Evening Star Newspaper, December 21, 1930, Page 69

~ WILL SEEK FACTS . Virginia but to every other State in |lative risks. Part 6—10 Pages VIRGINIA BANKERS 0 HELP BUSINESS $tate University to Assist in Study to Benefit Banks and Their Depositors. LARGER PUBLIC SERVICE FINANCIAL AND CLASSIFIED \ he Sunday St WASHINGTON, HARD WORK AND CO-OPERATION URGED AS DEPRESSION CURE Former U. S. Treasurer Also Advises Thrift Policy Among Workers. Sees Foundation of Sounder Prosperity in Present Corrective Period. Special Dispatch to The Star. NEW YORK, December 20.—“I have been through several depressions,” says IS ALSO HELD POSSIBLE Trading on Local Exchange Lively Yesterday—Many Large Concerns Soon to Pay Dividends. BY EDWARD C. STONE. Extended research into banking con- ditions is planned by the Virginia Bankers' Association during 1931, It 18 hoped facts will be unearthed that will be of great value not only to the Union. The search for new bank- ing information is to be conducted by a special committee, which has already been offered the closest possible co- operation by the economic department of the University of Virginia. ‘Thomas C. Boushall, chairman of the committee and president of the Morris Plan Bank of Virginia, has out- lined in the Bankers' Magazine what the committee hopes to accomplish. ‘The research aims include: “1. Research into the history, cause ) and results of all bank failures in Vir- ginia with a view of so presenting these ascertained facts that member banks, their officers and directors may be able to recognize within their present or- ganizations such danger signals as ap- Peared in those banks of the past. ‘Would Also Aid Customers. “2. Dun reports some 2,000 failures every month occurring in the United States. Virginia has its proportion of these failures. Every such failure usu- ally absorbs a part of the profit of some Virginia bank or even some of its sur- plus and sometimes its capital. It is not enough to stop at the causes of failure in banks—research must go on into the causes of failure among the banks’ customers. “3. The first two items of research are directed at the elimination of error. ‘The next item is of like nature and of equally vital essentialness in bank operation. This is the subject of profit bank administration, and here We seem to come into close proximity to the American Bankers' Association efforts, but here, perhaps, is an even better illustration or justification for & bank research effort limited to a re- stricted area such as Virginia. New Legislation Is Possibility. “4. The fourth large subject of bank research promising benefit to the asso- ciation membership is that of ascer- taining from careful study in all parts of the country, abroad, at home and, bly, in other fields what new, fitable services the banks can offer their customers. This study would, of course, be related to existing laws governing State and national banks with a view to recommending intelli- gently such necessary statutory changes as might be required to make possible such new services. The authority of able research would very probably in- sure such legislative action promptly by reason of presenting ascertained facts as opposed to evolved opinion,” Mr. Boushall says. Liberty Bond Drives Recalled. “Interpretations of Federal Reserve Board Policy,” by Benjamin Strong, late governor of the Federal Reserve Bank of New York, a new book, edited by ‘W. Randolph Burgess, deputy governor of the same reserve bank, recalls in a most fascinating way. the enormous financial tasks connected with the va- Jrious Liberty loan issues. The book, published by Harper & Bros., contains speeches and writings which bear on the policies and decisions connected with the actual establishing of the system. In an address to the four-minute men, Mr. Strong showed an amazing knowledge of the Liberty loan work to be done and the way it should be carried out. In New York the Liberty loan literature had to be printed in 18 different languages. During the third loan, 836,000 people in that city sub- scribed $48.000.000 for $50 and i‘:oo bonds, to be paid for at $1 and §2 a week. On one of the drives, Mr. Strong did some odd figuring on New York’s quota alone, just to show the immensity of the job facing the workers and the banks. He found that the f?)ndfi. if placed on end, would reach from New York to <~Chicago and 1,000 miles beyond. If placed one on top of another, they would have made a pile 2 miles high, weighing 23715 tons. Mr. Strong also was one of the first bankers in the country to stress the idea that the bonds should be sold in small denominations to the greatest number of people possible, rather than by millions to a small group of very rich citizens, Every page in _the book shows how lucky the New York Re- serve Bank was to have a man of Ben- jamin Strong’s ability and energy at ts head during some of the most stren- uous financial days and years the coun- try has ever known. Active Trading on D. C. Exchange. Trading on the Washington Stock + Bxchange Saturday was unusually active, interest being about equally di- vided between stocks and bonds. Fif- teen issues on the local board are now being quoted ex dividends and will make dividend disbursements in a few days. Yesterday's sales follow: Washington Gas 6s “A"—$2,000 at 102, $500 ai 102. Potomac Electric 5'%% pfd—1 at 106%, 10 at 107%, 5 at 10735, Washington Rwy, & Electric pld.—Sl 8t 87%. Federal-American Co. com.—10 at 28%, 10 at 28. Lanston Monotype—10 at 102. Merchants' Transfer & Storage pfd. ~—100 at 931 . Peoples Drug Stores pfd.—2 at 98. Real Estate Mtge. & Guar. pfd.—100 at 6%, 100 at 6%, Merchants’ Transfer & Storage pfd.— Carmi Thompson, ex-Treasurer of the United States, and now a directing head of the Fidelity Investment Association, “and all of them have been cured by the same things—hard work and co- operation. We are now laying the foundation for a far sounder prosperity than we had in 1928 and 1929. “All wealth is built by industry and the leaders, by working hard, make work for others. What we need now is continued willingness on the part of our leaders to work hard; to increase their efforts, and conditions will take care of themselves. “Depressions come when money ceases to mean anything, when people feel that it is so plentiful that they can spend it for anything and take specu- At such times as we had in 1928 and 1929, money came so easily to a great number of people that it blotted out the more important values of life and set them into the-danger- D, 0 SUNDAY MORNING, DECEMBER 21, 1930. Classified Ads Pages 5 to 9 RECOVERY IN STOCK|FOREIGN BUSINESS || Trade Trend and Outlook MARKETS FOLLOWS SHARP LIQUIDATION Selling Climax Last Tuesday CARMI A. THOMPSON. ous channel of pursuing money for money itself, which always ends in un- happiness. “We all want money for the good things it will buy, but the best way to | be dssured of it is to save a regular sum each week out of our earnings and refuse to speculate with these savings. ‘We will thus be assured of a definite income for the time of life when our earning power declines and we wish to devote ourselves to leisure and travel.” Christmas Sales Record Expected To Be Maintained Enormous Demand for Annual Gifts Is Now Reaching Peak. BY J. C. ROYLE. Christmas sales are reaching their peak. That means a volume of activity which will compare most favorably with other years, although the total money spent may fall below record levels. The main factors which are holding up the last-minute burst of buying are the kids—juvenile and adult. Gifts providing recreation and amusement | are being bought in large quantities. Toys are not the flimsy articles they once were. They are being built to last and are bought with the idea that their attraction will be continuous. Wheel goods, metal toys and minia- ture indoor models of outdoor games all have attracted attention. Dolls, of course, have held their own. Whole- sale toy production for the year in this country will probably equal $90,000,- 000, but many toys sold here are im- Gifts for Grown-ups. For the grown-up youngsters the gifts follow a similar if more mature trend. Sports equipment, ranging from wooden golf tees to motor boats, is be- ing selected by thousands of buyers. It is doubtful, sporting goods dealers report, whether so many golf acces- sories ever were purchased in a similar period. Equipment and clothing for tennis, archery, -knnnfi and other sports are adding their full quota to sales totals. In many cities merchants are stress- ing “cellar” games for boys and girls and men and women. The theory is that new heating arrangements have given space for these amusements in quarters hitherto devoted to coal bins and wood piles. Such games include miniature and full sized billiard and pool tables, game tables, air pistol ranges, ping pong tables and similar products. The sale of books for juveniles and grown-ups has been enormous, aided by the cheaper editions and the in- creased number of retail outlets opened to the book trade in the last year. Candy Sales. Officials of the Department of Com- merce estimate that betwen 17 and 18 per cent of the whole year's business of candy dealers will be disposed of this month. This will bring the total whole- sale value of candy products sold for the year to around $315,000,000. The Christmas trade usually necessitates fancy boxes, for the plainer varieties of chocolates and package candies are in less demand than their better dressed relatives. Hard candles for children are selling freely at this time. The sale of nuts will probably bring the total per capita consumption of unshelled varieties to around 10 pounds (Copyright, 1930.) CANADIAN DIVIDEND PAYMENTS HEAVY| December to Set New High Record | for Distribution for Any Month in Year. Special Dispatch to The Star. NEW YORK, December 20.—Divi- | dend payments of $50,260,682 by Canadian corporations and institutions during the month of December will set a new high record for distribution in any month of any year, being $16,000.- 000 in excess of the previous high mark of $34,066,858 created in December of 1929, according to Montreal advices to Pask & Walbridge, members of the New York Stock Exchange. Of this total, $47,112990 is in cash | and the balance represents the 2 per cent stock dividend of Brazilian Light & Traction in lieu of the regular cash quarterly dividend of 50 cents per share. Outstanding in this year's divi- dends is the regular 12!, cents a share bonus of Imperial Oil, calling for more than $16,500,000, which is said to set a new peak for individual payments in the Dominion. The Canadian Pacific Railroad fis making a quarterly distribution of $8.- 326,543. International Nickel's regular 300 at 93, 100 at 93. ‘Washington Rwy. & Elec. pfd.—$2,000 at , $2,000 at 87, $1,000 at 867, $1,000 at 86%, $1,000 at 86%. ‘Washington Gas 4'.5—8$1,000 at 98%. Business Law Still Working. Bupply and demand, the old patient who is found alling badly in every crisis with which we meet, is experienc- ing the same treatment, says the Financial World, that he has had to undergo in similar periods in the past. “Numerous l:ocel:fl spring u.g with especially designed panaceas cure speidlly of his anemia. The pa- :‘t simply has been overfed by over- production at & time when under- consumption ml‘d not permit his fl; ve to function properly. S get over Rion winout long before any oo, ‘and” quarterly dividend on common stock | will amount to $3,500,000. KEEP CARMEN BUSY. Volumtary action of employees of the Chicago Surface Lines has enabled the trans company to keep the same number of trainmen on its pay roll during the business depression as it had during the banner year of its his- tory, Guy A. Richardson, vice president of the lines, announces. the Nation, If it could be induced (which we doubt very much) could Business News m Retrospect Bankers of Nation Face Serious Problem in Pro- tecting Institutional In- vestments and at Same Time Extending a Help- ing Hand to Unfortunate Investors. BY L A. FLEMING. Conditions in the bond markets of the country are far from satisfactory, indeed they are in accord with the de- pression in other securities. Until there is much greater improve- ment in bonds it is not likely that there will be any permanent better- ment in stocks Banks and bank- ers all over the country are carry- ing large amounts of bon acquired at much higher prices and the purchase of these was looked upon at the time they were acquired as the wisest of in- vestments. legal- ized, considered safe and usually sufficiently good to establish “hidden assets” for the ma- jority of banks. “Hidden assets” so called because they do not show in the reports of condition made by bankers, are premiums on bonds, increase in the value of land and buildings over the amounts at which they are carried on_the books. Government securities are, of course, Jjust as safe as ever, and the bank that has a large amount of these has just that much more ready cash available at the instant desired. Railroad bonds, highly regarded in days gone by, for- eign issues and building bonds have suffered severely, none more so than the issues covering buildings, while in. dustrial issues are showing large de- preciation. The last few days there has been some improvement in issues on the New L A. Fleming. York Stock Exchange, Issues having convertible privileges have been fa- vored and issues of foreign countries have shown a steadier tone. ‘The life of a bond salesman today is certainly no more peaceful and prom- ising than that of the drought-farmer, and he is worthy of help—but will not get it from the same source. Bankers' Conference. February 27 and 28 of next year will bring tegether in this city 1,000 bank- ers under auspices of the American Bankers' Association for conference on their troubles and duties, with bank management a leading subject. Delegates will be from State banks of seven adjoining States. ‘Washington bankers will be hosts to the visitors, Robert V. Fleming, presi- dent of the Riggs National, having been named as chairman of a special committee of the local bankers' or- ganization to plan for the entertain- ment of the guests. An exchange of experiences, if the delegates will really dig deep, may develop ways of assisting some delegates. Lot of Banker Hard One. These are strenuous days for the banker. He has his own troubles and, unless he is one of the exceptionally fortunate ones called “hard beiled” who refuses to listen to tales of woe, has no time for the discouraged de- positor seeking advice on what to do with this or that stock, for the banks are filled with actual sufferers from market depression, generally holding on with desperation to this or that group of stocks, heavy losers, seeking to save something from the wreck and anxious for advice. Aside from these numerous cases, bankers have their own troubles—the Same as every one else these days. They have the affairs of the bank to watch, investments to make for the stock- holders expect their dividends and the directors expect the president to pro- duce. In times past this was a com- plrnl:zgly easy undertaking to what a y. How’d you like to manage the invest- ment business of a big life insurance company these days? The Coppers. Officially copper has not sold as low as 8 cents, actually it has. Reports are to the effect that copper stocks are ample for three years and that there 1s actual danger of some producers being forced to close down, which would be a serious dilemma for some of the com- panies. After months of reporting dull depression and lower prices, it woul be a much pleasanter task to write of improvement, of prices, of passing along of the cits in wholesale commodities to the retail buyer but one can see but authorize a bond issue of $1,000,000,000, one of the most recent panaceas suj gested as a tonic for investigation of the law of supply and demand,” the magazine says. i little field for improvement. In the future consumers are likely to receive the benefit of the lower costs of merchandisey 4 » Succeeded by Brisk Price Advances. RAILROAD SECURITIES PROMINENT IN UPSWING Economicgonditions Create Impres- sion That Trade Decline Is Near End. BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, December 20.—The first half of this week witnessed one of the most acute phases of liquidation in se- curities this year. In the second half, markets for both stocks and bonds re- gained their poise, with many members in both groups much higher than last Saturday. It was apparent on Tuesday that the decline was approaching a climax. Liquidation of common stocks and of junior mortgages was of the sort that occurs when investors totally disregard values and are eager to exchange their securities for cash. An accompaniment of all such situations is the sinister rumor concerning the credit of stock exchange houses and financial institu- tions which, though freely passed around and most specific in its details, never seems to be traced to its source and bring proper punishment to its authors. On Wednesday. after total transac- tions for the week had reached 10,000, 000 shares, a lull in the selling ap- peared, followed by one of those swift advances that has occurred at the end of every substantial decline since Oc- tober, 1929. The interpretation of this sudden reversal was that a banker’s pool had stepped into the breach. This was subsequently denied. Automatic Swing Upward. FEELS EFFECTS OF COMMODITY SLUMP Weakness in Prices of Raw Materials Is Reflected in Industry. 'WAVERING CHARACTER OF U. S. MARKET FACTOR Political Situation Also Influences Adverse Tone in Euro- pean Finance. Special Dispatch to The Star. NEW YORK, December 20.—Cable dispatches to The Business Week give the following swift survey of business abroad for the week ending December 20: The surface of business is more ruf- fled by current developments than in many weeks past, but these develop- ments are largely non-European. Apart from political outbreaks and the decla- ration of martial law in Spain, which is of comparatively little international significance, and fresh rumors of an- other bankruptcy imminent in France, the disturbance to business during the week is primarily attributable to the weakness of commodity and stock mar- kets in the United States and to the fear of effects from the drop in silvar_en Far Eastern purchasing power. The reaction to cotton prices is especially unfortunate since the textile industries both in Great Britain and on the Con- tinent already had evidence that only stability of raw material prices was necessary to stimulate demand and permit improvement. Money markets also are becoming uneasy lest the instability of American securities and banking difficulties in Wall Street result in the withdrawal of American credits and balances in Europe. Such withdrawals would both accentuate the incipient tightness—al- ready occasioned by the movement of Evidently the market had been forced | European funds as individual countries down to a point where it offered its own natural resistance to further pres- sure and automatically swung back in the direction opposite to that in which it has been moving for several weeks. In Wall Street vernacular, it had been “sold to a standstill.” Before it rallied it had touched an average about 12 points lower than that of November 10 and was in a prize area about equivalent to that of four years ago. A little thought and study of financial history might have prevented some of those who sacrificed strong dividend- paying stocks and well fortified bonds from doing so during the recent de- cline. It was popular in 1929 to speak of “mob psychology” as the impulse which then prompted the purchase of all kinds of securities at greatly in- flated prices. In the nearby period the owners of securities have acted with the same lack of discrimination. If the 1929 public was too gullible, those who have been active in disposing of their stocks and bonds recently have shown an utter lack of faith in the stability of American corporations. Readjustment Goes Far. It must have been recognized by those who were buying securities from fright- | ened holders that there had been re- adjustment in so many ways to in- flation and overproduction as to justify expectation of an early end to the de- cline. In the first part of this week nearly 50 per cent of the stocks daily traded in on the New York Exchange were quoted below $20 a share. There was a long list of companies whose stocks were selling at market values less than the cash in their treasuries; Jthers below their net quick assets. As an illustration we may take Mack Truck, a widely distributed issue, which has been quoted this week at a price $10 a share below its net current assets and at only 50 per cent of its book value. It yleMs 11 per cent and is on a basis less than 10 times estimated 1930 earnings. In the group of standard railroad shares, whose average price this week has been the lowest in over five years, we find the same disproportion between earnings, prices and yields as in the industrials. The average return on the accepted investment rails reached the unusual figure of about 8 per cent. In a considerable number of issues it ranged between 9 and 12 per cent. Chicago & Northwestern common sold at the lowest price in over 40 years. So did Illinois Central common. Northern Pacific had not been so cheap in 30 years as it was a few days ago. New York Central, Pennsylvania, Baltimore & Ohio and Chesapeake & Ohio were at this same time available at prices well below those ruling when their dividends were 1 to 2 per cent under those now being paid. Conditions Corrected. On the commercial and banking side of the situation there has been abundant evidence in this week’s statistics that many of the unfavorable conditions re- in the past 16 months have been corrected. For in vember just reported indicated a de- cline of 30 per cent from the high point in 1929. They also revealed the fact that they were 5 points lower than at the bottom of the depression in March, 1921. The most recent data on com- modity prices establishes them lower than at any time since 1915, and pig iron prices this week were reported by the trade journals to be lower than in that year. A three-month continuous decline in brokers’ loans amounting to $1,214,000,- 000 has brought them to a point 70 per cent less than in October, 1929, and over 50 per cent smaller than at the end of last April. The Federal Reserve Board reports that member bank borrowings are at the smallest total since 1917. Cotton this week has sold under any price quoted since 1915. And so on. The time has come when all of these effects of a year of depression should be considered in the light of an adjust- ment that was necessary, but that is radually culminating, not as material ’or depressing prices further. The coun- try has certainly not lost all of the wealth which it has stored up'in the past 10 or 15 years, Recovery in Rail Bonds. So far as security markets are con- the most important develop- ments have been the recovery in rail- road bonds and in railroad stocks. Liquidation in the former has been of ater proj ns than. for years. It geudm that between $150,000,000 and $200,000,000 of first and second grade mortgage obligations have come into the Street in the last two months. ars to have been for as for New York banks mobilize their assets for year-end settlement and balance sheet purposes —and aggravate exchgnge oscillations bound to result from these movements of funds which have combined to ren- der the exchange position of sterling difficult. o Deflation Continues. As things now stand, Europe unques- tionably is further advanced toward ultimate deflation than the United States. Among commodities, port stocks in England of zinc, tin and rubber are still heavy. Coal stocks alone, and these virtually only in Germany, show pon- derous excesses comparable to the con- gestion in America of cotton, copper, wheat, sugar and oils, to the coffee glut in Brazil, and to inflated stocks of jute in_India. European security markets, too, hav- ing begun deflation a year before Wall Street, have passed the forced liquida- tion stage, except possibly in France, and now are marking time at or near the bottom awaiting the stimulus of improvement in general conditions. European conditions therefore face less prospect of further local deflation but are dependent on developments else- where and particularly on the ability of the United States to organize progres- sively orderly liquidation of the top- heavy accumulation of raw materials. Unless these can be funded and re- leased only gradually during a period of carefully controlled production, in- ternationally controlled where neces- sary, general recovery appears doomed to wait till the play of free forces of supply and demand complete the defla- tion cycle. Following the break in cotton prices and oscillations. of copper, European prices, which have been showing en- couraging steadniness in recent weeks, ave way to a new decline as holders let go, fearing a fresh wave of deflation, and buyers withdrew to await develop- ments. Tin reacted sharply with cop- per, but zinc and lead suffered relative- ly minor declines. Rubber eased frac- tionally after a considerable period of sustained strength. Wool conspicuous- ly resisted the downward trend. Jute, though irregular, held recent gains. The fall in North Amercian corn, oats and barley is considered unwarranted by the statistical position and is attributed more to psychological than economic causes. First reports of the area sown to grain this Fall in Europe indicate a tendency to reduce acreage where there is a surplus this year. Decision of the Canadian wheat pool to abandon its own selling agencies in Europe and use the customary channels is expected to increase exportability. Security Values Depressed. Disorganization of commodity mar- kets and the weakness in Wall Street have led to depression also in security values throughout Europe, exceptin, the sharp, though probably brief, reco ery in Italy. ristmas currency de- mands and year-end settlement require- ments have tightened credit. It is re- ported this week that the League of Nations will sponsor agricultural recon- struction loans to Eastern European countries similar to the previous inter- national loans to Hungary and Austria. ‘The operation is likely to be carried out through the Dutch General Mort- gage Bank in co-operation with the Swedish match trust, the B. I. S. acting as trustee. ‘The Brussels sugar conference closed this week without settling on a restric- tion program because German delegates would not agree to proposals acceptable to other representatives. A provisional agreement was signed by the other countries and Germany is given until January to join in the pact. A French agricultural loan to Rumania of $24, 000,000, in adiition to the $8,000,000 loaned recently, is under negotiation. Jugoslavia is also negotiating with Paris for a similar amount. Hungary has se- cured a $2,500,000 mortgage loan from |Gy, the Chase National Bank. COFFEE PROBE PLA;INED AT YALE UNIVERSITY Special'Dispatch to The Star. NEW HAVEN, Conn., December 20.— Dr. Robert O. Bengis has just been ap- pointed to the Chase search Fellowship which _Standard recently estab- & Sanborn Re- | & Insurance Company President Considers Unemploy- ment Policies Would Be Only a Pallfative in In- dustrial Depressions—Sees Business Gain. BY EDWARD D. DUFFIELD, President Prudential Insurance Co. of America, as told to J. V. Fitz Gerald. So much discussion regarding unem- ployment insurance is taking place that it might be well to point out that while such relief might minimize the difficul- ties of a situation similar to the one from which we are now emerging, it would be only a valliative and not a cure. Here and there industrial con- cerns have put in forms of unemploy- ment relief to which workers are look- ing for successful future results. Probably many large corporations will work out similar plans in the near fu- ture. The question of having unem- ployment relief funds available for the use of workers in periods of depression is a most important one for the stabil- ization of employment, but it seems to be quite as much of a problem for in- surance companies as it is for industry. Obligation of Companies. While the insurance companies of the | country -might be willing to undertake | the underwriting of policies of this na- ture in co-operation with employers and employes, it must be remembered that life insurance companies have the very definite purpose of providing for finan- cial losses occasioned by death. Their funds are held in trust to meet obli- gations incurred through making such provision. The officials administering these funds are not free agents. They are trustees, and as such they are respon- sible to the policyholders of their com- panies. They can’'t permit their per- sonal opinions or desires to guide their course, no matter how helpful and de- sirable they believe some form of un- employment insurance would prove to the individual worker in times of de- | pression. If life insurance cfficials engage in this new and, to some extent, untried form of protection to the individual worker, they will have to be satisfied that the goal sought can be reached without any loss to their present policy- holders. Therefore, the adoption of any general policy looking to participation by the insurance companies in such a plan presents certain problems that must be given most serious considera- tion. Much more information than is now available would be desirable. Compli- cated tables would need to be prepared | in and analyzed before insurance com- panies in general would be likely to find it desirable to enter this new field. Al- together it presents a rather, difficult task for the statisticians and actuaries. Problem of Industry. Of course, unemployment, with its accompanying evils, is a problem of in- dustry. If a method can be discovered to prevent undue inflation, we are not likely to have periods of depression at intervals. Nor are we, under such con- ditions, likely to have much unemploy- ment beyond that of a seasonal nature. It is the business experience of this country that our periods of greatest ex- pansion and prosperity are followed by widespread speculation. This helps to create inflation, with the result that true values are often lost sight of. Then comes depression, unemployment and hardships to many. Optimism gives way to pessimism. Most often we go from one extreme to the other, and, as a result, recovery is often delayed more than it ought to be. We are inclined to spend too much in periods of high prosperity and pay EDWARD D. DUFFIELD. —A. P. Photo. too little heed to the future. Likewise, some workers, whose incomes have been in no way reduced,. are prone to go to the opposite extreme of near-hoarding in times of depression. Pessimism 1s_hardly justified at the present time. It exists, to be sure, but business men who have been through previous periods of depression are be- ginning to see the signs and symptoms that the bottom has been reached. It seems to me as though we are now pass- ing through the period of liquidation. This means that we are setting our bus- iness house in order and getting ready for the upward climb. At least, that has been the experience in the past, and there is no reason to believe our present situation is any different as to cause, effect and recovery than in other periods of depression. Wage Scales. ‘While there has been considerable unemployment, wage scales have not been materially reduced. Once em- ployment picks up. wage earners will still be on a high level of purchasing power. That should be a prime factor hastening recovery. Surplyses from overproduction are rapidly being cleared out, according to the survey made by the Barnes Com- mittee. This will go a long way toward helping to balance production and con- sumption. Investigating agencies re- port that retailers have been buying from hand to mouth, so to speak, for some months now. Their stock is re- ported as being very low, due to holi- day purchases. Many qualified observers do ot hesi- tate to declare that we have about reached the low price level in com- modities, although price recession in some lines is still evident. If they are ‘correct in their opinion, this can be taken as another indication that we are in_sight of better times. Money is easy at the present time. Nor is there any indication ‘that the immediate future will change the sit- uation. This, too, can be taken as a sign that we are on the way to re. covery. As a matter of fact, I believe that our emergence from the depres- sion that began over a year ago will not be long postponed. It will not be sudden, but it should be steady. TWO BIG RAILROADS IN STEEL MARKET Moves by Pennsy and New York Central Held Highly Impor- tant in Pittsburgh. Special Dispatch to The Star. PITTSBURGH, December 20.—When the tonnage to date in the annual rail- buying movement has been so light it is a distinctly favorable point that the New York Central and the Pennsyl- vania Roads are now both in the market. Most of the roads that have bought have taken smaller tonnage than for- merly, but on the whole with only slight decreases, and the main cause of the lightness of the season total to date is the lateness of buying. In each of the last three years the New York Central bought before the middle of November, but this year the inquiry was issued only last week, while in each of the last three years the Penn- sylvania bought in October, but only issued its inquiry against 1931 rails a couple of days ago. ‘The New York Central's inquiry for 175,000 tons Is only slightly below the system's average in the last three years. ‘The Pennsylvania Railroad's inquiry for rails appears to be for 150,000 "tons positive, with option on 50,000 tons additional. Last year the 310,000 tons reported were ungerstood to involve no option. In an attempt to cast up the gen- eral prospects of the steel trade in the next few months rails and structural steel are two items of particular inter- est. In the case of rails, regularly there is very heavy production in_the first half of the year and very light production in the second half, which of course has been the experience in the last few months. Thus the steel industry has had nothing to lose, as to its general pace, in connection with rails, while it has a chance to gain in that respect in the next few months, and it is clear that it will have quite a gain. (Copyright. 1930.) NEW YORK BANK STOCKS NEW YORK, December 20 (#).— Over-the-counter market. Bank and trust companies’ closing bid and asked prices: Banks. Bid. Asked. America . 59 62 Bank of United States. Bankers ... Brooklyn Trust Central Hanove! Continental ted, lished at Yale University for the in-|ir vestigation of the chemical changes that occur in coffee as it r es. Dr. Bengis will carry out his studies at the Sterling Chemistry Laboratory in New Haven, with the aid of modern coffee roasters, grinders and other apparatus necessary for covering the entire field of coffee chemistry. of the fellowship is to restigation into CHRISTMAS BONUS. NEW YORK, December 20 (Special). —Bancamerica-Blair Corporation an- nounces the distribution of its usual Christmas bonus to its clerical staff. ‘The amount of the bonus depends upon length of service, with a minimum of 5 per cent-gf tie employes' annual GRADUAL RISE SEEN IN AUTO PRODUCTION About 700,000 Cars and Trucks Expected to Be Built Early in 1931. Special Dispatch to The Star. DETROIT, December 20.—With auto- mobile manufacturing scheduled to enter 1931 on a basis of 60 to 70 per cent of normal output, various estimates of what the trend will be next year are being made. The belief is that the first quarter will show a gradual pro- duction rise which will peak up to about 700,000 cars and trucks. With April bringing the return of good driving weather and other favor- able conditions, the forecasters think a spectacular runup to more than 1,- 000,000 may come for the second three months. This calculation takes into account the mounting backlog of de- layed purchasing which, it is figured, will assert itself sooner than anticipated. With the total of automotive vehicles in the country now exceeding 27,000,- 000 in spite of the slump year, replace- ment during 1931 calls for a definite requirement of 3,200,000, or approxi- mately 20 per cent. If only 3,000,000 should be replaced, such retail volume would constitute a fair basis on which the " large producers could maintain operations. Conservatism, with strict budgeting of the volume below retail demands, is continuing in virtually all factories. This means that the prevailing level of 60 per cent or normal is being aintained. Tapering off by some nts that brought their new models out several months ago will be offset by step-ups that others who will in- troduce cars at show time are making to get new floor stocks in the hands of dealers, The General Motors increase in sales to dealers during November, which showed 48,155 cars and trucks, as com- pared with 39,745 in the corresponding month last year, is largely credited to the advancing of the Chevrolet new model program two months ahead of the usual time. (Copyright, 1930.) DIVIDEND OF $27. NEW YORK, December 20 (#).—Di- rectors of the Ann Arbor Railroad to- day declared a dividend of $27 on the common stock and a dividend of $5 on the preferred, both payable December 31 to stock of record December 29. A statement said the dividend is being paid out of surplus. In June the company paid initial dividends of $6 on the commen and $5 on the preferred, both for.the year 1929, ‘The Wabash Railway owns about 98 per cent of the common and preferred stocks of the Ann Arbor. CHICAGO DAIRY MARKET. CHICAGO, December 20 (#).—Butter, receipts, 7,292 tubs; unsettled; creamery extras (92 score), 30; standards (90 score car lots), 28} score), 28a29; 27; seconds, 4,758 cases; firme! , 20a23; ref refrigerator extras; 16%. & r TELEVSION TESTS WL B SUEGES, SAYS ARNSWORTH Transmission of “Talkies” Within One Year Is Prob- ahle, He Declares. BELIEVES ENGINEERS ARE ON RIGHT TRACK Plans Air Pictures of Significant Events Within Two Years. BY JOHN F. SINCLAIR. Special Dispatch to The Star. NEW YORK, December 20.—“The transmission of talking motion pictures within one year is not only possible but probable,” said Philo T. Farns- worth, 3d, the technical head of the Television Laboratories at San Fran- cisco, and the young man whose re- cent researches has stirred up an un- paralleled interest in the subject. “Within two years the picture trans- mission of foot ball games tennis matches, base ball, and other sports activities is just as probable. Vaude- ville skits, where the light is controlled, are possible now. In the field of mo- tion pictures, a ‘pre-view' may be seen in a thousand places at the same time. Motion picture leaders are fully aware of this soon-to-be-taken step.” Mr. Farnsworth, who has been called by the well known radio engineer, Donald K. Lippincott, “one of the 10 greatest mathematical wizards in the world,” is only 24 years old;~and was born on his father's farm in an"indus- trious Mormon colony in South Utah. “I can't remember when I wasn't in- terested in mathemaiics,” said this blue-eyed youth, as we sat discussing this latest’ sensation in science. “It came y—in fact, so easy that I couldn’t understand why so many high school students, so bright in other sub- Jects, were in trouble much of the time over some simple problems—at least, that's the way they appeared to me. In other subjects, I was just an ordi- nary student.” Farnsworth’s Career. After graduating from high school at 17, young Farnsworth entered the Brigham Young University.at Provo, Utah, but left two years later when his father died. “I never liked farming,” he said. “I hated it. I couldn't see anything in it for me, for I was primarily interested in inventions. Wireless television and broadcasting had always intrigued me. Even in high school, I had worked out the new dissector tube'in our television transmission, in,which we perform the inverse operation of the receiving tube, That was in 1921.” He was then 14 years of age. Four-and-a-half years ago, with the financial _support of William H. Crocker, San Francisco banker, the television laboratories were established to enable Mr. Farnsworth to give his {ull time to experimenting in this im- portant field. Now, at 24, he has an- nounced that his design is based “on practical electrical television as against experimental mechanical television.” Therz's a vast difference between these two pdints of view. Mr. Farnsworth explained that the basis of his television invention is an ingenious tube which, “without a mov- ing part, accomplished electrical scan- ning, converting light waves into elec- trical waves and transforming them back again into an image still or mov- ing, after passing from transmitter to receiver through a wire or through space.” Objection to Television. There is no noise, no mechanical parts to interfere and the final picture 1s made by a spray of electrons. The monumental objection to practi- cal television in the past has been the tendency “to hog the air.” The system demanded too much space in the air waves. In other words, televisiof was a good thing to talk about, but not a practical thing. But young Farnsworth was nat discouraged. He has overcome this objection by a distorted signal which is transmitted, and then re- distorted and changed back to its origi- nal form, thereby “widening the band or frequencies to the proper amount.” Sounds technical, but there’s plenty of dynamite and revolution in the state- ment. It means a “new heaven and a new earth” to the television expert. It tells Mr., Average Citizen that television images are now practical and will require frequency bands no wider than are used today in the average broadcasting performance, “Are these new ideas for television original with you?” I asked the youthful inventor. “Not at all,” was the response. “Many people have contributed to make it pos- sible. I think the basic idea in the television receiver comes from the brain of Boris Rosing of Russia, from whom Campbell Swinton of England got it. Alexander McLean Nicholson of the Wired Radio Corporation contributed, too. But it was a theoretical patent, never built. New Transmission. “The transmissjon, however, is my own invention,” he added. “I have told you about the new dissector tube and the way it works. This is to us the big thing; it does the trick. With the technical side out of the way, the busi- ness side of television is the next step. “Will it be possible to attach this sys- tem of television to the regular receiv- ing system of a modern radio?” I asked. “Yes, it will. I think it can be at- tached for a nominal cost, although radios of the near future will be sold with television attachment, for we will witness successful television within 12 months.’ ‘'What about a station to develop television receiving?” was the next question. “Plans for the erection of a television station in the vicinity of New York City, ou a high-powered_frequency, are now being developed. It will furnish this service to the public as soon as the preliminaries are approved by the Fed- eral Radio Commission, who are now giving intense study to the subject.” (Copyright, 1930, by North American Newse paper Alliance.) Freight Line Franchise Sought. BALTIMORE, December 20 (Special). —A franchise for the construction and operation of a double-track freight line linking the Washington, Baltimore & Annapolis Railway with the industrial regions of Fairfield, Curtis Bay and East Brooklyn was introduced in the city council yesterday. It would confer on the Chesapeake & Potomac Railroad Co. rights for that part of the line within the city limits, This concern is a recently formed sub= sidiary of the Wi & sshington, Batimore