Evening Star Newspaper, December 28, 1930, Page 58

FINANCIAL. 'NEW YEAR HOLDS HOPE & 1911 *'""OF SUBSTANTIAL GAIN { Financial Review Shows Prostration Re- sult of Long Illness in Business and Investment Markets. Charles F. Speare. BY CHARLES F. SPEARE. EW YORK, December 27.—This “year’s ' business - depression will be listed in financial history as the most serious since 1893. In 2% some respects it has not had . the acute and_distressing features of . crises. It has, however, affected *the fortunes of a r number of duals ~ than any. . previous ‘ slump, due to the “fact that owner- « ship of securities +has broadened out . tremendously in the past 10 years, _with a shrinkage .in stocks and ' bonds in the last 15 months of un- paralleled size. .. At the end of 1929 the collapse 4n common stocks ‘was held to be the contributing cause of the reaction in industry. A year later emphasis is be- ing given to the over-production - of and commodities, the political disturbances in Europe and South America, the unequal distribution of gold supplies and the various artificial methods employed to counteract the laws of supply and demand as they operate in the fleld of agricultural products, metals, minerals and other raw materials. There are additional factors that now have an influence in | retarding trade and depressing securi- | ties, such as the tariff, increasing competition between steam transporta- tion companies and unregulated car- riers, political prejudice against the new . public utility holding companies, and the frozen condition of banks and investment trusts that expanded their tfolios with real estate and corpora- ml securities and for which there is now only a nominal market. Influence of Foreign Crises. In dividing the year into two parts, 4t may be said that the influences act- ing adversely on business and on se- curities in the first half were mainly of a domestic origin while, in the sec- ond six months, these factors were supplemented, and at times over- shadowed, by such incidents as the revolutions in Peru, Argentina and Brazil, the success of the National So- ‘clalist’ Fascist party in Germany, the critical political and econcmic condi- tions in Great Britain, Spain, Italy and Japan and the constant threat to Sorld trade of “dumping” by Russia. If we accept the figure of $350,000,- ,000 as a correct estimate of the na- al wealth of the United States in 1929, we may say that the equivalent of & 15 per cent reduction in this has oc- eurroxe in securities alone since the stock market touched its high point in ber of that year. This is not an irrecoverable loss, for both stocks and bonds are now selling as much be- Jow their actual values as they were previously above such values. The shrinkage, however, has made the country feel poor, although the actual Joss in income from its securities has been small. The man who owns United States Steel or American Telephone & Tele- h, Atchison, Consolidated Gas, g‘r\‘:mylvmh New York Central, Gen-| ‘eral Electric, General Motors or numer- ous other sound shares, or German, ‘Argentine or Chilean government bonds, the second-grade American railroad tions, has not suffered loss of dividend or interest. +His state of mind, however, as he figures the 12 months' depreciation in his securities, has - tive effect when & buying propo- e Sttt purehasing pover the purc! Pow been seriously cut It will suffer securities remain these profif come and adjusted their standard of living accordingly. At the same time, mechanics and clerical forces were en- gylnz the highest average of wages in eir history. Their purchasing power lkewise increased. With reverse com:lt- | tions, securities dropping instead of ris- ing and losses substituted for gainus, toe public that had been in the market not enly stopped buying luxuries but be- | me abnormally cautious in the mat- | of purchasing necessities. | The rapid drop in employment and . pay rolls, with a scant adjustment in yetall prices to those at wholesale, au- Somatically reduced the movement of goods from the producer to the con- sumer. This was further accentuated the distress in the agricultural sec- =1n| of the country, where the low Jevel of farm products and months drought prevented the buying of any- thing not required for day-to-day needs. Roughly speaking, the average price of several hundred stocks has declined sbout 50 per cent since the high level was established in September, 1920 Prom the peak of last year a list of sbout 40 important commodities indi- eated & drop of 30 per cent to the end of November. This month's average of stocks was the lowest since the Sum- mer of 1927. That of commodities has not been duplicated since 1915, Stabllity in Commodities. *There has recently been rather more evidence of stabilization in commodi- tles than in securities. It may be of no importance, but at least it is of interest that the drop in copper, cot- ton, silk, rubber and wheat has been sbout the same relatively as the aver- #ge decline in stocks. From an inter- national standpoint, the flabby condi- tion of the commodity market has pro- duced greater economic and political disturbances than any other factor. Therefore, slight indication that con- sumption is overtaking production and that means have been found for keep- ing superabundant supplies of commod- mmm th"emm-rket one,of the en- signs of recovery. Thol:‘vlhu bought stocks in the 1920 panic belleved they had secured re- markable bargains. Those who at the same time sold them shortly afterward gelt that they had been foolishly timid. might have held to his views until , for securities slowly advanced and then ‘became buoyant in the Spring as nce in a business recovery, wfl by unfortunate predictions thmr.on and abetted by the exploitation of certain pooled shares on the New York Stock Exchange, carried the a of stocks up 45 points from the low of the previous November. ‘The story of the market for the mext eight months is one of prolonged atidn, resembling Yi%;!, uu{"}:' '.I'lle & ’s panic” in , with only mlm moderate rallies and the averages each time declining below -of the previous slump, and with «Josses in quoted values for in- railroad and public utility 4 size, The final of the line has been asso- distressed selling, growing % enisperine campaign i Wal directed against scores of per- t institutions and private LD it & fortnight ago when the Bank “12 wes closed, involving sum of deposits to be af- suspension here or emergency that devel- | at some time in 1930, felt that the cur- rent level of prices had discounted all of the known or urknown factors in the situation, and therefore, that they | were justified in making purchases for permanent investment. ' A frequent cause of trouble late last yeir and early this year was the shrinkage in the holdings of those who bought stocks too soon in October, 1929. Similar difficul- l'.lu have developed out of the same | misjudgment of the market when it | broke in June and again last October. | This is especially true of the invest- ment trusts and trading corporations and acccunts for the numerous divi- dend suspensions in this group of companies. It has been impossible to measure values by old yardsticks. For months the yield on common stocks has been at an average that, under the best in- vestment traditions, should have prompted purchases. The ratio of price to earnings has dropped from the peak of last year to one that was equally abnormal in the other direction. Numerous _industrial and railroad shares continued to decline after they had touched prices the equivalent of those in years when their dividend and earnings per share were smaller than now and when they had more bonded debt ahead of stock, a smaller profit and loss surplus and larger inventories of raw materials and manufactured goods. It has seemed as though a pub- lic that, in 1928 and 1929, hastened to risk all of its capital in common stocks had, in 1930, gone to the other extreme in demanding that its capital be exclusively in cash or Government securities. Reaction Baffles Economists. Errors of judgment in forecasting the trend of the stock market have been duplicated in the field of commodities and in general industry. Some of them have arisen from attaching too much importance to the collapse in stocks and subsequently ascribing business ills exclusively to it. Eventually it was dis- covered that there were other and more deep-seated reasons. As these have played their part, they have had & tendency to advance the period of probable recovery in securities and in commercial activity further into the fu- ure. Economists have learned this year that, while they could with .consider- able accuracy forecast a reaction, it was not so easy to gauge the duration of it. Working on precedent as to the normal length of a depression, many of them came to the conclusion in September that it was about time busi- ness improvement appeared. We have since had a succession of monthly pre- dictions that the low point in business had been attained and that conditions were on the mend. While such reck- onings were premature in September, they appear to have justification as the ends, though it is still in senti- ment, rather than in statistics, that the change is to be found. Although the severity of the depres- sion and its collateral features seem to resemble those of 1893, it is with 1921 that comparison is most frequently made. In some phases this year's de- cline has been more acute than that of a decade ago. For instance, the index of business activity in November was several points below that reached in March, 1921. There is a long list of commodities, including copper, silver, coffee, sugar and wheat, that have fallen much further. down the price scale than they did in the last depres- sion. The break in commodity aver- ages, however, has not been so abrupt as previously. Sources of Country’s Strength. Poor as the country feels itself to be because of reduced incomes and the enormous depreciation in securities, it is much better able to carry on than it has been in other depressions. While there have been over 1,000 corporation dividends reduced or this year, the dollar aggregate of dividends and d exceeds by many bank deposits at wise greater than they have ever been before and recently have been increas. ing rather than decreasing. In 1921 the strongest American cor- porations were forced to borrow at rates between 6'2 and 7'2 per cent against current demands from lenders of be- tween 4'; and 5 per cent. There are no swollcn inventories of merchandise. There is greater integration in the banking world, as indicated in the abil- ity to localize effects of the New York failure. On the other hand, conditions internationally are less satisfactory than they were a decade ago and constitute the most serious problem that faces those who have responsibility for bring- ing the domestic situation back normal. Within the business life of the pres- ©of | ent generation there have been six seri- ous reverses in trade and industry, those of 1893, 1903, 1907, 1914, 1921 and 1930. In other words, in less than 40 years the man active in trade and the investor he - had to experience a de- gree of ¢ mercial and investment | market dep: sion that threatened him with insolve: Three Adverse Situations. There are three situations in which the outlook is not so clear as one would | wish, and which together may delay recovery. One has to do with the rail- roads, the other two with the bond market and with foreign political and economic conditions. The investments of the banks and insurance companies, | as well as those of individuals, in rail- road bonds and stocks is gre T than in any other group. Not within this generation has there been a year when as great a depreciation in rallroad se- curities has taken place as that which began in the late Summer of 1929. This has resulted in part from the 30 q! sudden realization that the carriers | were faced with competition which lim- |its their growth in gross revenues at | the same time that their rates and op- | erating expenses steadily handicap them and limit the percentage of return on their property investment. | The outlook for 1931 is not by any | means hopeless. This country will not slump back to the conditions of 1920 or 1915. It is now experiencing the prostration that comes from a long ill- ;l::‘l Inxzullnmhlnfl in inlv‘l;iletnt mar- 3 are rapidly to & saner mind, llving a hnlmn. free! themselves from embarrassing commitments and saving What they have lacked above all this | year has been leadership. If this could | be assured now one could be quite con- | fident that a substantial degree of re- 1cn;\*:;_\z/lwould set in in the early part | of " 'PRAIRIE OIL & GAS CO. VOTES $20 DIVIDEND By the Associated Pross. W terior, | Ofl & Gas Co. T year 1930. The Wyoming company pro- | duced ofl and g3s in the Rocky Moun- | tain district. N Directors of the McCord Manuf: their money. | sh: IWORLD MARK SET BY CURB TRADING IMarket Holds Equilibrium, Despite $9,000,000,000 Shrinkage. BY JOHN A. CRONE Special Dispatch to The Star. NEW YORK, December 27.—Sub- jected to a_terrific pounding, the New York Curb Exchange came through its battle with the 1930 business de- pression with a $ 000,000,000 shrink- age in quoted share values. Despite this setback, the Curb during the year pushed con- struction of its new skyscraper, scene of happler events in the fu- ture, and kept its equilibrium well with the assistance of its new money post and high- speed ticker. Two world trad- ing records were established in 1930. ‘The Curb on June 13, 1930, outdis- tanced world trading records in a single security when 1,564,000 Cities Service rights changed hands. It likewise shat- tered top marks in initial dealings on June 14 when a block of 250,000 Cities Service rights appeared. Other Curb records broken included: The widest share price declines; largest market value shrinkage in memberships (nearly $155000 at the low); greatest number of individual issues, about 2,260; highest number of dividend-paying stocks, 1,465 issues, or nearly 65 per cent of the active issues; a peak total in shares passing through the Curb Clearing House, 600 securities; a rec- ord_number of shares satisfactory as bank loan collateral,'1,000—which dou- bled the number so accepted before es- tablishment of the money post; the most stocks ever quoted ex-dividend in a single day, 142, on June 13; and & rec- ord low number—18—of penny stocks. Money Post Alds Traders. The Curb established a call money post on April 23, where members ar- ranged loans—at a differential of only one-half per cent above the New Yorl Stock Exchange rate—averaging $1,695,- 000 weekly. The call rate uctuated between 4.17 and 2.40 per cent. Although mergers, dissolutions and transfers to the Stock Exchange in 1930 took many securities off the Curb, this joss in point of individual issues and volume of shares—if not in trading im- portance—was more than offset by ad- ditions, which were notable for the number of admissions to unlisted trad- ing of companies heretofore_family-con- trolled. This trend was especially pre- valent in the securities of steel, iron end allied industries, such as casting. machine, pipe and tool manufactures. Many out-of-town fire and life insur- ence companies gained listing, and for- eign utilities and mines greatly in- creased. Natural gas shares led new domestic utility issues, while air and radio shares decreased and oil and in- vestment trusts maintained their rela- tive positions. Issues Move to Big Board. Numerous trusts, holding companies and trading corporations—such as Tri- Continental, Transamerica and Marine Midland—moved over to the Big Board, but others—including American Found- ers, Chatham-Phenix Allied, Insull Util- ity Investment, Inc., and Continental Securities—came on the Curb. Standard Oil of Kansas, Ohio Ofl and Standard Oil Export (formerly Anglo- American Oil, Ltd.) went to the big board. In trading importance these last issues probably would have been replaced by the new General Petroleum Corporation—the merged Standard Ol of New York and Vacuum Oil—had not the Government instituted suit against the combine. 3 Further capital simplification by Com: monwealth & Southern removed Allied Power & Light, Commanwealth Power gre(erred and Southeastern Power pre- erreda ‘The new United Gas Corpora- tion likewise effaced various issues. General Motors bought control of Fok- ker, now General Aviation, and several smaller air companies. psons, Ltd., was the most impor- tant new store security. Publishing shares increased, while farm implement issues decreased. Amusement List Grows. General Theatres Equipm<nt, Techni- color and Columbia Pictures lengthened the amusement list. Railway ‘& Light Securities, Inc., and Rallroad Shares Corporation joined the relatively small Curb list affected by railway develop~ ments. Driver-Harris Company and 8. R. DruurhM?n:’lll:!t\zlng Company ex- ded the industrial group. 5 te the record price crashes and ading smashes, there were only ten John A. Crone. tri | insolvengies in 1930. Failures in 1929 and 1998 numbered five in each year.|being steady Insolvencies reached their peak figure of 29 in IQZ’Zd‘ Wht{n the qumwnnmm - system—providing for unexpec! X- aminations of firms carrying marginal accounts—was inaugurated. With few exceptions insolvencies in 1930 involved floor traders only and did not hit the public. Prices of curb memberships, perhaps better than any single yardstick, meas- ure market prospects, since such quota- tions attempt to discount speculative activity. Seats during 1930 ranged be- tween $225,000 and $70,000, with the last scale at $92,000. The extreme low of the year, reached in October, was cue to sales forced by insolvencies. The 1929 range was from $170,000 to $254,- €0C—the latter, the highest price on record, wes reached September 24, 1929 —and the final quotation was $150,000. Approximately 66 memberships were transferred during 1930. Sharp. Drops from Peaks. The curb market of 1930 was memo- rable because total quoted share values shrank about $9,000,000,000, compared with $6,000,000,000 in 1929. The aver- age share in 1930 lost about 6635 per cent of its peak value for this year against 40 per cent of its price of 1929. Twenty-five active shares, be- tween their April 10 high and December 15 low, lost 345 points, or 55 per cent in 1930. Thees same shares, from their Septembér 8, 1929, peak to November 13, 1929, low, dropped 41.76 points or 48 per cent. One session, that of December 11, 1930—the record low was reached later—reflected the depths to which shares had fallen. On that dlg 380 issues were traded in, of which 18! averaged $2 a share. Of these 185 issues, 50 were quoted below 50 cents a share and 85 below 87% cents A are. Curb dealings in 1930 totaled less than half those of 1929. The most active five-hour session, on May 5, piled up 2,540,400 shares against 7,006,300 shares on October 29, the record day in 1629. ‘The bigg:st two-hour day, on June 14, 1930, regist~red 1,570,800 shares against 1,832,000 shares on July 13, 1929.. The smallest five-hour and two- hour sessions amounted to 301,200 shares on Al 22 and 122,300 shares on August 23, respectively, contrasting with 820,700 shares on Aprl' 8 and 583,000 shares on December 14, respec- tively, in 1929. The October 10 session was the broadest of the year, issues having been traded in, nst 750 on October 29, 1929. On May total | 23 there were 26 stocks reaching new highs for the year while on October 10 there were 241 stocks moving into record low ground for the year or lenger, The curb market of 1930 started about 20 per cent above its extreme low Wmtlwum mmumno{l.. ‘The Mmmmr:n-nfl which | it hopes will be the | 500 | trying to keep up courage. WASHINGTON D. C, DECEMBER 28, 1930—PART SIk. IDECREASE IN GRAIN PRICES CUTS FARM INCOME 20 PER CENT 'Season Just Closing Is Declared Worst in Years—Russia and Drought Are Factors. BY GEORGE SCHNACKEL. CHICAGO, December 27.— Lowest ! prices for wheat in 28 years and the shortest crop of corn in 29 years fea- tured the grain year of 1930. | It was a ycar of world-wide unsettle- | ment in speculative grain markets, and {one of governmental experimentation in seeking to find remedies for sick i price situations. Through it all the farmer strug- gled to make both iends of his busi- | ness meet, on an | income estimated to have been 20 per cent under the far from booming agricultural year of Most spectacular |of the year's de- | velopmenis has been the effort of I(,he Federal Farm Board, working through the Sta- bilization Corpor: tion and the Far- mers National Grain Corporation, to stop the retreat of whecat values. Most demoralizing of developments | was the return of Russia to the world market as an exporting nation of major consequences. Five months of the crop season saw her dumping 63,000,000 bushels of wheat, with 40,000,000 bushels more belleved to be on the way at a time when most producing coun- tries are glutted with grain. Most distressing of the factors that figured in an unfavorable year was the worst drought in the recorded history of the country’s weather. This ac- counted for the smallest corn crop since 1901 and for a serious shortage in most feed crops. Boon in Drought Aftermath. Its aftermath—involving extensive feeding of wheat to livestock—helps to provide the means of righting an un- balanced condition of supply and de- mand in wheat. ‘The drought, which affected seriously the sub-soil condition of the Winter wheat territory, has not been relieved completely and in the Ohio Valley par- ticularly, it may give rise to conditions that will create a short crop during the coming season. But, at this stage, this possibility is supported only by conjecture. . The year has not been a satisfactory George Schnackel. one either for the grain trade or for | the farmer. The specter of Farm Board interference has hung over grain markets throughout the year, although th> Farm Bohrd, after purchasing 60,- 000,000 bushels of wheat during 1929, was out of the market until late this Fall. At that time it stepped in to prevent a panic which threatened the entire grain price structure, due to a looming collapss of the Canadian grain pool. Purchases which added 44,000,- 000 bushels more of wheat to the Gov- ernment holdings were continued throughout the closing two months of the year to peg prices at 81 cents for old contract May delivery wheat, and 811, cents for the new contract May. Even with this Government support futures prices at Chicago, while from 10 to 15 cents above world levels, still were 42 to 58 cents under & year ago. According to the Department of Agri- culture farm prices of wheat during the first four months of the marketing sea- son averag-d about 71 cents a bushel, whereas during the corresponding months of the 1929 season they averaged about $1.09 a bushel. Board Not Optimistic. After its attempt to stabilize produc- tion, the Farm Board concluded that, due to world-wide overproduction, it could sce little else than a gloomy out- look for the next year. “Th~ board could see no hope for arresting the downwar® price move- ment.” it said, “or preventing its serious consequences to American wheat fai mers by co-operative marketing as such, by stabilization measures of the already employed or through adopting any of the proposed measures designed to dispose of the surplus abroad at prices below domestic levels. ““The obvious economic remedy is cur- tailment of production so that the tariff might become effective on American prices.” And Sectetary of Agriculture Arthur Hyde said: “By this time it is evident that supply and demand conditions cannot be set aside by legislation; that the dumping of surpluses abroad is not surpluses tends to prevent rather tia cause & rise of prices; that tcriff duties are not effective on commoditi strain production. Voluntary curtail- ment of production is the only logical remedy for the surplus problem. But the American grain grower evi- dently does not take kindly to_ these suggestions of Government officials. This is indicated by the fact that the Winter wheat area seeded is only 3 or 4 per cent smaller than a year ago. As it was, the 1930 wheat crop of | this country turned out to be normal. It totaled 840,000,000 bushels, as com- pared with 806,000,000 bushels in 1929. Likewise, the world is harvesting only about an average crop, Surplus May Disappear. It is this factor on which the Farm Board is counting to dispose of its hold- ing of over 100,000,000 bushels without upsetting the whole price structure. One analysis points out that, count- ing in the 275,000,000-bushel carry-over of wheat which this country has, its total supplies are 1,115,000,000 bushels. Milling requirements total 520,000,000 bushels and 100,000,000 bushels are needed for seed, reducing the total to 485,000,000. Exports thus far have to- taled 66,000,000 bushels and the Farm Board is holding 100,000,000 bushels, leaving a balance of 329,000,000 bushels for carry-over and feeding require- ments. A normal carry-over is 180, 000,000 bushels. It is estimated by the Bureau of Agricultural Economics of the Department of Agriculture that farmers will feet 236,000,000 bushels to livestock, and if this proves to be the case this country’s huge supplies of wheat could very well disappear. The situation In corn became & mat- ter of national concern during the hot months, owing to a drought that tight- ened its grip at the height of the corn- growing season and ruled over much of the belt. Production of this principal feed grain fell to 2,047,000,000 bushels, or 22 cent less than the 1929 pro- ductich and 24 per cent less than the average annual production for the pre- vious five years. It was the smallest crop since 1901. Prices of corn natu- rally soared, and for the first time in 30 years it sold above wheat. Heavy substi- tution of wheat as a feed for livestock resulted from this price difference. Eastern industries were able to buy Argentine corn cheaper than the do- mestic product, even after adding the 15-cent tariff, and Canadian consumers substituted African, Rumanian and Ar- gentine corn, owing to the cheapness of those arrivals. However, traders feel that corn values are going to work higher because of the small amount of | the crop likely to remain to fill com- mercial needs. | able to pay better prices than terminal markets. In order to prevent heavy importation of Argentine corn, Con- gress will be asked to raise the tariff to 25 cents a bushel. Oats prices toward the close of the year were 10 to 121; cents below a year ago. Producers of this grain, though, have been fortunate this year, inasmuch as their crop was nearly 200,- 000,000 bushels more than last season and of excellent quality. They ben- efited by tne disaster to the corn crop. There wis heavy substitution of oats and barley mixed for corn on the feed lots. Provisions felt the depressing ef- fect of low grain prices and the un- emnloyment situation. HARD YEAR ENDING IN METAL FIELDS Executives, However, Feel That Improvement Will Come Early in 1931. BY KENNETH H. CONDIT, Editor of American Machinist. With the majority of companies in the metal working field, 1930 draws to a dull and gloomy close. The toboggan- like descent of every barometer for the industry from a moderate peak in March to a deep valley in August was followed by what nv;{vmmlu of recovery. Unfortunately, this recovery continued for enly two months and was followed by a renewed decline which, at this writing, has reached an even deeper valley. Much | change before the first of 1931 is un- likely. The index of activity based or®con- sumption of electrical energy reached 130 in March and is now at 87. Its high for 1929 was 156 and its level a year ago this time was 135, Index numbers based on machine tool sales have followed a parallel course. In July the index dropped to 91; in August it _rose to 113; in Sep- tember to 136. But in October it fell back to 90, and it w;fll pll&ohbl&lho; little improvement for November December.p ‘The 100 base for this index is the average for the years 1922, 1923 and 1924. Although executives in the metal working plants are resigned to a con- tinuance of existing dullness for the rest of 1930, the general feeling s that 1931 will see moderate un?rovemem in the first few months, followed by an approach ‘w“:mrmnl activity in the latter part of e year. Books Al pael mtuer B 5 and de activity, design il ‘When the tide turns the rtmen{f have generally ly active. o companies will be ready with new and attractive majority of for business products. the end of June. After two quiet months the market climbed until mid- September, hesitated until October 10, when it sank rapidly and went into the fluctuation which continued to the end of the ye: Siiver’s Drop Hits Markets. Attempted stabilization in copper, steel and sugar helped those shares momentarily, but a fresh descent in silver %ulud these props out of position and _brought renewed weakness to | metals, foods and the various manufac- turers and distributors dependent on |such raw materials. Fresh discoveries 'of gold in the West, together with the | demand for the metal and cheapness of labor, brought increased inquiry for gold mine shares. ‘The cheerfulness of veteran traders as they look forward to 1931, which will bring with it t.he‘.cufl!'l new sky- headquarters, is no mere 3 m whhaln( of & man in the m. ‘These vet- erans are contrasting 1931 with 1921, the year the curb moved Indoors. A “decade ago today the curb was bolding _sessions outdoors on Broad street, just around the corner from Exchange Place. When it moved in- coors on June 27, 1921, the price of memberships was $8,000 as against $92,- nd the market value of r it 3?2 ;'3’3‘ memberships was $2 25,500, aqainat % a preciation $50,600,000, or an ap- of 2,400 per cent, (Copyrisht, 1930.) AUTO TRADE AWAITS SIGNS OF RECOVERY Producers: Ready to Maintain Production in Accordance With Sales. Special Dispatch to The Star. DETROIT, December 27.—The atti- tude of the automobile manufacturers toward 1931 and the future is one of word, with optimism cropping out whenever bright spots in either the pro- duction or sales situation manifest themselves. It is now conceded in official quarters that production for the last 12 months is going to approximate 3,500,000 cars and trucks, or more than 2,000,000 less than the all-time total of 1920. This relegates 1930 to a lower status than | that of 1927, when the total output was 3,580,000 vehicles, with value of $2,700,- 705,743, In a comparative sense, how- ever, the measuring stick as far as profits to stockholders is concerned will Tall short of the 1927 ratio largely be- cause progressive competition, with les- sening margins, has cut them down, and also because readjustment has brought other unfavorable conditions. However, the manufacturing programs are being carried forward with renewed vigor for next year. (Copyri 1030.) . |DIVIDENDS HOLD UP WELL DURING YEAR Special Dispatch to The Star. NEW YORK, December 27—'Jmme: diate adverse developments exert a tendency to befog broad and underly- ing situations, a tendency somewhat illuminated by the country’s dividend record for 1930,” says the Financial World. “Total funds for this this year will approximate $4,414,79: 392, as against $4,488,465,736 in the previous year, a decline of about $74,- 000,000. This decrease amounts to less than six-tenths of 1 per cent of the total. From the standpoint of general income which investors received from suffered least all from the de slon. They have received llmux'.m:; much this year as they did the year before, to spend as they wished. ‘The showing is one of our bright spots, since it is made despite the numerous reduc- tions and omissions of dividends which have been made. “This record enables us to visualize the possibility of dividend disbursements Tow Wealth Inustey . coable of pite, capable of plac- ing in the hands of investors ';m.h ;m w'bu 3 ich o:r these prof unes, for mu it profits are TWO WEST VIRGINIA, BANKS GIVEN CHARTERS ‘The controller of the currency has issued a charter to the National Bank of Commerce of Charleston, W. Va., | capital, $200,000, a conversion of the Bank of Commerce. President, G. W. Van Horn; cashier, Edward Hess. ‘The controller has also issued a char- ter to the McDowell County National Bank Issac T. in Weloh, W. Vi ‘Mans; cashiet, T A. feasible; that the indefinite storing of . Feeders are willing and | 000, walting. Conservatism is the watch- | ing 1930 OFF SEASON [N BOND BUSINESS Average Monthly Trading of $245,000,000 Compared to $251,700,000 in 1929. BY F. H. RICHARDSON. | Special Dispatch to The Star. | NEW YORK, December 27.—Contrary to expectations existing at the first of the year in the minds of many and bond market commentators, 1930 did not prove to be & good year for fixed income securities. The dis- aster that had overcome the stock market in the fall of 1929 failed to turn the public to bonds as substi- tutes for stocks. The bond mar- ket advanced dur- ing the first eight months of the year to its highest levels since 1928 and . rdsom. then in the final S third of 1930 siid abruptly to the lowest point touched since 1922. These moves, the first of which was traceable to the influence of money rates, were accomplished in a volume of trading that only averaged about $245.000,000 a month on the New York Stock Exchange. This compared with a monthly average of $251,700,000 in 1929, itself a poor year for bonds be- cause of the enormous popularity of stocks during the first ten months. Here was proof of the indifference of inves- tors to the great body of bonds. Easy Money Conditions. Money rates remained at bottom levels during most of the year, following the action of the New York Federal Re- serve Bank in dropping its rediscount rate from 4’; per cent to 24 per cent. Time money dropped steadily until the 90-day quotation reached 2 to 2V, per cent, where it stayed until the last days of the year. There was a slight stiffen- ing of rates just before Christmas, at- tributable to year-end requirements. Another cogent factor in the back- ground of the market was the drop in the prices of basic commodities which, measured by the Department of Com- merce index, was from 96.3 to under 82. But there was no traceable response to the theory that when commodities go down in price, bonds advance. It was natural to suppose that as the purchas- ing value of the dollar increased, there would be a higher value placed on se- curities on which the income was as- sured or reasonably well secured. But this did not prove to be true. Banks and insurance companies which are ordinarily the largest buyers of bonds, were under the necessity of sup- ‘plying funds to depositors and policy holders who wished to borrow. As a consequence these institutions were not able to buy to their full power in the earlier months of the year, and near the year-end they were forced to lig- uidate large amounts of bonds in order to conserve the liquidity of their re- sources. The volume of investments re- ported by Federal Reserve member banks in February stood at $5,541,000,- 000. The figure was $6,854,000,000 in November but in the last month of the year banks were forced to dispose of bonds amounting to well over $100,000,- Less Financing by Stocks. ‘The public’s indifference to common stocks was well proved by new financing figures. Whereas in 1929—a roaring year for stocks—there were $6,931,408,130 of new stock issues sold, in 1930 there were only $1,500,000,000. Even when com- pared with the more normal year of 1928, the decline was impressive be- cause in that year there were sold $3,626,165,481 of stocks, while in 1927 the figure was $1,773,287,604. During 1930 stocks comprised about 25 per cent of the total of new financ- ing while the remainder to the amount of about $5.809,000,000, was in bonds. In 1929 bonds accounted for only about 35 per cent of the total financing. In 1928 bond financing was about 63 per cent of total and in 1927 it was nviler Ml" urueent of &e 't:'))l:lihw that when compar e years 1927 and 1928, where there was no feverish demand for common stocks and money rates were at figures com- parable with the current quotations, it has the appearance of & year much nearer normal. New bond issues during the year were largely of a high de type and there was a sharp curtailment of the volume of issues carrying such features as con- vertibility into stocks or options to pur- chase stock. Many offerings, of a less well secured nature, were put at prices obviously much too high, judging from their subsequent collapses, and at times the investment market suffered from digestion, especially in the early months of the year. Municipals Eagerly Sought. to their anxiety to keep funds 1n"as " Sose imation ot cash an mmnm as possible, the 'ge inves insti- banks, tutions such as the commer the savings banks and the insurance Lomrnlu bought only the highest grade of securities. There was a good demand for long term prime issues, but the feature was the unprecedented premium placed on short term high grade issues. Municipals included in this category and maturing serially over a period of years were 8o sharply bid for that at thg peak the one-year maturities sold on"a 3 per cent yield basis. The same applied to rallroad equipment certificates. ‘The United States Government was able to borrow in mid-December at the for six-month notes and 1% per cent per annum for 12-month notes. When compared with the 5 per cent rate that record rate of 13, per cent per annum | | FINANCIAL, LIVE STOCK TRADE = BRIGHTER THAN YEAR AGO Market Review Presents Forecast of Better Prices, With Increased De- mand of “Growing Population. NION STOCKYARDS, Chicago, December 27.—Producers and : m“lnoz( !“ Gfihe.h - prof 930, yet: ar goes down in the *orze as a period cf disap- et pointment for this division of the g Slackened mand for eral consumers, presumably because of curtailed pur- chasing power, ac- counted for the less favorable mar- kets than antici- pated for the year. Consumption was 50 sharply reduced that bmad con- ces;lom had to be made to Frank E. Moore. ucts merc] dized. Still the careful hog-raiser and the shrewd cattle-feeder were able to ob- tain a return not sharply under that of 1929. It was somewhat different in the sheep division, however, for here supplies were excessive and prices of animals fell to the lowest level in 15 years. Owing to curtalled feeding operations and to the smaller numbers of hogs and cattle on farms, the out- look of this industry now is favorable. Except in the sheep market, supplies of live animals on the market have been small. Cattle runs at Chicago for the year aggregated approximately 2,231,000 animals—the smallest total in 44 years. TReceipts fell about 175,000 under 1929 and 1,500,000 short of the banner year of 1918. At 20 primary markets 700,000 fewer cattle were marketed this year than a year previ- ous. It was somewhat the same in the hog division. The supply locally total- ed -about 7,900,000, showing a decrease of 300,000 from last year's total. At the 20 market points the hog runs were 3,000,000 smaller than in 1929. Mutton Poundage Smaller. The situation was reversed in the sheep market. Here the run of 4,270, 000 was the largest since 1926. But the poundage of mutton was go much smaller than that in cattle or hogs that this larger run was of smali con- sequence in affecting the total con- sumption of meat ucts. The slaughter of animals under Fed- eral inspection during the first 11 months of the year showed 188,000 fewer head of catile, 3,742,000 fewer hogs and 2,338,000 more sheep. In poundage of meat these figures showed a net decrease of 713,980,000 for the period. Meat animals received at Chicago during the year had an approximate value of $420,000,000, showing a de- crease of $98,000,000 when compared with a year ago. This abcut repre- sents the shrinkage in the amount of cash the livestock producers and feed- ers took back to the country with them, ‘There was a slump of 20 per cent in the value of cattle marketed and about 5 per cent in the value of hogs. Sheep stock showed a decrease of 30 per cent in value when compared with 1929. In January there was a break of $1 a hundredweight and this decline con- tinued at about the same rate for four or five months. Nearly all of the cattle sold during the first half of the year brought less than they cost as feeders. ‘The low point of the year in the market for beef steers was reached August, when the best fat bullocks sold at $12.35, compared to $16.75. paid for the same class during the first of Jan- uary. Later in the year there was some improvement in the market for fat yearlings, but no substanfial gain was made on heavy steers. Yearlings had the preference nearly all year because the light cuts of beef were e:(sier to sell. Toward the close best yearl topped at $13.75, while fat steers weighing over 1,200 pounds brought $2 to $3 less. About 50 per cent of the year's re- cflfi” consisted of cows, heifers and bulls. In this department the same gr:'e trend was in evidence. Although { obtained from cows and helfers Wwas of a cheaper grade the same diffi- culty prevailed in selling it to the retail trade. The bull market held better than other butcher stock owing to a broader demand for sausage created by ‘“hot dog” stands along automobile highways. The calf supply at 550,000 was 20 0::]1'. g:;fi;r l;:l‘t year and the smallest since 3 prices were off sharply, as in-other divisions. o2 Heavy Hogs in Demand. The feature of the hog trade this year was the uniform demand for heavy weights, due to the low stocks of lard. At times heavy hogs were more popular than the lights, but a good outlet for fresh pork held the light and medium weight butchers up most of the season. Big packers had 34 per cent of the year's supply sent direct to them and this had some effect on the local de- mand. Shippers and small packers were relied upon to take most of the hogs, and the outlet, through this chan- PR £ e close of the year all were selling at an |.u.'m.mlll:r'°°¢ = 1929. This was partly due to sthe fi :.hn hflg& of ‘.11 weights were el n quality owing to the good. quall corn fed. o The average price of hogs sold dur- ing the first 11 months of the year was $9.65, compared with $10.20 during 1839 and $9.30 in 1928. In 1926 the a for the entire year was $12.50, and 1923, the year of post-war defiation livestock, the average dropped to $7.5! In sheep the situation was unsatis factory throughout the year. Receipts were increased 12 per cent with 1929, making a total much | the requirements of the market. the hangover from the previous year was bad. Bad Time for Lamb Feeders. When the year started Colorado and Nebraska were loaded up with 2,000,000 lambs which had to be liquidated demoralized market. An effort to hold Developments proved that, as in the cattle market, the feeder lambs been bought at excessive prices gl;:vlous Fall. Many were pul the on cut to fit the demand. e high level, and when the b c:rvfl) from Kentucky and Teue.eo“ arrived the prices were pounded down to 3 15-year low. i e consensus in livestock circles is that the prospects lor"‘tg: coming year are much more favorable than they were for the year 1930, t from the kets for replacement is 20 less. Population is increasing, cally, :;c economic conditions im year ago and stocks of lard ;ulomfl are dlov. o lemand traders on both market look for lmpmvem:l{g:: ;‘flees RECOVERY IN STOCK MARKET AWAITING BUSINESS REVIVAL (Continued From First Page.) dation. The showing of brokers’ loans testifies to that, notwithstanding the 1 amount of borrowings secured by collateral still carried by the banks. Decreasing volume of sales during the progressive decline is another indica- tion. The largest day in 1929 was Oc- tober 29, when the turnover was 16, 388,700 shares, and on the panic day, November 13, 1929, it was 7,761,400 shares, and that for a three-hour ses- sion. The largest day in 1930 was May 5, when volume was 79,200 shares, but that was a full five-hour session. sales were s0 much down from the peak in those sessions when the suc- cessive 1930 lows were made. t market break this year was in une, and the day of greatest volume then was June 18, when the figure was 6,425,630 shares. The final lows were made in Novem- ber and in December, but on smaller volume than in June. In other words, forced liquidation fell off in volume as | & the market went lower, showing the steady elimination of weak holdings. For the rest, there must be a return of confidence in the bond market, a stabilization of commodity prices and un%mvement in the recognized indexes of business activity, such as rate of op- erations in the steel industry and car . To analyze the situation in these lines is de the province of this review, but it can be said that the best informed are hopeful and that the the Treasury was compelled to pay in 1929, these figures become a signifi- cant barometer of the position of the high grade short term market. These low borrowing rates were probably about 76- per cent due to the low rate prevailing for money and 25 per cent due to the abnormal demand for read- paper. municipals, which are mostly issued on a serial maturity basis, short term. &?er put out during the year amoun to about $675,000,000 compared with $262,638,150 in 1929 and $275,118,600 in 1928. Municipals smounted to about the same as the 1929 total of $1,379,147,428. ‘Widespread Between Groups. Money rates had their effect during the first eight months. Corporations longer able substantial returns and certain of on their funds b call money market, most of the year was 2 per cent and went as low as 12 per cent, bough moderate amounts of high grade is-* sues. But there was little demand at any time for second and third grade issues, and the spread between the groups was a matter of comment during the entire 12 months. the period of advancing index of the market as pre- | pec EmpehistiE e resentative 98. Bl ot or'30 h‘p‘:fim ‘o a8 of commodities, up tional conyfierce and the universal low- efln{o(mnneynmmreuhecm point where actual unrest in America, political upheavals in ‘world- many and other European cl-;lunf-flsl and | in acute economic distress Australia were the sequels. The American in- vestor, never tem to hald te | cred €] sulted fore! dmmob saw |t l.n“ ligat s whole market is in a position to reflect trade recovery when it comes. (Copyright. 1930. alized when investors threw overboard their holdings of South American is- sues at the time of the there. These bonds recovered di the last part of the advancing term the market, but, with the exception of Argentine bonds, none reached the levels prevailing before the ou Outlook for New Financing. Meanwhile electors of the United States have voted munici) bond is- sues of over $400,000,000, few of which bave been brought out. Many corpora- tions are desirous of sell large amounts of new bonds for much-needed ‘;ork‘l’rlm cnplt.:l‘.’f E“x"“e fl’;‘" a8 sizeable amount of equipment finan to do, And countries all over the -“&"15 have their applications in for dollar lits. But ‘market is in no condi- tion for new financing ex ‘where the credit of the borrower is of the highest, and it will be some time be- fore the investment situation over the depressive effect on pub! senti- ment of the recent break. loyment aflnflan has in- of new issues put out at a given time, order not te overioad the market, itus of ¢! grower, and that will attract4pvestors of us ELECTRIC RAILWAYS revolutions & HAVE FAIR EARNINGS Editor of Trade Journal Says Op- erations for Year Were Satisfactory. BY JOHN A. MILLER, Jr, Editor of Eleétric Railway Journal Electric rallway operations during 1930 were :“;‘CHHB mcenenlly sa 2 m: n. Prel Teports indicaf 10ss revenue the . creased about 8 ceding year, 00, carried, only chiefly to“ur:e reased efficiency some i curtailment of ~service, . mained practically uncl economies effected; -however, sufficient to the 1929 At the during the year of _approximately 3‘3,60,000,000. as comparéd with $375,- 0,000 o1 pianned. The curtailment of expenditures. was most moticeable in purchase of new. cars and busses, Tn the feld of troty bus operation and taxicab operation, no‘ti.vll,:; expansion occurred. i act occurred in the fi electric traction. A mhl.-]dt:"t\r '0’; the year was the formation of the Electric Railway Prlkh.n‘ t's Conference of somewhat uncertain at this t ap] likely that traffic will be. main- gfi‘efl}; gpr&)‘(_lnuuu;‘ the 1930 level. 'c;onunuad ‘without In;‘.n“ antin 3 program of ing for extensions and mm&h“fi'&f ever, is likely to be slightly curtatled from that of the year just ending. MARYLAND FARMS MAY GET NATURAL GAS By the Associated Press. NEW YORK, December 27.—Charles M. Cohn, vice president of Consol Gas, Elecirio Light & o e Baltimore, - sald is may distribute the natural to property owners in Howard and munmmuu,m.mnm STOCK REQUESTED, NEW_YORK, December 37 UP)— Tiitice ronaly SDNIIR o the Som o of Inland Ut Gas_Oo. ollgwed ’