Evening Star Newspaper, June 29, 1930, Page 61

News of 'M'arkets' Paget_l 1to 4 Part 6—12 Pages LONSDALE'S VIEWS ONTRADE QUTLOOK AROUSE COMMENT President of A. B. A. Believes Harvesting Time Will Be Signal for Upswing. TELLS VIRGINIA'BANKERS ALERTNESS IS VITAL Bays Association Has Reduced 52 Ways of Computing Interest to Four Methods. BY EDWARD C. STONE. John G: Lonsdale’s prediction bemt the Virginia Bankers' Association at time, as it 1s always ahead of business improvement will commence in Sep- tember, when new wealth from the year’s crops is taken out of the ground, has aroused great interest among ‘Washington bankers. The president of the American Bankers' Association is in a particularly good position to study financial conditions all over the country. “By Autumn the business barometer should indicate calm, fair weather ahead,” he asserted. “I am inclined to think the storm of the past few months is about passed and that the sun is already peeping through in spots. September, 1929, really ushered in the recession, so that to be fair, compar- isons by months should start with Sep- tember of this year.” Several local bankers believe Mr. Lonsdale is right in his forecast. All hope that he is. W. B. Hibbs, dean of ‘Washington brokers, remarked the other day that business would improve after the Fall elections. The' stock market should do better before that time as it is always ahead of business in discounting future changes, he said. ‘Thus both bankers and brokers see better times coming in the Fall. Mr. Lonsdale told the Virginia bank- ers that “prosperity, as we all have learned, is an elusive thing and flits away rather quickly and mysteriously unless we keep an eye continually on it and the factors that produce it. Pros- perity, some seem to think, is a one- way street, but they have now discov- ered traffic moves over it in both di- rections. America had just begun to believe it had found the formula for continuous good times when our de- pression came along. ~Finding our hopes and beliefs shattered, we now trust business will be convinced it ought always to be prepared for emergencies. Alertness Pays Huge Dividends. “Business has demonstrated the fact that alertness pays huge dividends; that to sit down with folded hands and wait for customers without going after them is & good way to let your rival get all the trade. Too often a business man who caimly waits for his ship to come in finds it to be a receivership when it arrives in port. In these days of business complexities, some seem to think that the day of the individual has passed. But they are wrong. While the individual may not attract such oufstanding attention as he did in the days of old when institu- tions were conducted on a smaller scale, he nevertheless is to be found in any large oerporation, dominating the situation, giving orders here, co-operat- ing there and shouldering the respon- sibility of keeping a large group of , lieutenants, captains and privates work- ing in unison and moving forward un- der the banner of progress. And all of these are held accountable to the pub- lic because the public has entered into & partnership agreement with the cor- poration through purchase of stock. Even in the gigantic mergers that have taken place within the last two years there remains more than ever the necessity for a leader, an aggres- sive personality whose duty it is to see that basic principles are not forgotten, that the rights and privileges of the individual workers and the customers they serve are as well provided for as in the smaller business units. “By focusing the illuminating light of analysis on all our business, we bank- ers can soon determine whether we are losing or gaining ground. Many bank- ers, like Ichabod Crane, need the flash- light, or microscope of analysis, to un- cover the hobgoblins in their business and then they might sit back and laugh at their rivals, who hesitate to investi- gate and learn the truth. A. B. A. Guides 20, Bankers. “Fortunately for American banking, the application of the microscope to vital problems is not left entirely to the individual, for there is_a powerful re- search laboratory working constantly in his interest. I reier to the American Bankers' Assoclation, which is daily submitting every phase and every de- | partment of banking to searching scru- tiny and study. The findings of these investigations are made available to the 20,000 members of the organization for their guidance, “Investigations have resulted in the passing of beneficial legislation, revision of banking practices and innumerable «changes for a strong®t and more effi- “cient banking structigé. “In the savings f€(d, for instance, it ‘was revealed that cthere were 52 of computing interest. By careful sele tion, these were reduced to four ap- proved methods, “In the battle that is being waged for Justice and equality in taxation our as- soclation always has stood at the front where the fighting is heaviest. Realizing the right of taxation is a sacred one snd comes next to an individual's liber- fies. we have been unrelenting in our €ftorts to equalize excessive burdens and gx;?e levies on a fair and impartial sis, Thinkers Banking’s Great Need. “The fact that our problems are thus + being placed daily under the microscope by a large association does not relieve the individual banker of his responsi- bilities. He must apply the formulas and principles of these findingsito his own institution. This requires a great deal of study and thought. From my ‘D ohservation, you can lead a man to Ecu. Lut you can’t make him think— a8 to do that for himself. Al the world is suj -to_be run ad thinkers, it 1s & lsmenteble fach thay| mercial small percent of the le ‘ 5 per tage ‘peop) a rea ofl‘l‘%flh banking conditions of today in & state of great uncertainty, there never was a time when analysis and fleeg thinking were more needed in country and city. - The smaller banker, upon whom have fallen many difficult burdens, is placed ‘at a distinct vantage in the making of analysis, and oity correspondent banks and bankers’ wlnochthn!h”-!mldblllhmm assist L ¥ “To the smaller Banker I extend full pathy and for he has' been mainstal y of agriculture at a time | lei & serious national THOMAS E. JARRELL, President of the Washington Savings Bank, who celebrated another birthday Anniversary yesterday, receiving hearty congratulations from business associates. Mr. Jarrell is prominent in real estate | as well as banking, being president of the Thomas E. Jarrell Co. SPECULATIVE BOND ISSUES DEPRESSED Rails Under Pressure During Week Following Reports of Poor Earnings. Special Dispatch to The Star. NEW YORK, June 28.—While United States Government obligations reflected the still further easing of money rates by going to a new high average for the year, the past week in the bond market was chiefly notable for the wide decline in speculative industrial issues and Junior railroad bonds. Since speculative types of bonds are more likely to follow the course of stocks and usually pay little attention to the movements of money, the course of the high-grade issues must be taken as as truer gauge of the market. Rail Group Sell Off. Yet that is not all of the story, for prime railroad bonds suffered not a little in the forced liquidation of the early days of the week, when stock mar- gins were crumbling as fast as they were prooped by quick sales of bonds. As a matter of fact, 10 such railroad mort- gages finished the week at an average of 95.20, compared with 95.45 in the previous week. At 95.20, this group may De said to be out of line with the market, since the fluctuations of this type of sc- curity should reflect the course of money, now at its lowest since the lat- ter part of 1924. ‘Taking the market as a whole, Stand- ard Statistics weighted index shows 30 bonds at 99.3, or the lowest since early March, when the same. index dropped to 98.7 on March 4. Hence the market is not in such bad shape as might be suspected if one were merely to examine casually the many weak spots. The continued reporting of unex- pectedly large decreases in railroad earnings for the first™five months of the year brought heavy liquidation in the junior securities of the carriers and such issues as Chicago & Eastern Illi- nois 5s, Chicago Great Western 4s, St. Paul adjustments, Rock Island 41lss, Denver & Rio Grande Western 5s, Erie 5s, International Great Northern ad- Jjustments, Frisco 4!;s, Seaboard Air- line 6s, and Boston & Maine 5s dropped to levels not only below their previous bottom marks of this year but below the prices touched in the panic days of last Autumn. Foreign Tssubs. Foreign bonds were fairly well sup- ported by buying for overseas account, though here again the forced selling factor entered into the declines earlier in the week. Their recovery was fairly general in the last two sessions. It re- flected the success of the reparations loan, which climbed back close to its offering price of 90 on the London market, after dropping at one time to a 4Y; per cent discount. There was heavy trading in the new German 5';s at the offering level in New York, especially on Thursday, which was pay- ment day. Bolivia is in"the midst of political disturbances, but speculative buying of her bonds, which ‘were all selling on a 10 per cent yield basis, forced a re- covery of 2 to 3 points. ‘What is likely to help outstanding foreign loans is the current official re- straint placed on new issues. This, in some dergee, is prompted by a deter- nimation to distribute the reparations bonds in a satisfactory manner, and in a measure by a paternal official pro- tection designed to prevent a repeti- tion of last Fall's debacle, when foreign credits slumped without apparent re- sistance. (Copyright, 1930.) MORE STOCKHOLDERS. Stockholders of Paramount-Publix Corporation on June 5, 1930, numbered 16,486, a_ new high record, comparing with 13,731 on March 7, 1930, and 855 in_June, 192 that follow in the wake of innovations affecting the serenity of community life. “Let me repeat I have boundless faith in the future of American business and American banking. With such vast un- developed resoutces, such unlimited pos- sibilities in creative fields, we have only begun to unfold the vision that will be the heritage of coming generations. What the past half century has wit- nessed will in no wise comparg with rmrzn 50 years hence.. A momentary ull in industry, such as we recently have had, gives us added experience and wisdom, we hope, ‘to face the battles of the future,” Mr. Lonsdale concluded. Heard in Financial District. ‘The Federal-American Co. . is paying, July 1, its quarterly dividend the. preferred regular of $1.50 per share on stock and 30 shortly from .a motor tour of New - ‘William Montgoniery, president of the Acacia lluulmli Life Association, is it frigerating & Warehousing Corporation have declared th: regular semi-annual dividend of $1.50 per share on the out- stan stock; payable June 30, to stockholders of record on June 28.. James A. Soper, vice ler the Lincoln National Bank, ft Wi last night by motor for Old Me., on his ann vacation. He be away- ahout ‘weeks, " FINANCIAL AND he Sunday Star WASHINGTON, D. C, SUNDAY MORNING IFOREIGN INDUSTRY | FEELS EFFECT OF U 5. STOCK SLUMP Widespread Depression Re- ported in Britain and Con- tinental Europe. GAIN IN UNEMPLOYMENT IS DISTURBING FACTOR French Taxes Shrink—German In- dustrial Peace Confer- ence Fails. Special Dispatch to the Star. NEW YORK, June 28—Cable dis- patches to the Business Week give the following survey of business abroad for | the week ending June 28: Europe.-—Renewal of the Wall Street slump has accentuated the general de- pression in European business, and no immediate rellef is in sight. Prices are! down; uneasiness is widespread. The first issue of reparations bonds was artificially successful in all countries except Holland, where a bankers’ con- sortium was forced to absorb 60 per cent of the Dutch portion of $29,346,000. ‘The International Raw Steel Cartel has concluded its sales agreement with Swiss iron dealers on terms similar to those practically accept~d by the British. Territorial restrictions are stipulated in the agreement, along with cartel minimum prices, and prohibition from buying continental iron outside the cartel. The cartel is now negotiating with Dutch dealers. European nitrate producers have de- cided there will be no restriction on synthetic nitrogen production for home consumption for each adhering country, and that the lowest scale of prices for natfonal consumption wgl prevail, with exports limited to fixed proportions and prices. Prohibition of nitrogen plant | expansion has been agreed in principle, | as well as restriction of output to 40 per | cent or 50 per cent of present volume. Europeans will meet in Paris next week to decide on their agreement with the Chileans. 2 British Slump Continues. Great Britain—Heavy liquidation in reaction to the Wall Street break has | further depressed business. Coal orders have declined and Welsh producers have authorized that production during the September quarter be reduced. Cot- ton prices have dropped, causing un- settlement in the Manchester trade. Official unemployment figures con- tinued to increase last month to 15.3 per cent, compared with 14.6 per cent on ‘April 28, and with 9.7 at the end of May last year, with the cost of living index 54 per cent above 1914, as against 60 per cent a vear ags. The govern- ment scheme for the solution of unem- ployment by a special branch of the civil service and the three-party con- ference are regarded unhopefully be- cause the Tories demand tariffs as the first_essential. The - movement is jincreasing in Lancashire to increase the number of looms per worker from four to eight. No actual trade union restrictions pre- vent, but workers fear increased unem- ployment. The eight-loom system would decrease employers’ wage costs nearly 20 per cent. At present, only one-half of the 700,000 looms are running. French Taxes Decline. France—Business indicators this week confirmed earlier forecasts of an in- ciplent crisis. ‘Tax receipts for April and May, first two months of the fiscal year, were down $20,000,000 over iast year. May imports dropped $14,500,000. exports $6,000,000 below April totals; compared with May last year, imports were down $38,000,000, exports $9.200,- 000. Railway receipts and car loadings are declining steadily, receipts for the first week in June being down 6% per cent over last year, 1 per cent below the previous week. There is a pro- nounced tendency toward a slow down of domestic and foreign trade. As = result of Mussolini's warlike spéeches, France is planning to spend immediately $40,000,000 for modern military 'equipment and complete re- organization along the Italian frontier, aside from the reguiar defense ex- penditures. _Parliament will dlsc\lu.i shortly the $700.000,000 national equip- ment program, hailed as the only prac- tical means of maintaining normal activity. Situation in Germany. Germany—General business stagna- tion, accentuated by the financial dead- lock in the government, is the keynote of business this week. The monthly report of the Deutsche Bank Disconto Gesellschaft is surprisingly pessimistic, prophesying dsepening depression as a result of the financial mismanagement in {he country and unabated capital stringency. Moldenhauer's resignation is indica- tive of the seriousness of the situation, and Bruening's efforts to find a suc- cessor have sc; nm without success, all parties refus assume respon- sibility for the ill-fated ministry. The position is aggravated by the fact that Bruening is sticking-to the emergency tax to be levied on the salaried classes, though the plan has been rejected by a majority in the Reichstag. Business is unanimous in the belief that only drastic reductions in public expend- itures by ‘a flnance minister invested with dictatorial power can save the situation. Because the industrial peace confer- ence between employers and labor has failed to arrive at any general agree- ment, it has nominated trade commit® price and wage reductions in single industries. .In the meantime, the per- centage of unemployed members in the building trade unions has reached 38 per cent against 11 per cent in 1929, NORFOLK & WESTERN R. R. TO BUILD 500 CARS Spectal Dispatch to The Star. June 28-—The nounced <500 additional new, all-steel 50-ton mer- chandise box cars at its Roanoke, Va., shops. Material will be assembied in the near future and active col ction is expected to, be started the latter part of August. / In making the announcement, officials of the railroad stressed the fact that, in building the cars in the Roanoke sl the railroad is following a policy ed to .give as consistent employ- nm’t as possible to its forces. U. 8. TAX RECEIPTS, 1 for June Siaingt $SABITAAE for coresman ga period of 1039, according-to the Treas-- ury Departmente ; th | tees to consider concrete proposals for | Business News in Retrospect Intangible Tax Returns Must Be Filed by District Resi- dents During the Month of Jily or Dendlis SN Follow. BY I A. FLEMING. A penalty will follow: neglect to file returns on one’s intangible taxes dur- ing the month of July, the new period for reportin Returns must be based on market values as of July 1, with payment of the first half in September and of the second half in March. Heretofore returns were fixed upon value of in- tangibles as of Jan- .uary .1 of each year. It has dawn- ed on the tax de- partment or some one else that with reports on the for- mer date every dollar of corporate interest, bank in- terest, dividends on stocks held, etc., was lost as taxable cash. This fact L A Flemins. | s been patent to | the rank and file of taxpayers for many ears. 4 Corporations get their checks into the i mails on the afternoon of December 31. ‘There being no deliveries on January 1, or other holidays, checks or drafts would not reach their destinations until the morning of January 2, too late to be reported. ‘When July falls on Sunday the situ- ation will be just the same. January 1 and July 1 are the big disbursemen days of the year. The intangible tax remains unchanged at one- f of 1 per cent, 5-10 in the language of the law. Personal tax returns and payment thereon should be made as of July 1, with payments in September and March. Payments must be made on moneys in bank, with an exemption of $500 if deposited in savings banks. ‘There will be many an extra dollar paid on intangible tax account from savings deposits, for many disgusted in- vestors have taken their losses and are waiting the time when there is en- couragement to buy again! ‘There was a time, some years ago, when the bankers would wait on the Secretary of the Treasury and plead for a redeposit of millions of tax money with the city banks at a rate of interest of 2 per cent. The war stopped this and the practice has not been renewed. On the contrary, the banks would like to let the Government have a few millions at the same rate. Two per cent is all they can get on call in New York and banks outside of New York have to pay placing banks one-half of 1 per cent. * Reduced Interest Rates. The New York Clearing House As- cociation has reduced interest rates aid to depositors, xometmnt that local nks may have to undertake soon. ‘While the banks of the cities are not enjoying a prosperous year they are in a much stronger potition, financially, than they were a year ago. On the recovery in the early months of the year in the stock list they unloaded their load of stocks held over from last Fall, absorbing partial losses, in anticipation of increasing dullness in trade and heavier declines in values. Vaults are loaded with customers’ funds and the bond accounts of member banks with |* their Federal Reserve Banks have been heavily credited with Fourth Liberty ioan 414s. So urgent has been the demand for Liberties that they are gen- erally selling at premium. The position of the larger banks of the country, and this includes our own institutions, is so strong that it is in itself an insurance that no honestly conducted bank of any importance is at all likely to add the weight of a danger- ous collapse to the present pressure on investments. Patience Severely Tried. Investors who own their securities, in common with margin traders, are having their patience severely tried day after day as lower levels are reached and the bears hammer away. Not only on Well Street but on every stock ex- change in the country. ‘Washington investors have been hard hit. Good old Capital Traction ‘that formerly sold high above par is down in the dust of a 59. It is now about 17 years since W. B. Hibbs made friehds of the Stock Ex- change go wild with predictions that Railway common would cross Capital Traction in price. It was at a time when there was nearly 75 points dif- ference between the value of the two stocks, Traction selling about 130, but | Hibbs maintained his position and won out eventually. It was at the time when the broker was pushing the Washington Utilities Co., planned to bring about the unifi- cation of local utilities, but killed, very young, by former Senator La Follette. Comparison Is Wrong. It is entirely unjust to compare earnings of industrial corporations, rail- ways, etc., for present weeks and months with corresponding earnings for the same periods in 1929. It is possible that many concerns that find their net earnings off in com- -parison ‘with '29, a banner year, may find that a '28 comparison would dem- onstrate that business' was fair after all. May Check Short Selling. An effort will be made in Congress before very long to chéck short selling. If the law-makers are successful, the move will be hailed by tired, worried and disgusted tens of thousands, al- though it would seem to be only fair to even matters by limiting the bulls when they get too enthusiastic. It is perhaps a pity that the gen- eral public doesn’t know anything about the science of selling. securities that they do not own NEW YORK BANK STOCKS NEW YORK, June 28 (Special).— Moderate. activity and a late rally to- day enabled bank stocks and trust shares to close at their highest levels - Chase National at 120 was up 5%, Central Hanover, 326, up 4; Chat Phenix, 99, off 1; Chel Commercial, 380, 1; Bankers’ Trust, 136, 46%, up %; Manhattan, Manuf 90, ‘Trust, 224, up 5; Bank of America, 100, up 5; Continental, 27, up 1; First Na- tional, 4550, up ‘zs: Nation: up 3; ts, 13%, off %, and Guaran Trum‘bt. 605, up 23. 'l%'he following . uncl : Bank of United States, 41; Brooklyn Trust, 675; Public, 101. McCRORY DIVIDENDS. 3 STOCKS SUBJECTED 10 HEAVY SELLING INWEEKS TRADING Many Issues Approach Low Levels of November and Some Decline Further. REACTION DURING MONTH HAS DEPRESSED TRADE Wavering Character of Market Impairs Confidence in Financial Circles. BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, June 28.—This has| been another trying week for those who own securities, for the business man who makes his commitments on the basis of commodity prices and for the institutional group whose chief profits are derived from the lending of money. | Stocks have several times recently approach the low average of last No- vmber and then have moved away from this danger point, thougn indiviiual shares in considerable numbers have gone through it. Leading commodities have decliped still further and to a level where production costs are well | above marketing values. Call money rates, rates for long-term loans and barikers' bills are available to the bor- | rower on the easiest terms in many years. The rate on deposits in the New York clearing house banks has been reduced to a figure that ought to shift capital from them into the investment market. ‘The fact that this has not occurred on a scale sufficlent to steady bonds, which are back to about the low aver- age of last January, is one of the mys- tifying elements in the present be-| wildering situation. Bears in the Saddle. Unquestionably the reaction in! stocks this month has had the effect of making a poor business condition worse. Except for the ordinary seasonal im- provement, trade is relatively slower than it was six weeks ago. The shrink- age in the quoted values of securities | has caused a considerable amount of concellation of orders and has intensi- fled the spirit of pessimism in the busi- ness and financial world. The country today is in a bearish mood. It is dis- tinctly timid and hesitates to make commitments, even though it admits| that securities are below their intrinsic values and commodities at prices that would yield good profits when later worked up into manufactured goods. On a lesser scale than in 1921 buyers are on a strike. The fact that there is such a wide margin between retail prices and wholesale. prices, with. the one group adjusting itself slowly to the decline in the osher, accounts for some part of this. Where there is an in- crease over last year in the volume of retail transactions, it appears to be in articles of a moderate average price. This tends to offset the decrease in demand for more expensive items. Banks’ Position Strong. The saving health in the situation is the liquid position of the banks and of stock exchange houses, along with great ease in money and the apparent ability of people with reduced incomes to go along without much change in their habits, owing to the reserves in the form of securities, bank deposits or life insurance which they have set up in the past 10 years. Practically all of the important bank- ing faflures throughout the country since last November have been due to some form of dishonesty by employes or officials, or were a sequel to the real estate inflation in Florida. The small number of stock exchange suspensions attests to the reserve strength of the membership that has witnessed the most violent shrinkage in values in any nine-month period on record. Here again such troubles as have arisen have been caused by inside speculations more than by the fall in prices. (Copyright, 1930.) AUTO SALES PUSHED BY LEADING FIRMS Companies Making Effort to Clear Out Stocks in Dull Season. Special Dispatch to The Star. DETROIT, June 28.—Those automo- bile makers who are continuing their lines without change throughout the Summer season are now applying the spur to sales divisions and distribution outlets, with the aim of sustaining sales volume through the seasonal let-down and against forthcoming new model production likely to give them fresh competition. The results, factory executives say. show an irregular trend, one good week usually being followed by a period that show§ a falling off in quotas that have been set. Although the general condition shows an increasingly “spotty” curve in the rate at which the country is able to ab- sorb new cars, scheduled output is be- ing maintained at prescribed levels, Excluding the lowest-priced divisions, which continue to push the largest vol- ume, it is belleved other factories are managing to keep their distribution slightly ahead of production. This phase is pointed to as the basic indica- tion of strength, together with general action by the companies in conserving cash and us&tya. the ‘Consequen! regular mid-year readjustment covering inventory and 15 | standing ly process, with the course be- yond that, August and September, yet to be forecast. . - (Copyright, 1930 _RATLROAD SHARES CORP. Railroad Shares tios £ mcurpo;‘- n_ reports realized The McCrory Stores Corporation has | eral taxes declared MN‘D"‘ pre took -$1.50. on D August 1 to rmm:y JUNE 29, 1930. Classified Ads Pages 5 to U. S. INDUSTRY ON SOLID BASIS AFTER PERIOD OF UNCERTAINTY BY J. C. ROYLE. ‘The national business Christmas tree of 1929 was stripped of its lights, tinsel and glittering ornaments during the 1930 fiscal year, but the tree itself is still growing, strong, sturdy and healthy. ‘There no_longer is a Santa Claus dis- tributing _presents of big profits. Busi- n e s s throughout the latter part of the fiscal year had to earn its profits. Seldlom Has a year presented such marked contrasts. The third quarter of 1929 saw busi- ness and industry at heights never the country. The fourth quarter of 1929 and the first quarter of 1930 re- vealed business depression which in some lines of endeavor was acute. The 3. C. Royle. ginning of a return to normal condi- tions with prospects for sound indus- trial proeperity to come. Storm Warnings. Indications of,the coming storm were not entirely lacking in the late Summer of 1929. The chief one of these was the weakening of the position of the farmer. The farm population, embrac- ing some 30,000,000 people, who spend over $12,000,000,000 annually, is a basic factor in the commerce, industry and trade of the Nation, and the position of the agricultural communities was undoubtedly weakened at the wind-up of the crop year of 1929, warning that the upward trend could not continue indefinitely and that the pendulum must swing back with equal violence over the same arc on which it had risen. After the break in the stock market there was a sharp curtailment of luxury and semi-luxury buying. All well informed business men expected this, \but they were confident of the essential soundness, of position and maintained their produc- tion and buying schedules over a very considerable period. Then came a decision on the part of many business leaders, including Fed- eral authorities, that the position of the country must be still further fortified. Business men were gathered together and pledged' themselves to maintain production and wages. Labor leaders gave assurances against strikes and de- mands for increased wages. Munici- palities and States and the utility com- panies agreed to carry out tremendous programs of expansion and construc- tion. Half-Hearted Response. Business responded only half-heart- edly to these spurs. Predictions were freely made by outstanding executives in various industries that things would be back on a normal basis within 30, 60 or 90 days. On the other hand, men of, equal prominence forecast many months of depression before normalcy was regained. ‘The full letter of the pledges was not in all cases carried out. [Ness concerns, after all, are in business to make money for their stockholders, and it was found economically unsound to continue heavy production and em- bark on expansions when consumptive demand was not keeping pace. More- over, not a few of the men who had made these promises were without the authority to pledge their companies to such programs. There was, however. a tremendous volume of construction { work undertaken and this unquestion- | ably offered a buttress to the business structure. Then the normal business man com- menced to look instead of to listen. He began to analyze the situation in 2is own industry and in others and to make his plans on a sound economic basis. He discovered that conditions were not as bad as some painted them and not as good as others hoped. Right then conditions in the business world commenced to mend and have grown better steadily if slowlv since the glamour was stripped from the situa- tion and conditions were examined in | the cold light of day instead of under the tricky spotlight of anticipation. Railroad Consolidations. Another disturbing factor was the uncertainty as to the consolidations of the various railroads cf the country. The final announcement of the Inter- state Commerce Commission’s plans for such mergers went far toward reassur- ing the carriers and inducing them_ to continue with programs of expansfon and construction. * . o ‘There is no doubt but that employ- ment from December to April fell off sharply. There are no adequate figures available to any one, as President Hoover has said. The number of men out of work, is variously estimated at between three to five million, but in making these estimates most statisti- cians have overlooked the fact that there is a constant iactor of unem- ployment throughout the country in- cident to the changing of jobs, the sea- sonal demands for workers and volun- tary unemployment. A heartening feature is the fact that throughout this period of slack employment there were few labor disputes and those mostly . jurisdictional, and that wage levels ‘were maintained. New Products Developed. With increased' competition facing ‘them and in the midst of a period of declining profits, the more efficient business men and corporations of the country turned to new methods for in- creasing their revenues. This took che form in ‘miost cases of production and marketing of by-products. Radio man- ufacturers commenced to make refrig- erators; piano makers built mdtor boats; automobile producers turned toward aviation for extra profits, and nearly every line of industry found some method of increasing its gross re- ceipts. This has been known as “the development of overhead units.” There is enough surplus capacity available in most industries to permit of additional pradyction and this additional produc- tion is being used to pay overhead necessitated in the production cf main products. ‘The steel industry has been an out- example of efficiency in man- ent and utilization of labor, ma- ery and sales forces. Consequently steel production has maintained a 'm record hout this trying period , “astounding Automobile Housecleaning. has established an ast ‘The automobile industry, faced at the inning of the depression with a sales resisiance which many considered al- most impossible to overcome, has been cleaning mx The old stock of used cars and new cars in dealers’ hands have been sharply reduced. Sales have geen of extraordin: made before approached | in the bistory of | second quarter of 1930 showed the be- | The furore of speculation also gave | the business | Busi- | House Cleaning Has Accompanied Depres- sion Which Followed Stock Market Panic—Outlook Appears Favorable. effect on affiliated industries, since au- tomobile manufacture consumes a wide variety of lucts. Public-works construction has been of tremendous volume. In late months exceeded that for the correspond- ing period of the last fiscal year and has only now commenced to get into full swing. Perhaps the outstanding feature of the year was the development of the use of natural and manufactured gas. This in jtself was a part of the pro- gram for the use of by-products. The petroleum industry has been in a de- pressed condition. Production was in excess of demand. Efforts to restrict luction were not thoroughly effected ut the petroleum companies turned to the utilization of natu: gas in self- defense. They bullt lines for hun- dreds of miles from $he ofl fields of the Southwest and from some of the California pools to the industrial centers throughout the Natfon. In many cases this was done in conjunction with Fu iic utilities, which already supplied hese centers with gas for cooking and heating purposes. The orders for pipe for these lines were the real stabilizing factor in the steel industry in the first three months of 1930. Electric Power Progress. The progress and profits of the elec- | trical utilities were impressive. Over one hundred billion kilowatt hours of current was sold in the last fiscal year It was notable that the developments of new central stations in this field were largely along the lines of steam- generating plants, which also tended to aid the coal and oil industries. Both coal and oll, however, still remain in an unsound statistical condition, with prices unsatisfactory to producers and production in excess of actual require- | ments. TR Another depressed industry showed | marked improvement as the fiscal year | drew to a close. The awarding of | ocean mail contracts assured the build- | ing of scores of ucean-going vessels, and | shipyards which have been idle for ! years again are humming with industry | | and providing outlet for raw and semi- | finished materials from many other industries. The electrical equipment manufac- turers have never been more busy than | they have during the present fiscal vear and the back logs on their books | todey are fully as heavy as they were before the stock market break. The production of the agricultural implement manufacturers is equally as | impressive, while the producers of ma- chinery are finding excellent markets | ot only at home but in foreign nations. Textile Industries. |, The textile industries, .which have | | been in a depressed state, started put- | ting themselves in a sound position two | years ago. The results of their efforts' | are now apparent, for they are stand- | |ing the depression in a way which | manvy other industries have found im- | | possible. This is especially true of thc | | cotton textiles, which have developed | scores of new uses for cotton fabrics | and have added many by-products to | the line they have made for years. The buying of railroad equipment kept pace with the progress of | other industries. The carriers have had the money to spend, they agreed to | spend it and have kept their word. It is notable that the big roads of the country are putting on improved pas- senger equipment and emphasizing ap- peals for passenger traffic. The bus lines are in better shape than they ever have been because in most instances the lines are now in strong and efficlent | hands instead of being operated in | small units by inadequately financed | concerns, Aviation Hits Air Bumps. Aviation struck the air bumps inci- |dent to the opposition to luxury buy | ltng and production has been curtailed materially so far as the smaller planes are concerned. The development of air | lines, however, has put a premium on the demand for the larger passenger |and express carrying planes. The suc- cessful trips of the Graf Zeppelin ha |led to plans for dirigible lines center- ing in this country. The radio manufacturers woke up the day after the stock market crash with millions of receiving sets on their hands and with strong buyer opposi- tion. By the end of May they had cleared these stocks and were again on a sound production basis. The demand for cigarettes has grown | at the same general pace which it has maintained for the last few years. The increase for the fiscal year amounted to between 11 and 12 per cent in the sale of cigarettes. Sales of cigars improved somewhat, but not in like measure. Prosperity marked the year for many of the amusement industries. The talkie has proved a remarkable success and has brought additional patrons and additional profits to producers, dis- tributors and exhibitors. Life insurance showed a marked gain especially immediately after the stock market break. Real estate was depressed throughout the last nine months of the fiscal year, although the trend toward skyscraper production was unchecked. Rentals were pretty well maintained and sub- urban property showed some activity. Non-ferrous metals suffered severely throughout the fiscal year. Foreign Trade. The entire world was affected to a greater or less degree by the break in stocks in the United States and the following business depression. This re- sulted in a check to foreign trade along some lines although others maintained the standard they had set in previous years without difficulty. The price of rubber slumped dis- astrously for the producer, although it allowed the tire manufacturers to se- cure raw materials at low levels. Coffee slumped badly through over- production in the Central and South 12 EFFECT OF TARIFF ON FOREIGN TRADE 1S HELD DOUBTFUL Question of Creditor Nation Maintaining Protective Policy to Be Tested. INTERNATIONAL;ANK EXPANSION IS POSSIBLE Financier Believes Institution May Function as an Aid to Business, BY JOHN F. SINCLAIR. Special Dispatch to The Star. NEW YORK, June 28.—Sir Henry Thornton’s observation to the Interna- tional Rotary Convention, that in “acute trade rivalry” lies the real dan- gers for future wars, is not a new one, It has besn stated repeatedly in a score of different ways by business men, bankers, labor leaders and radicals. Doubtless, Sir Henry, who is presi- dent .of the Canadian National Rail- roads, and was born in Indiana, naa * the American tariff in mind when he made the statement. The tariff fight is over—for the pres- ent. The shouting and the turmoi] are past. The Hawley-Smoot bill, so ob- Jectionable to many, is now the law of the land, and only time will reveal its_effects. If it works badly, it will affect the pocketbook of American business, and pressure will be used 1o change it. The tariff issue will finally center about the answer to this question: a creditor country, growing more powerful each year, increase, or even mainiain, a protect've tariff, inaugu- rated in pioneer debtor days, without serlous economic 10ss to its people? Answer that question and one has the tariff solution “on ice"! International Bank. Melvin A. Traylor, president of the | First National Bank of Chicago, told the Illinois Bank Association that no one country would be able to control the Bank of International Settlements, be= cause of the provision requiring 56 per cent of its capital stock to be held in equal parts by the seven different coun= tries that originally agreed to the plan. As to the new reparation bond issue, he declared it to be a direct obligation on the German government, “secured by the unconditional part of the annual reparation payments and the tax which is levied on the German rallway sys- tems.” The Chicago banker does not believe that any new issue of these bonds will be offered to the American public “within two years.” The future? Mr. Traylor believes that the Bank™for International Settle- ments may eventually extend its activi- ties to the point where it might enable the various nations to co-operate and avold in the future at Jeast a part of the world-wide business depression which exists at the present time. Dietrich’s Appointment. ‘With the appointment of Dr. Dietrich as German minister of finance the ace card in the almost hopeless task of Chancellor Bruening to keep his cabi- net in office is seen. For the present German cabinet, in an a‘tempt to dras- tically cut expenses and to find new taxes, has found little sympathy and no support from the coalition parties. The appointment of Dr. Dietrich, who now holds the portfolio of economics in the present cabinet will result either in the passage of more vigorous legislation to restrict German expenditures or in the retirement of the present govern- ment from office. Yes—it might mean more than that. A dictatorship in Germany within the next 60 days is not beyond the reaim of possibility. Purchasing Power. Purchasing power shrunk $2,000,000.- 000 during the first six months of 1930 and the cause was unemployment! Still 3,600,000 out of work! This is the estimate of William Green, president of the American Federation of Labor, who predicted a real improve- ment this Fall. “Meanwhile, the Summer months will bring hardships to hundreds of thou- sands of workers who have already been out of work from three to six months, and the low level of workers’ purchasing power will continue to delay business recovery.” No one will question now that unem- ployment delays business recovery! The question i§ whether or not the wage level bullt” up to its present strength by years of work, will suffer by reason of the undue competition of workers for jobs. (Copyright, 1930, by North A paper Alliance.) C. & 0. CUTS EXPE-NSES. The Chesapeake & Ohio effected im- portant operating economies in May. These were largely respohisible for the favorable earnings report for the month. In the face of a $397,881 decline in gross revenues for the month, net operating income showed an increase of $169,945, as compared with the corresponding month last year. merican News- crease. ‘There is every reason to be- lieve, according to Government, officials and ‘economists, that this improvement is destined to continue through the fol- lowing three months. These conservative men do not claim that there will be striking or extraordi- nary improvement or a boom period within that time. They look for. a healthy, steady growth. At the end American countries and those countries were unfavorably affected as a result. Sugar fell to the lowest levels known in' many years owing to inefficient mazketing on the part of the Cuban lucers and extremely heavy #o~ret hout the world. ' Retail Trade Holds Up. Retall trade showed sustained sistance to the XCe luxury chains re- ,653,761 1in sales chain compared with for the corresponding f 1929, department stores quite naturally did not do quite so well since the chains devoted the majority of their sales efforts toward the lower priced goods and commodities. The Future Outlook. As the fiscal closed it became .vldgntlhltmmmmmmm business an of 'the: country were on the "ie .vision and judgment of that time, they believe that the period of depression will have passed and that the following nine months of the 1930-31 fiscal year will show operations and profits of equal volume to those shown in the 1928-29 fiscal Opportunities Open. prices this financier turned holdings into cash and when the break came he went shopping for bargains with $80.000,000 in cash and returned home with half a score of railroads tucked in his kets. This was a_duplication on_ a larger scale of what E. H. Harriman had done in a previous lod of business depression, In ler degrée, such opportunit are offered to eve: man_in the next few nenl provided he has (Coprrizht, 1e0D P