market, which is the cr.untr‘y's central exchange, were the smallest since 1915, at 2,193,000 for the first 11 months. The sheep run of 3473,000 was the smallest since 1917, while the 7,297,000 hogs which arrived were 201,000 fewer than last year, So far as aggregate valuation is con- cerned, the farmers received more money for their stock this year than last. They suffered a loss in caitle, where an average re of 60 cents per 100 on beef steers was encountered, causing decreased returns of about $7,000,000. Sheep also lost about $500,- , but these decreases were more than offset. by the higher prices for hogs. Prices in this department held about $1 above a year ago on the average. This put more than $18,000,000 rore in farmers pockets than in 1928, so that the aggre- gate return above last year on stock marketed in Chicago was about $10,- 000,000. The total value of live st received here this year was $532,000,000, the largest since 1925. Cattlemen Caught. It was an unusual year for the caitleman. The business of feeding beef | stock for market did not turn cut as profitably as the average farmer had expected. Prices averaged lower for nearly every month in the year when compared with 1928. The sirinkage was not so much on account of liberal receipts, as because demand was Jess brisk from leading packers. In spite of the fact that industrial conditions were good and the country prosperous, caitle uyers reported a sluggish demand for beef. A close analysis revealed that retailers advanced prices so sharply that consumers turned to cheaper com- modities. During the first two months of the year the market slipped «ff sharply, but recovered some in the Summer on smaller supplies. Then again in the Fall there was a slump. Failing to get in at high tide, many feeders held their cattle for a possible advance In the meantime, the stock accumulated weight and became still less desirale. This stuff sold at a decided loss later. The January top was $17, which dropped to $14.60 in March, but re- appeared again in August and Septem. ber. In November $13 ard $14 would buy as good heavy steers as any packer would want, but choice yearlings still topped at $16. This strength of year- lings was accounted for by the fact that packers could dispose of light- weight carcasses more veadily than heavy kinds. For the first 11 months the average price of beef steers was $13.40, compared with $14 in 1928 and $11.60 in 1927, Good Demand for Stock. Most of the year there was good demand for “she” stock. In order to cheapen the cost of beef, buyers took to butcher animals more freely when they neglected steers. The n\'e;lle price $9.80 last year. Bulls likewise scld actively throughout and averaged bet- ter than in 1928 because they were The in- crease in “hot dog” dispensarics along automobile routes greatly increased the call for bologna material and packers were rushed to get 2nough to supply the demand. A decrease of 90,000 in the calf supply during the first 11 months developcd 8ood action in that market and caused vealers to sell readily. The market vas about in line with a year ago. Many good calves went at $16 to 313 the high period, with the bulk of the packer class at $13 to $16 during most of the year. Discouraged with prices received for fat beef steers, farmers did not show the active interest in stockers and feeders that usually prevails. Most of the busi- ness in this department was done during the second half of the year, after the range cattle appeared. Prices were sharply lower than in 1928, but this fact failed " to stimulate action. Country buyers were inclined to economize by taking lighter weight steers than usual. i The year's business was about 10 per cent smaller than in 1928 and the price range 50 cents lower. Hogs Higher. Moderate receipts of hogs proved a telling factor in holding prices at higher level. Demand was uniformly strong from packers and a broad ing from Eastern shippers kept competition active. Leadmg packers started a campaign early in the year to keep the market down. Their strongest ammunition was expended in building concentration points in the West to assemble swing purchases direct from the producer. By this means they hoped to reduce compe- tition at leading markets and get their hogs cheaper. ‘At Chicago alone they received 1,975,000 hogs direct, which amounted to 27 per cent of the receipts for the first 11 months. But despite this strategy the market averaged higher than last year, showing & gain of about $1 a hundred on the average. Prices averaged for the year about $10.45, The year started with best hogs sell- ing at’ $9.25, the low prices being a legacy from the previous season. Dur- ing Spring months when receipts drop- ped the market moved up and best went for $12.50 in July, which was the peak price of the year. Later the heavy movement _depressed the market and prices in November were back to the |000,00! January level. A lack of hogs in Eastern territory stimulated shippers and pack- ers were not able to hold prices down very long in spite of generous importa- tions direct from the country. Lack of activity in the lard market caused gncken to avold the excessively heavy I0gs most of the year, while a broad demand for pork foflm stimulated the call for hogs that averaged 175 to 250 pounds, ‘Cooyright. 1930.) EXPERTS SAY From Th BY JOHN F. SINCLAIR. HE year 1930 should develop into a normal year. I say develop, because it is now pretty gen- erally agreed that the first few months—perhaps the first cix months—will not be up to the cor- responding period of 1920, but from that point on business should move ahead. The _decline of the last two months, which be- gan with the stock market smash in late Octoher, had a more depressing ef- féct on business ‘han was expected. The November fig- ares, already avail- able, show a very preciplitous drop in businets activity over the preceding month. The Analyst in- dex of bu-'ness ac- " tivity in its pre- John F. Sinelatr. lininary data shows a decrease of 8.3 points for the month of November. It | is the largest month-to-month decline |in the history of that index, which covers the entire post-war period. D. W. Ellsworth, writing in the An- alyst, makes the statement that the No- vember decline, with four notable ex- ceptions, “is probably the largest de- crease in business activity which has occurred in any one month during the last 46 years.” | . These four notable exceptions oc- | curred in the years 1893 and 1907, both | | years of severe business recession, fol- | lowing severe declines in the stock | market. The Standard Statistics, another au- thar:ty in this field, makes this state- | ment: | . “Industrial production, as measured | | by the Standard infex, which is cor- | rected for seasonal variation but not for secular trend, experienced in No- vember the most severe recession wit- {A’efieg in any single month since May, Automobile Production Drops. Those industries which have shown the largest drop in trade activity cen- ter about automobile production, which fell off 259 per cent in November as compared with October; steel, 19.6 per | cen:, and that of cotton goods, 15 per | cent. If the figures for November, 1928, | are compared with those for November | this year, we see that motor car pro- duction was off 13.6 per cent, steel down 17.6 per cent and cotton goods off 10.8 per cent. The record for December is probably better than that for November, although no figures as yet are available. Shopld the slowing down in business activity for December equal that for November, still the_record of production for 1929 will exceed that for 1928. The first six months of 1929 were so exiraordinarily active that they made up for the grad- ual drop in the last six months. Now, what of the future? What is in store fcr business in 1930? No an- swer to any question is more sought after in these days following the most extraordinary yezr in business history. Across from my Broadway office, in the heart of uptown New York, there is a sign 120 feet long and 30 feet high, occupying one of the most costly spaces in the city, upon which the following announcement appears: “Forward, America! Business is good —keep it good. Nothing can stop U. 8.” Forecast Psychological. Back of all business is confidence; back of confidence is psychology—mass psychology in a country as large as the United States. The old saying that prosperity “is 10 per cent credit and 90 per cent confidence” is more true today 1in our complex interdependent business life than it has ever been in history. One of America’s leading economists in replying to a question of mine as to the outlook of business in 1930 said that any forecast, “to be accurate, would need to be psychological rather than economic.” ° Then he continued: “Are we in a new era again? That is to say, have we discovered a new method of con- trolling psychology and influencing the depressions of an effective majority of the business executives of the United States who hold in their control the power to place or not to place orders for equipment, labor and materials?” Confldence and credit—these two fac- tors are at the base of all prosperity. ‘What about the confidence factor in the situation for 1930? First, the Hoover conferences have gone a long ways to correlate business activity for 1930. The subsequent committee of business men appointed by Julius H.| Barnes, chairman of the board of direc- tors of the Chamber of Commerce, is following up this work. Some people belleve that too much publicity has been given to the White House business conferences, Be that as it may, it is now generally agreed that these conferences greatly helped to re- establish business confidence. The idea 1s not a new one with the President. The conference on unemployment called by President Harding in 1921, un- der the chairmanship of the then Sec- retary of Commerce and now Presl- dent, Hoover, had the present situation in mind in saying: “If all branches of our public works and the construction work of our public utilities—the railways, the telephones, etc—could systematically put aside financial reserves to be provided in times of ‘prosperlty for the deliberate purpose of improvement and expansion in times of depression, we could not only greatly decrease the depths of de- pression but we could at the same time diminish the height of booms. We would, in fact, abolish acute unemploy- ment and wasteful extravagance. For & rough calculation indicates that if we maintain a reserve of but 10 per cent of our average annual construction for this purpose we could almost iron out the fluctuations of employment. “Nor is this plan financially imprac- ticable. Under it our plant and equip- ment would be built in times of lower costs than is now the case, when the contractor competes with consumable Boods in overbidding for both material and labor.” ‘The amphasis has been on construc- tlon—roads, bridges, buildings, rail- roads—"the balance wheel in the pic- ture.” Confidence Restored. In the last six weeks business confi- dence has been restored in the following ways: 1. Henry Ford led the way by an- nouncing that his 150,000 employes would receive an increase in pay. 2. By a reductioh in the income taxes for f.l‘ala year of approximately $160,- | | | | 3. By the railroad executives agree- ing to expend $1050,000,000 in 1930, / of which $140,000,000 will be expended in the first six months—more t! in | the same period of 1920. Thess are capital expenditures. Another $1,300,- 000,000 will be spent for supplies and maintenance, while still another $3,000,- 000,000 for wages. 4. By public utility leaders announc- ROUS YEAR| 1930 SHOULD DEVELOP NORMAL TIMES See Confidence Restored Before Summer and Business Moving Ahead at Point. John F. Sinclair, financial expert for The Star and the North Ameri- can Newspaper Alliance, has analyzed busines: uvailadle data. Following is his forecast of by s prospects from the latest usiness for 1930: maintenance—an increase of $65,000,000 over 1929. 5. By leaders of the construction and building industries announcing that the, highway construction for next year would call for capital expenditures of $1,100,000,000—an increase of 10 per cent over 1929. 6. If the job of modernizing dwelling houses was undertaken, and there will be considerable work in this direction, it would require another’$2,000,000,000 for 1930. 7. By different citles and State gov- ernments agreeing to co-operate in put- ting ahead their plans for needed con- struction, so that a total of $625,000,000 will be spent in this field. 8. By labor leaders agreeing not to ?;x;nnn pressure for increased wages for If the expenditures of these larger groups are considered,‘it represents a gain over 1929 of about 15 per cent. Nct bad work on the part of the Gov- ernment and business in a period of less than eight weeks. Buying Power on Main Strect. It is true that more fortunes were lost in the last three months of 1923 than in any of the other stock market drops. But the buying power of the Nation is not on Park avenue, New York, but on Main street, U. 8, A. Col. Ayres of Cleveland made the statement, that during the 50 years that have elapsed since the United States returned to & gold basis, following the Civil War, there have been 13 great “bear” mar- kets preceding this one. Of these 12 were followed by serious business de- pressions. Nevertheless, this Cleveland expert does not belleve careful com- parison between present conditions and those which existed when previous stock markets went down indicates that we ;l::uldl gxpel:t Inyusfrlous decline in eral business activity over an; length of time. e o Col. Ayres believes that business wtfild have dropped in its activity about, this time even had the stock market collapse not, occurred, for two principal economic reasons: The automobile {n- dustry had overproduced in the first nine months of 1929, so that a let-down there was in order to allow the dealers to clean up their stock of cars. Natu- | rally when the automobile industry | lessens its buying it affects a score of | industries depending uj Enctlvlty, pending upon it for their The other factor, showing up before the stock market decline, was the drop ° in the volume of new building con- struction. Throughout the year 1929 the tolume of building has been drop- ping becaus: of the high price of credit. This was not the only reason, however, for the decline in building. Two other factors helped to slow up building: First, the post-war demand for new construction had been pretty well taken care of, and, second, the great diffi- cuity in securing funds on junior mort- gages. Not in recent years has it been harder to secure money on second mortgages than the year, 1929, Banks Borrowing Money, The other factor meking for a re- | turn of prosperity is more healthy New York banks be- | gin the new year with plenty of money |on hand. But many of the leading banks throughout the country are bor- rowing money. The demand for their funds is almost as strong now as it was before the market crash—stronger in_some cities. In spite of the spectacular decline in | brckers' loans, the total bank credit outstanding still is greater than at the beginning of October. Loans of re- porting banks have increased, too, though lower now than in mid-Novem- ber. So the banks have not liquidated |and credit is not yet what would be called easy. 2 | It is likely that the beginning of the | year will see a drop in the rediscount rates of the Federal Reserve Bank of New York, followed by an outflow of gold to Europe. Some expect the out- flow, before June, to reach as high as $300,000,000. But the real burden that the credit structure must recognize this Winter and through 1930 is just how to make good the shrinkage of $4,500,~ 000,000 of brokers' loans which has taken place since the stock market drop. One writer puts it this way: “When stock prices discount the fu- ture too far in advance a great many people make money by selling their stocks and taking their profits. These winnings are not an addition to na- tlonal wealth; they are an overdraft on national savings. When the bull mar-~ redit conditions. | ket is terminated the last margin buy- ers of the stocks shoulder the task of paying off the overdraft. That is what has been happening in recent weeks. In a bull market a large part of the increase in brokers’ loans represents profits taken out of the markets by successful speculators, and in so far as prices are in excess of values these profits constitute an overdraft on n: tional savings credited to the bank a counts of the astute speculators. In bear market a large part of the shrini age in brokers' loans represents the paying off of the overdraft by other and less astute operators.” 1930 Should Be Normal. T8 sum up, the new year should develop into & normal one with the first few months slower than for the corresponding period of 1929. Bonds should be more in demand than for several years, with stocks being bought on an ‘investment basis through the year. Commodu{ prices should show a slight rise, building costs should re- cede and the number of employed should remain fairly steady. Confidence should be well restored before the Summer, and credit should be flowing easily into the coun! by that time. Mergers should continue, probably with increasing frequency be- fore the close of the year. Basically, conditions are healthy. If we have any depression it will be due to ignorance. The year 1930 may not be the record year of American business. It will not show the spectacular ups and downs of the extraordinary year just closing. But it will be one which should show steady advancement and business progress. rogres Copyright, 1930, North (Copyrig Nopth INTEREST RATES LOWER IN FOREIGN COUNTRIES Special Dispatch to The Star. NEW YORK, January 1—How th> decline of security values in the United States has been accompanied by a de- cline in interest rates over the greater part of the world is shown by the Alex- ander Hamilton Institute in the follow- ing table, comparing the discount rates of central banks during recent months with those of December: Re- Pres- cent ent American Newspaper ce.) rates. rate. .. 612,6,5%2 5§ nk Bank of England.... Fereral Reserve Bai ing new capital expenditurss of $865,- 00,000 in addition to $125,000,090 on | 4 Norway . Austria ...