Evening Star Newspaper, July 6, 1930, Page 55

News of Markets Pa ges 1 to 4 'FINANCIAL AND CLASSIFIED he Sunday Star Part 6—10 Pages WASHINGTON, D€ UNDAY' MORNING, JULY 6, 1934 Classified Ads Pages Sto 9 1 | ¥ SMALL GAIN SHOW IN-LOANS BY FIFTH RESERVE DISTRICT Borrowings on Stocks and Bends Gain, but All Others Are Lighter. DEPOSITS INCREASED TOTAL OF $7,000,000 Bankruptcies in Washington Area 6 Per Cent Above Number Reported in May, 1929. BY EDWARD C. STONE. Detailed information taken from the monthly review prepared by W. W. Hox- ton, agent of the Federal Reserve Bank of Richmond, shows that from the mid- dle of May to the middle of June the 58 reporting banks in the fifth Federal Reserve district increased their loans on stocks and bonds by $4.901,000, but gecreased all other loans by a net increase in total lo: counts of only $792,000, although de- posits increased about $7,000.000. Total investments in bonds and stocks rose $1,561,000 between May 14 and June 11 and cash in vaults rose $2,544.000 dur- | ing the same period. Aggregate re- | serve balances of the reporting banks at the Federal Reserve Bank of Richmond declined $1.018,000 between May 14 and June 11, little more than a dajly fluc- tuation. Total deposits rose $7.344.000, net demand deposits increasing $1.361,- 000 and time deposits rising $5.983.000. A comparison of the June 11, 1930, figures with those for June 12, 1929, shows some interes amonz them being the marl cline in horrowing at the Reserve bank, which dropped from $24,838.000 last year to only $3,809.000 on June 11 this At the same time the reporting d total loans to their cus 090,000 & drop of $40.- ail other loans much more | ise of $15,093.000 in loans on It is undoubtedly true, Mr. Hoxton gays, that loans on securities do not rep- resent stock exchange or speculative loans to as great a degree as was once | the ca business firms and corpo- | rations as well as individuals borrow | v _commercial purposes on | considerable extent. during the in vaults rose $ Time Deposits Above 1929. Total in Danks in © 174471 on April 30. 1930, 596 on May 31. but on the stood approximately 3 per cent a sit in the came in depor mutual saving stitutions on M. in mutual sav appears to that month ha occurred I the past 11 years. On June il this year| 58 regularly reporting member had time dep: aggregating 285,000, a sum 2.4 per ceni above $24 302,000 reported on May 14, 1930, and| 5.9 per cent above $239.215.000 on June 12, 1929. The time deposit figures for member banks do not all represent sav- ings accounts, however, as do the mu- tual savings bank figures Bankruptcies in the Fifth district in May, 1930, numbered 124, an increase of 6 per cent over 117 failures | in May, 1929. but a smaller number than 130 insolvencies in April this year. | In number of failures, the district rec-| ord for May was better than the na-| tional record, which showed an increase | of 15 per cent in comparison with the | number of failures in May, 1929. Lia-| bilities involved in fifth district failure: Jast month totaled $3.067.805. an in crease of approximately 50 per cent over $2.052,505 reported for May, 1929. but a large decrease under $7,244,020 for April, 1930. ‘Workers Await Construction Jobs. Employment conditions in the fifth yeserve district, Mr. Hoxton continues, | have not improved as much this Spring | as many people expected they would. | There is no very large number of people | out of work at any particular place, but throughout the entire district there are workers in nearly every community who } cannot find employment. The indus- tries of the district, with the exception of tobacco factories, and some of the; £hip vards, are operating below capacity, | and construction work on the whole is | below what micht be called normal for { this season of the year. In some cities | and at least one State in the district | plans for additional building and road | work are shaping up. distinctly improv- ing prospects for additional (‘mploymellt| in the next few months. i Building permits issued in May for| new construction numbered 1,217, com- | pared with 1,539 permits for similar work issued in May. 1929, a decrease this year of 21 per cent. Valuation fig- ures for new work totaled $7,338,786 and $8,943.991 in May last year, a decrease of 18 per cent. Alteration and repair permits also showed lower figures this year for both number and estimated | valuation. Total valuation in May for all classes of work amounted to $9,099.- | 297, compared with $10.790,914 in May, | 1929, a decrease of $1,691,617, or 15.7 | per cent, for the 1930 month. Among the larger cities Baltimore, Charleston, W. Va., and Washington re- ported larger valuation figures this year, but in all three instances the gains were due chiefly to comparatively low figures in May, 1929, rather than to an unusual | amount. of work this year. Norfolk, | Richmond. Charlotte and Winston-Sa- lem reported lower figures than a year earlier, Richmond showing especially small figures for the past month, the/ review concludes. Heard in Financial District. During the past week in the local financial district two new bank presi- dents assumed their duties —John D. Howard at the Seventh Street Savings Bank, and Francis G. Addison, jr., at the Security Savings & Commercial. Francis T. Savage, former local bank president and organizer. has gone abroad for the Summer, Trieste being one of the leading places which he in- tends to visit. The resignation of Peter A. Drury as chairman of the board of the Merchants Bank & Trust Co. takes a prominent figure out of the active banking field. As a director and stockholder, however, he will still manifest a dezp interest in the institution which he founded. G. Bowie Chipman, resident partner of Harriman & Co., has gone to his Summer home, at Calais, Me., to pass July and August. He has a delightful place on the shore of Penobscct Bay. Karl W. Corby, partner in W. B Hibbs & Co., has been added to the beard of trustees of the Columbia Hos- With 000,000 in deposits on the last call, local bank officlals are wishing that call money was 20, per cent instead of 2 per ng | an aggregate gain of over $5,- v | the day relating to business, Reserve | P |80 slow, Close of “Street” Reflected in All Markets of World Special Dispatch to The Star. NEW YORK, July 5.—Wall Street today was one of the quietest places on the continent, as it was on Friday. Its closing down for a day is never without constant reminders, since the foreign dealings, both trade and financial, have become important, Every cabled dispatch to market doings abroad today con- tained some form of the phr: “In the absence of Wall Street's leader- ship, trading was dull and irregular.” The same was true of grain and commodity markets in Car in South America and across the Atlantic. a, Business News in Retrospect Business News of Day Has Little of an Encouraging Character and the Serious World-Trade Slump Con- tinues. BY I A. FLEMING. George Roberts, the economist of the National City Bank, finds little of an encouraging character in the news of indus- domestic n_trade, holds that has been a gene and serious depres- sion in world trade. | “Coming on the high hopes of this ng this newed weal most ing. Not ¢ it meant s a ¢ ¢ umulation losses for sands of i but by vi the market's tradi- tional position as a prophet of industry it has served to weaken public_confidence. “When the depression s paired “the purchasing < great market—the greatest in world—the effects could not fail spread ail over where there are people ly I I A. Fleming. ck and im: power of tl | manufacturing goods for our consump- tion. Our diminiched imports unfavorably on them and con to a fall in prices, resulting in dition of distress in many of these countries, more acute than in the Jnited States, where diversification of | influstry has tended to modify the ex- treme swings of business.” Prospects for Recovery. On this subject Mr. Roberts recalls that time and again there has bcen troubl> in this country of a serious i character; that there have been panics in the security markets, unemployment and business disasters, and that from each of these periods of distress there was certain, sure recovery, so much s that “while they may be recalled they are_virtually forgotten.” The Guaranty Survey. publishe the trust company bearing the title, discusses the “Possible Recovery in Autumn.” o Between the Ist of June and the Ist of September sea- sonable influences do not favor trade revival. Therefore it is reasonable to assume that the Autumn stimulus wiil provide the next opportunity for an upturn.” In an address Banke 1923. when conditions closely resembled oday's situation in business, the late Chauncey Depew said: “Nothing is going to happen to this country. the best in the world, strong financially and every other way, and we should do everything that we can to aid other nations without sacrificing any of our strength in any way.” In view of the actual situation, it would seem the part of wisdom not to try to force recovery to further the op- portunity for the bears to work the market by selling on the bulges, but to dull Summer. before the District strengthen one's position to be in read- iness to take advantage of the turn when it does come. ‘Want Larger Cut in Profits. | resulting closer economic union between BUSINESS ABROAD STLL DEPRESSE, OUTLOOK I POOR Pessimism Dominates Trade View in Every Country in Europe. TONE IN FRANCE IS BEST OF ALL MAJOR NATIONS Finencial Muddle in Germany Has Complicated Situation—Italy Is Unchanged. NEW YORK, July 5.—Cable dis- patches to the Business Week give the following swift survey of business abroad for the week ending July 5: Pessimism dominates the business outlook in almost every country in Europe and no change for the better is in sight. Trade during the Summer | months probably will be written off as | |a total loss. Immediate crop uncer- | taintics in half a dozen countries are having an unfavorable effect on prices | already affected by persistent recession It is felt now that no general economic | recovery is possible before late Autumn, or perhaps, even later. The meeting of the little entente is | | foreseen as the possible commencement | | of a European agricultural cartel with Rumania, Jugoslavia and Hungary. | Czechoslovakia, which has signified par- | ticipation through trade agreements, is | the only industrial country involved. re-| dark, but co-operative plans with the <s is| Chileans are still under discussion. disappoint- | the meantime, the Chileans will enforce | s | cxisting price and sales agreements in W | England and Ireland for another month. ue of | e to | Progress of the negotiations for a | synthetic nitrogen cartel is being kept | i In| The international rail cartel has de- | cided to maintain prices for the third | quarter. Little consideration is given to the possible effects on Far Eastern orders which may result from the con- struction by Japan of a rail plant in Manchu Business Slow in England. Depression continues in Great Britain Stock markets are dull except for trad- ng in gilt-edged securities. After a long conference in London British and Dutch rubber _interest adopted unpublished plans for some | form of restriction which will be sub- mitted at once to the Growers' Associa- tion for approval. Though there is no official announcement, it is rumored among London dealers that the com- mittee will approach the government asking restriction of 25 per cent. Tin producers will suspend production for iwo of ihe next three months, with quarterly limitation to 20 per cent of the 1929 output. This plan will be ef- fective over 70 per cent of the world's tin production. The weck in France has been season- i { remains the best in Europe, although | tinues to be creeping upon industry. | general belief that government officials | ness has settled down to expect | * Cenvention at Hot Springs in | It is | hold on if possible and to| The Federal Reserve System was not | organized as a profit-maker. banks, all operating under the na- tional bank act, contributed the needed cash to furnish the capital for the 12 regional banks. The law provides that Member | they should purchase stock in the re- | gionals up to 6 per cent of their cap- ital and surplus, but so far only 3 per cent of the allotted sum has been called for payment. On this the contributing banks receive interest at the rate of 6 per cent. Is 10 per cent of their demand deposits and 3 per cent of their savings, on which they are not in receipt of any income. These amounts are the legal reserve—a source of dissatisfaction on the part of na- tional banks and probably a reason why some banks give up their charters. All 12 of the regionals are big money- makers. According to the provisions of the law each regional bank shall set aside 10 per cent of its profits annually to surplus account and in ad- dition all other profits shall revert to the bank until a fund of 100 per cent of its capital and surplus shall have been accumulated. Thereafter 10 per cent of the net profits shall accrue to surplus and then all profits shall go to the Government as a franchise tax. Six of the regiona’s have completed They are also ordered to | the accumulation of profits, Chicago, | Richmond, Atlanta, Kansas City, Dallas, | Minneapolis and St. Louis, and it will be but a short time before th: other six will join the list. Member banks have watched these gathering gains with longing eyes. Hav- ing furnished th- capital and the large reserve on which they have not been paid a cent of profit, they see no reason Wwhy the Government should hog it all and are seeking for a way to get it. Already the Government has received so far $147,000,000 in franchis> taxes and is sure to be paid many hundreds of millions more, although the gains of the regionals will fall off this year. M#ny banks have refused to join the reserve system because of th- fact that the banks are not allowed any interest on their reserves. Und:r the national bank act it was pcssible for banks to carry their reserves in banks in reserve cities and Yo draw interest th-reon. Fletcher Bill. b4 The Fletcher measure, introduced by the Senatcr from Florida, provides that after prisent dividends and the comple- tion of the surplus reserves, profits should then be disttibuted to the stock- owning banks. Officials of the Richmond regional have camputed probable payment, pro- vided the distribution is ordered, 6.08 per cent for the Richmond bank, 4 per cent for | The little entente is expected to fol- ally featureless, but the business tone the anticipated depression le con- Controversy over the United States T has completely subsided, apparent- | ly at the realization that French goods are relatively spared, and because of the in Paris are really examining the mat- | ter with a view to taking whatever ac- | tion circumstances may command in | order to maintain adequate protection | of French prosperity. Significant in this connection Is the enthusiastic press | comment concerning Spain’s adhesion | to Briand's memorandum on the eco- nomic federation of Europe, such ad-| hesion being_hailed as characteristic of a new sentiment in European solidar- ity in the face of American imperialism. low Spain's lead, but the attitude of England and Germany is rather re- served. French Are Alarmed. Rhineland evacuation is the week’s| dominant event. While leading French opinion is somewhat alarmed at the political consequences of the restoration of Germany's territorial integrity, espe- cially because of France's military un- preparedness, business and industry are stic in the belief that this conducive to a final rapproache- ment with Germany and resultant close economic co-operation between the two countries. Such opinion, though rea- sonable, is rather hasty because Ger- many will now demand the return of | the Saar Basin as a condition of recon- ciliation. This problem is more eco- nomic than political, because France's ownership of the Saar coal mines is now to be the chief point in the coming | negotiations. Once more in Germany the entire | economic situation is dominated by the hopeless financial muddie which has made it necessary for the third time within a half year to provide cover for the ever-increasing budget deficit. The new finance minisger, Dr. Herman Diet- ( rich, has only slightly modified Molden- hauer's last program. The principal changes are in the emergency tax on St. Louis, 9.21 per cent for Minneapolis, 4.83 per cent for Dallas. Other regionals weuld not cbntribute for scme time. Under this plan $5,252,000 would be | added to the surplus of the regionals, no | franchise tax would be paid and extra | dividends of $1,527.000 would be paid | annually. - Senator Glass has a measure before the Senate that provides that if | enacted it would divide the surplus after | payment of present dividends each year between the member banks and the ?ovemmcm, the latter as a franchise ax. Bankers are hoping that one of these measures will be adopted. They admit that they need help this year, else it i nected. swing, after the adoption of a national | will be one of the thinnest for years. Situation Slightly Better. Perhaps the situation in the business world is a little better, a little less bear- ish. Bonfires on Wall Street have not ! been lighted to celebrate the improve- | g‘le'xtl: as yet, but the tone is fractionally | etter. Bears are not gresslng the market | with the same confidence that they did before they sensed a firmer undertone. Further recessions are probable in the next two months, but there are likely| to be temporary rallies as well. | Local stocks seem to have settled to a | steady price range and a light trading movement. The worst is apparently over. Earnings for June may set Capital Traction back a bit, although it would seem as if the company ould have small trouble maintaining its dividend at the recent cut, 4 per cent, and the yield at current prices for the stock makes it a desirable investment. In common with other industrial corporations, Mergenthaler will probably show lighter earnings, but the position of the corporation is excellent, and the regular 6 per cent dividend may be | the Atlanta, 3.50 Sr cent for counted on. Not the least of the company’'s as- sets were & couple of millions in cash, bills payable, IMMIGRATION BAR HELD.FACTOR TO WORLD SLUMP OF BUSINESS French Journalist Sees American Exportsi Likely to Be Adversely Affected by Closed Doors to International Labor Distribution. BY GERVILLE REACHE. Special Dispatch to The Star. PARIS, July 5—At a time when the United States has millions of unem- ployed, it may seem paradoxical to preoceupy one's self with the question of immigration. But everything is con- ‘The crisis which is in full policy which practically amounts to the exclusion of emigrants, deserves con- sideration. Let us leave aside the social view- point, which, it is true, was most im- portant. It may be said that if immi- gration had been unrestricted, the present number of unemployed in the United States would be higher still, high salaries could not have been main- tained, overproduction would have been more intense, and prices could have fallen even lower. Purchasing Power Not Held. Let us observe in passing that the maintenance of high salaries with closed doors has been insufficient to maintain the purchasing power of 120,- 000,000 consumers to the point of ab- sorbing all production. ~Moreover, it goes against economic laws by main- taining in the United States an artificial dearness, despite the fall in wholesale prices. In the final analysis it ends in a vicious circle; namely, bringing about the necessity of resorting to protection- ism in defense against the so-called low European salaries, the cause of which is precisely due in part to the non-admittance of emigrants. As a matter of fact, immigration re- strictions have contributed much to the business slump and _unemployment which prevail in certain European coun- tries, notably England. The population of the British Isles, | which before the war was reduced by 394 individuals per hundred thousand by means of immigration, is reduced | since the war by 219 only, in spite of financial sacrifices under the empire settlement act: the population of Italy is reduced by 121 instead of 582 etcetera. The greatest falling off has been noted for the territory formerly a part of Austria-Hungary, where im- migration has fallen from 394,000 in 1913 to 60,000 since the war, and in Russia, where it has fallen from 200,000 to a few thousarids. In short, if the universal economic crisis has momentarily solved the prob- lem of circulation and separation of raw materials by overproduction and the reduction of the prices thereof, it aggravates, or at best leaves without solution the problems of circulation of capital and international distribution of labor. France, for example, has a mass of u{mmployed credits and lacks labor in the rural districts as well as in numer- solution, the problems of ckculation of ous industries. France, which is the natural melting pot wherein Latin, Celtic, and Germanic races amal- gamate, is surrounded by nations lack- ing capital and where labor abounds to the point of unemployment, but which export few laborers. ‘The American policy of immigration restriction and super-protectionism, to- gether with the economic crisis, must therefore have for its normal conse- quences the compelling of Europe to copserve its ever-increasing excess of labor, resulting in aggravation of the difference between American and Euro- pean salaries—and an increased con- "mu.s in prices between the two conti- nents. Isolation of U. S. It is evident that American exporta- tion will bear the brunt of this dis- parity in world markets, and the most important consequencé of such a sit- uation must normally be the greater and greater isolation of the United States. As for Europe, either she will elimi- nate her surplus population by new wars caused by the explosion of over- populated countries, or she will be partly supported gratuitously by the United States, which in order to dispose of its surplus production will lend her, with more or less hope of return, the | wherewithal to buy her subsistence and | help for her unemployed. Or_there| |is a third solution: namely, for Europe deliberately to enter on the road of re- distribution of her labor, capital and !her own raw materials, in whihe case she stands up as a very redoubtable rival of American economy. COMMODITIES ARE STILL LOWER ' “AS INDUSTRIAL ACTIVITY DROPS he Associated Press. AUBURNDALE, Mass., July 5—In- | dustrial activity during the past week of supply to demand of not only fin- | reached a new low, falling under the previous low point of last December. The further slowing up which has car- | ried the business volume to around 9 iper cent under normal, has forcefully | modity prices continue to go down hill | affected commodity markets, Last week | for several months after business has recorded another severe decline af- fecting all groups with the exception of building materials- and coarse textiles. Out of 15 individual groups 12 @eclined, 1 remained unchanged and 2 advanced. | Business appears in a resting period pending such time as the surplus over- production of a year ago is worked off Unemployment has increased and pur- chasing power has been further cur: tailed, due to the drastic decline in ag- ricultural products. Conditions in for- eign countries fail to improve. Far East silver is demoralized and prices of principal commodities are the lowest on modern records. Prices of commodities in the Southern K isphere, England and the continent kave continued the downward trend <o | pronounced since last Fall. Sharply lower, prices in_this_country have had an unfavorable efect on business confidence. igns that the alaries to public employes of 2.5 per cent instead of 4 per cen taxation of private employes, a surtax on all incomes exceeding $2,000, which will yield $33.000,000, instead of the earlier schedule to yield $42,000,000: and a reduction of expenditures and minor items from $115,000,000 to $42.- 000,000. The modified program is likely to be accepted reluctantly by a majority in the Reichstag who are now terrified at the prospect of a general election, Dr. Dietrich stresses the importance of carrying out the refunding of the float- ing debt in accordance with the De- cember schedule in order to protect German foreign credit. Financial ex- perts in Berlin question whether Dist- rich’s financial program is adequate; assert that the final deficit of the Fed- eral budget is likely to exceed even the latest official estimates. Negotiations Have Failed. General negotiations between indus- trialists and labor leaders have failed, mainly due to apprehension of the lat- ter to give their consent to a general wage cut because they fear it may strengthen Communist propaganda, pro- claiming trade unions are betraying the working class. Negotiations are expect- ed to be continued by trade groups, but immediate concrete results are doubtful. Following the last cut in the bank rate there has been an abundant sup- ply of domestic call money whieh has caused a reflux of foreign short-terms credits and subsequent adverse move- ment of dollar exchange. The develop- ment is viewed without alarm, consid- ering the Reichsbank’s gold and foreign | exchange plethora .and the pending fresh influx of foreign funds in July dite to the arrival of proceeds from the German quota of Young bonds and her loans. % The industrial situation in Belgium is unimproved. Steel producers are dis- cussing an arrangement with British merchants covering the British market and British merchants are reported to have agreed to obsedve cartel prices and not to encroach on territory re- served to particular cartel members. The situation in the window glass industry is unfavorahle with heavy stocks accumulating, demand weaken- ing, and competition keen. Brokers ob- ject seriously to the formation of the Fourcault combine, but plans are ex- pected to go through as reported. The plate glass market is still strong, due to the strict control of the union in limiting production and maintaining prices. Coal demand is weak and stcoks are accumulating. Business remains unchanged in Italy with no marked improvement expected before Autumn. The May budget shows a credit balance of $5,500,000, thus re- ducing the year's deficit to $6,875,000. It is expected that the budget will be balanced when returns through June 30 can be announced. Resentment over the American tariff is reflected in the speech of M. Turati, Fascist party secretary, at Bologna, and in the increased duty on automobiles of $77 on machines weighing from 700 to 1,200 kilograms, of $85 on those above :l.i:)o kilograms. This trebles the former uty. It has been confirmed in Rome that a credit of $10,000,000 will be opened for three years and guaranteed by the Italian government up to 75 per cent for exporation of Italian products to In the | Hem- | There are definite | secondary reaction in| tead of a | | industrial activity will pave the way for a sounder alignment between the ratio | ished goods, but also raw materials This should not cause an abrupt halt | in the declining commodity price trend. | for in all previous readjustments com- | turned upward. Declines were shown in all comodity prices last week at a panic rate. Since | the first of the year all commodities have declined 11 per cent and are down | nearly 25 per cent from the base year, 11926. Industrial commodities, agri- | cultural products, livestock, textiles and non-ferrous metals showed the greatest decline. ( No_tendency has been shown by in- dustrial prices to slow up in the down- ward move which has been going on for nearly a year. Some inventory loss is inevitable but the situation is in no sense acute. The surplus producing capacity with conservative demand still encourages price concesisons. So far the tendency to reduce prices has not encouraged greater demand. Agricultural Products. These products sagged sharply last week. The world wheat crop promises to equal the adequate volume of a year | ago. North American production will exceed 1,150,000,000 bushels. The carryover is above normal and the action of the Federal Farm Board does not lerd confidence. Price weakness in wheat has affected grains and other foodstuffs. Livestock prices were sharply lower. Cotton, silk, wool and rayon, recorded the sharpest break in all groups. Cot- ton, in particular, ruled weak which was true of finished cotton goods. Silk | reached & new low while rayon and | wool remained stable. There is still | a burdensome surplus of fine textiles. Metal Prices. Led by another break in the copper market to 11!, cents, non-ferrous metal | declined. Price weakness alsc character: ized lead and zinc. A check-up em- phasizes the fact that production has been slow in adjusting itself to the materially lower rate of consumption. Available stocks of all non-ferrous metals continued sharply above average. Most important price changes: Previous week. 8.6 First of 1930, LS 6.0 o7 92’5 96.7 908 919 All commodities Indusirial ... Agricultural Live stock Non-ferrous Textiles, fine.. Vegetable oil: WAR LIQUIDATION G. W. McGarrah and Leon Fraser Doing Their Part With Inter- national Settlements Bank. By Cable to The Star and Chicago Daily ws. PARIS, France, July 5—Two Amer- icans, Gates W. McGarrah, president, and Leon Fraser, Mr. McGarrah's sub- stitute, are doing their part as the heads of the Bank for International Settlements in taking care of the finan- cial part of war liquidation. It is now a month since the repara- tions were removed from politics and placed on a commercial basis. The bank has just issued its first balance sheet, as of June 30, showing the total re- sources at about $200,000,000. The cash is about $1,000,000. The funds are employed as follows: On call, about $4,600,000; 15 days, $88,000,000; 16 to 90 days, $5,500,00 For a maximum of 90 days there are acceptances of about $46,600,000; treasury certificates, $52,000,000, ard other short-term placements of about $2,300,000. About $13,600,000 are earn- ing money on more than 90-day paper. Other assets approximate $300,000. Of the authorized 200,000 shares at 2500 Swiss francs each (about $487), 164,000 have been issued. Thirty millions of dollars havc been deposited on ac- count for an annuity trust. The Ger- man government deposit 1is over $24,000,000. ‘The sight deposits are $22,000,000 from the central banks and $30,000,000 deposited by the central banks for others, and $500,000 for other depositors. ‘The bank still has $8’ ,000,000 as un- distributed proceeds of the recent Yo loan. The :n.nk has other liabilities about $360,000. (Copyright, 1930.) MOVES IN MARKE ARE UNIMPORTANT BEFORE HOLIDAY Liquidation Absent in Week’s Dealings—Dividend Pay- ments Increase. MONEY RATES LOWERED TO ABNORMAL LEVELS Violent Deflation Reflected Many Factors—Commodity Prices Show Big Decline. in BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, July 5.—Such markets as have been witnessed this week are to be expected before a holiday period and especially at the beginning of the vacation season and at a time of the year down. Transactions on the Stock Exchange have been in small volume, with move- ments of prices of little significance and still reflecting the bearish disposi- tion of the professional element, which contributes most to them, and the timidity of the public body of investors. One good sign has been the slow im- provement in the bond market, which has worked up consistently day by day after duplicating, at the end of June, its low average for the year made six months previously. when industry normally slows Liquidation has been absent in this week's transactions. The number of new low prices for stocks has daily diminished. Special issues have been affected by special causes, such as poor statements of earnings or dividend re- ductions or anticipation of less favor- able news for stockholders during July. All in all, these conditions appear to have been quite well discounted for the time being. More attention is now being given to the effects on high-grade securities, of the vast amount of income money available for investment and the yields on stocks whose dividend pay- ments are not likely to be disturbed. Dividend Figures Rise. Figures of the six months' dividend payments by American corporations re- veal the momentum of the last two years of business prosperity. Although more than 400 dividends were omitted or lowered in the half year, there was an increase in dividend payments over | the same six months in 1929 of $329,- 000,000, or 15 per cent, and of $818. 000,000. or 50 per cent, over 1928. Altogether, approximately $2,500,000,- 000 was distributed to the owners of American corporations in the January- June period. It is a fair assumption that a considerable portion of this amount has been. employed in the pur- chase of securities or ‘has added to the deposits of the savings banks. As stocks have declined and money rates have dropped to abnormally low levels, the return on dividend-paying securities has increased and the margin between this return and the money rate has rapidly expanded. This is always one of the basic influences mak- ing for a stabilized investment ma: ket. It may be a minor factor toda but it has helped to absorb the flow of long stocks into the market and, there- by, modified the shock of heavy liquida- tion. A study of the relation between yields of money and yields on stocks indicates that it is today more favorable 10 the investor than since 1924, the year remembered as inaugurating ‘the bull mark which terminated last No- vember. Intensity of Deflation. Some of the outstanding incidents of the Week having a bearing on what has happened in the stock market and in the business world, and also giving a clue to what may be revealed later on, are: A further decline of com- modity prices, lower pig iron produc- tion, a higher percentage of decrease in railroad car loadings, additional re- ductions in the Federal ‘Reserve Bank rediscount rates, a shrinkage in Wall Street loans in June as indicated by the New York Stock Exchange figures of more than $1,000.000,000, and a drop in brokers' loans this week to $197.000,000, or a total of $882,000,000 in the past four weeks. In point of intensity, de- flation in various forms in the last eight months approaches the records of other years. In the last half century there have been six major declines in business and in securities. They were in the years 1883, 1893, 1903, 1907, 1921 and 1930. In some respects the one through which we are now passing is as violent as the others. Judgment on its ultimate effects and its chief causes must be postponed until after it has terminated. ‘The features of the earlier declines are of current interest and permit of an interpretation of present events and, to some extent, allow of deductions re- garding the possible length of the ex- isting depression. The facts given be- low are from a study of the business recovery following depressions, made by Col. Leonard B. Ayres in 1922, One of the strongest arguments pre- sented in proof that the depression, which began iast August and is now approaching a year’s duration, is termi- nating, is that past panics have run their course in about 12 months. In some instances the recovery has been followed by a secondary reaction, as in 1896, following the rebound in 1895 from the low point reached in 1894. As a rule, however, once improvement has set in it has been rapid. Its collateral ef- fects have been important to securities and to interest rates. Perpendicular Drop in 1893. From the peak in the middle of 1883 there was a gradual decline until Janu- ary of 1885. Then occurred a recovery of moderate proportions and a slight reactionary movement, which ended in Autumn. From that point there was a striking rebound from a basic line of about 80 toward the end of 1885 to one of 140 a year later. ‘The depression of 1893 is represented on charts as of an aimost perpendicular character. The low point of it was reached in October and was followed by an aprupt recovery into the middle of 1804. Another decline well below that of 1893 followed, with a rise to the end of 1895, represented by the change from a basic line of about 45 to one of 145. ‘The violence of this recovery had much to do with the secondary reaction in 1896, when business went back to about the basis of the Summer of 1894. . The depression of 1903 was of shorter duration and less violent than that in the two previous periods. It began in the Spring of that year and reached its low point at the year end, followed by a recovery and then a second less ex- treme dip in the Summer of 1904, Sub- sequently there was a steady expansion until business and finance were dis- turbed by the banking panic of 1907. This ‘was also another instance of an abrupt decline, with business affected by serious_credit conditions. It did not last long. In the Summer of 1908 the f¢ of the had Kemmerer, Known As ‘Money Doctor, To Aid Colombia Special Dispatch to The Star. NEW YORK, July 5.—Dr. Edwin W. Kemmerer, who has been named to head the commission to Colombia which leaves in August to overhaul the finances of the South American republic, is widely known as the “money doctor.” Dr. Kemmerer has just returned after a year in China, where he served as financial adviser to the Nationalist government. Meanwhile he is spending a few days of rest with his family in Maine. Besides serving as an expert with the Dawes Reparations Commission, the Princeton economist has been connected with the financial reor- ganization or currency stabilization in the following countries: Philip- pines, Egypt, Poland, South Africa, Mexico, Guatemala, Bolivia, Ecuador, Chile and Colombia once before. STATUS OF MARKET STLL UNGERTA Traders Are Taking Long Fourth Holiday With Their Fingers Crossed. 9 By the Associated Press, NEW YORK, July 5.—The stock mar- ket is taking its Fourth of July vaca- tion with fingers crossed. Many astute observers believe that further tests of present levels are to be made in the weeks just ahead, and although all but the frreconcilable bears are ex- pressing hope that the recent lows will not be punctured by fresh selling, few are willing to commit themselves to definite forecasts. In short, the situa- tion 1s still regarded s uncertain. Trading this week has been mos professional and at all times quiet Spasmodic efforts to mark stocks down met with rather impressive resistance, and the smaller short interests were satisfied to cover on the other hand, profit taking quickly followed the rallies. However, with the market duller than in two years, operation in either di- rection were insignificant and it is toward the next fortnight that all eyes are turned. Bears Have Plans. There are reports that strenuous efforts will be exerted to break prices through the lows of last November. Unfavor- able second quarter earnings, the in- stability of commodity prices and the sagging trade indices are cited as weapons with which the bear element is likely to arm fitself. In addition, there is apathy of the investing public. Investment buying is doubtless increas- ing, but most of the support from that quarter seems to be awaiting confirma- tion of scattered assurances that the market has struck bottom. Despite the quiet confidence of man:; bears, the other side is not defenseless. One of its strongest weapons is the enormous extent of liquidation during June. Stocks, it is pointed out, have passed from weak hands into strong, as was evinced by the June decrease of more than a billion dollars in stock 2xchange members' borrowings on secur- ity collateral. Also for two consecutive weeks the commercial loan total reported by Fed- eral Reserve members banks has shown 1o $170,000,000. It is impossible to dis- cern a definite trend in so short a time, but a continuation of this upward movement would be interpreted as a sign of increasmg business activity. Furthermore, banks investments are !s gaining and are up nearly $600,- 1000,000 since February. ‘This, it 1s pointed out. must ultimately help the bond market, and at present a strong bond market would be warmly wel- comed by the financial community, A rather definite advance was made by fixed income Securities this week. Grain Market Trregular, ‘The grain markets were highly ir- regular, opinion on the long-term pros- pect in wheat seemed fo be bearish, with attention directed particularly to the increasing competition in produc- tion from abroad. The Department of Agriculture pointed out that adjust- ments in acreage were necessary if American growers were to profit in the next few years and added that world wheat prices over the next seven-year period would average considerably lower than the last seven. Standard Sta- tistics Co. placed the hypothetical value of this year's crop, on the basis of tentative estimates, at about 20 per cent below that of 1929, amounting to a de- crease in money of $189,000,000. This analysis also said, in connection with the short-term outlook, that improve- ment in export demand and resumption of Farm Board activities “should result n an average price level during the next few monihs at least equivalent to that now prevailing.” ‘The stock market as always, is closely watching the steel industry for signs of a revival which so far have been lack- ing. Some experts suggested that the holiday shut-downs affecting many plants would tend to move stocks of materials, thereby stimulating pur- chases. In view of th: week-end lay- off, next week's steel ingot production figures are expected %0 show a sharp decrea: and an upward movement had started which continued, with occasional inter- ) ruptions, for about five years. It ended with the preliminary symptoms of the war, with the low point reached at the end of 1914, coincident with the reopen- ing of the stock exchanges, which had been closed in the previous August. Movements of Securities. The next major depression was that of 1921, which was an aftermath of the war and of the tremendous speculation in _commoditics. From the Autumn of 1920 until the Summer of 1921 the basic line showed a drop from about 145 to 40. At the end of about nine months recovery st in and was of rapid and substantial character In all of these depressions movements of securities were naturally regulated by business conditions. 1In the 1883 panic the high point for bonds was reached 14 months after the low point of pig iron production and for stocks two years from that date. In the 1893 depression these conditions were practically dupli- cated, and the same is true of 1903 and 1907. It is also interesting to note that interest rates remained low long after industrial activity had begun and that the general length of the low interest period was from one year to one and one-half years after the bottom of the business depression had been reached. As deductions regarding all of the panic periods were based to a consider- able extent on the fall in pig iron gx;o- duction, which was taken as the best index of industrial reaction, it is of in- terest to note that for the first six months of this year the output of pig iron is off 16 per cent from 1929, or less than in other eras of troubles. an increase amounting in the fortaight | ‘SOVIET BIG BUYER OF AMERICAN G00DS FORPLANTS, FARMS i | New York Agent Thinks More Would Be Bought in U. S. With More Credit. CONSUMPTION OF GOODS IS HEALTHY TRADE SIGN Banker Expects Present Business Ills to Be Ironed Out Before Many Months, BY JOHN F. SINCLAIR, The Soviet Republic is one vern= ment that does not rocngmzzmhfld lm;vst, nLAlN!.fL l'éol officially. eter A. Bogdanov, chairman o Amtorg Trading Corporation, p&rss'fxr:; on purchasing contracts for millions of agricultural and industrial machinery {‘lgl::mlhte‘ Umu‘? nSlal(’s for use in sia, 1S one of the N("‘;‘ z"ork Pl busiest men in igh up in his Fifth avenue y= scraper office, this bewiskered S:\kx)et Tepresentative spends his hours meet- ing some of the big business leaders, Who hope to sell the Soviet representa- tive more and still more millions of g{zgifiu“{;flh OlfAmrrlcnn-made goods. e conferenc — withi Bes e, e after another. After office hours, he rides horse- back in_the park, plays tennis and walks. By profession a civil engineer, his six months’ sojourn in the United States already has impressed him with the immense drive and pow - bl g power of Ameri While England sold to the Soviet government approximately $44.000,000 worth of goods in 1929, the bill of goods from the United States was about three times as much. From the Soviet government stand- point, being chairman of the Amtorg Trading Corporation of New York is the most important “commercial” pos tion a Soviet representative can fi outside of the Soviet cabinet. “Russia_wouid buy even more from the United States.” said Mr. Bogdanov, “if American banks were willing to ex- tend more credit. But until that time we must be content to do less business than we otherwise could.” Expects Business Pickup. Dr. W. Randolph Burgess, deputy governor of the Federal Reserve Bank of New York, b-lieves that improve- ment in the business activity may be expected before many months. While the present depression is the most severe since 1921, Dr. Burgess doés not believe that there is any clear evi- dence yet that the recession has come to an end. “Two important facts may, however, bz noted about the recession. First, that the actual decline in the volume of { business activity is nothing like as se- vere as might assumed from much of the public discussion. The decrease in business since May of last year has been about 12 per cent. “The second important fact about the recession is that while production is considerably depressed, consumption is very little depressed.” Then this New York banker made this thoughtful statement: “The continuation of the consumption of goods at a fairly even pace 120.000,000 people requires a continual flow of goods from the wholesaler to the consumer and from the producer to the wholesaler, and this gives us as- surance that just as in former times the economic maladjustments of this period will be ironed out before many months have elapsed.” Exactly! This is the crux of the whole matter. The prime element, how- | ever, as to just when consumption will catch up with overproduction—used in the popular sense—is 8ll that stands in the way of saying just when business recovery will begin. Canada Will Borrow. Canada, one of the world's richest nations, with a per capita income near the very top, and with her latent re- sources almost untouched, will soon be a borrower in the New York market, A low rate of interest is certain. Charles Stewart, Canadian minister of the interior, estimates that in 1927 the national wealth, exclusive of unde- veloped natural resources, was a little more than $27.500,000,000. Against that must be placed her national debt at a little less than $2,250,000,060. Canada’s internal finances now are in excellent shape. For the last fiscal year the government's income amounted to $447,000.000 and her outgo or ex- penses $402,000,000, thus closing the year with a surplus of $45,000.000. Canada’s fleld crop acreage in West- ern Canada increased over 8,000,000 acres during the last 10 years. “No less impressive has been the advance of hydro-electric development, which in the last 10 years has had the effect of increasing Canada's total waterpower installation by roundly 3,000,000 horsepower,” said Mr. Stewart, “‘Nor can her mining industry, produc- ing over $300.000,000 of new wealth annually, be ignored.” Canada's credit rating should be A A A Hurt Movie Trade. The “Tom Thumb™ golf courses, in many citles, are having an adverse effect on Summer “movie” attendance. Springing up like mushrooms all over the land (Los Angeles County has over 1,600 of them) many of them are reported to be coining money. The tiny golf course. on a vacant city lot, costs from $2,000 to $10.000 to build. ‘A charge of from 20 cents to 50 cents, depending upon the location, is made for one round of golf. It has caught the popular fancy. Some are reported to be earning as high as $500 a day. In California, the Fox West Coast Theaters have definitely decided to lay out a dozen of the courses in order o secure part of the trade. Nothing, on the business side of amusements, been accepted as eagerly as these miniature golf courses. Already there are over 25,000 operating now throughout the United States—and the Summe? has only begun. Easy Credit Losses. ‘Wroe Alderson, chain store specialist in the United States Department of Commerce, says that much of the com- mercial troubles of retail stores is due to “easy credit and bad debts” rather than “inexperience or chain store com- petition.” . Mr. Alderson reports that of 416 stores studied, 30 of them were on the verge of bankruptey directly due to “bad debts and easy credit.” Only 2 of the 30 lald their troubles to “chain store competition.” The report of the Department of Commerce on the subject of chain store and its relation to business should throw plenty of light on merohandising sub- Jects now more or less guessed at. Credit, that dynamite of retail buai- ness, take on a new meaning and a new importance. © (Copyright, 1930.)