Evening Star Newspaper, December 28, 1930, Page 59

FINANCIAL INCREASE I STEEL 'BUYING FORECAST Precedent ‘Shows Month of January Has Witnessed Gradual Upturn. @pecial Dispatch to The Star. PITTSBURGH, December 27.—Every one in the steel trade is glad the year Is coming to an end, since it has been the regular thing for steel to register &n improvement with the turn of the r. ’E'.l'he Tast few weeks have been par- ticularly trying on account of the rigid- ity with which buyers have held down their commitments, appearing to take the greatest pains not to specify a single pound more than would abso- lutely be needed to complete the year's work, and almost instant shipment has generally been insisted upon. Prices Are Steady. ‘With such buying practices, some sort._of rebound would seem inevitable a8 the whole thing is largely a matter of January 1 inventory. It is not doubt- ful about prices, for steel prices are now admittedly steady all along the line, and that was not the case prior to a few weeks ago. Producers’ Attitude. Steel producers are certainly not overly sanguine. It will not take much increase in tonnage to meet their pres- ent expectations, at least for the next few weeks, Perhaps if there were more consulting of the statistics and more reliance on them there would be higher expectations, for in every year in which cedent would count at all there has n a marked increase in steel pro- duction from December to January. ‘The smaller increases occurred when December had been a relatively big month. Improvement in steel tonnage in January is not, of course, to be figured on the basis of production this week or next, there being a special holiday dip. A few finishing departments are eclosed for the fortnight and few have taken only the Christmas holiday out. is still greater decrease in steel ingot production than in steel finishing, as stocks of ingots and semifinished are desired to be low for January 1 in- ventory. There has been a little bank- ing of blast furnaces. Character of Comparison. ‘The comparison is rather between full month of December and the month of January. This month probably show an ingot produc- tion about 35 per cent of capacity by the official reckoning. That would be about 10 points loss from November, which had 6 points loss from October. The greater loss would be simply sea sonal, and the decrease in shipments of finished steel iy not as great as the in ingot production, on ac- count of reduction in stocks of ingots and semifinished. It would be idle to less fresh trouble develops that no one now dreams of, there will be a marked increase. (Copyrisht. 1930.) TRACTION SELLS OFF IN LIGHT TRADIN I ROBERT V. FLEMING. FLENING SEES 193 ON SOUND BASIS Capital Ready to Progress in Business and Thrift, Bank " President Says. BY ROBERT V. FLEMING, President of Riggs National Bank. As we close the year 1930 and sum up the events of the past 12 months, the citizens of Washington may well feel that they are fortunate in residing here, for, while we have experienced to & limited extent the general depression which has existed throughout the world, nevertheless at the end of the year we find that our financial structures are strong, that there have been no fail- ures of moment among our commercial houses, and while general business pos- sibly has been on a somewhat lower level than during the previous year, it compares very favorably with the volume of two or three years ago. we are not faced with as great a prob- lem resulting from unemployment as are the industrial cities of the country. The events of the past two years have brought forth lessons which cannot help but impress upon the minds of the pres- ent generation the necessity for clear nd efficient thought and action and the fact that there is no substitute for established economic principles. There- fore, we shall enter the year 1931, in my Jjudgment, better equipped to progress upon firmer and sounder foundations. I feel we can meet the New Year with full confidence, as no xndjun- ments are necessary here due © manu- f{acturing and industrial conditions. With the acquisition of additional lands required for Federal buildings and the activity of the Government building progral assuring a continuation of employment of labor, and with the steady pay roll of the Government, we find that, in the main, we have only our own enterprises to control and keep on a sound business basis, in order to in- sure a continuation of the prosperous condition of this community, and with to our own affairs, I have every m, Other Local Issues Quiet in Week | confidence in the common sense, in- THE SUNDAY STAR, WASHINGTO !MURE CHEER NOTED Trade Trend and Outlook IN 1931 OUTLOOK Greater Market Freedom Seen, With Major Weak Spots Now Removed. BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, December 27.—The ap- proach to the new year is being made with a hesitation in business that is seasonal, but with more confidence in investment and speculative quarters, where it is believed that, many of the major causes of the 1930 decline havin; been removed, markets in 1931 will re- spond more freely to normal conditions. There is still some rough ground to be covered before the goal of stability in securities, commodities, corporation i:irl?e’gn and banking conditions is at- Constructive events this week have about paired with those of an unset- tling character. Among the former were the reduction in the rediscount rate of the Federal Reserve Bank of New York to 2 per cent, the progress made in pro- muigating a four-part plan in the East- ern railroad territory, declaration of regular dividends on stocks whose abil- ity to continue these rates had been questioned and the stronger statistical position of copper metal. These togeth- er have given a firmer tone to prices of both stocks and bonds. The adverse factors were the closing of another New York bank and others in the East and South, weakness in agricultural commodities and the re- ceivership for one of the smaller trans- portation systems in the South. Bank Rate Cut Unexpected. ‘The unexpected lowering of the New York bank’s official rate was regarded as & means of tempering the effect of the suspension of payments by an insti- tution that was not a member of the Federal Reserve System or of the New York Clearing House Assoclation. It gave opportunity to emphasize the scope of the resources behind the metropoli- tan banks and the ability of those who required funds to borrow at the lowest rates since the Federal Reserve System was established, also on the easiest terms permitted in any money market of the world. ‘The moral effect of the announce- ment is greater than its practical bene- Also |fits. The difference between a 2 per cent rediscount rate and one of 21; per cent will not stimulate business any more than did the dropping of the rate last June from 3 per cent to 213 per cent. In a period of lowest call, time and commercial paper rates in a decade we have had six months of the severest declines in securities and com- modities and the sharpest falling off in business profits that have occurred within the memory of the present gen- eration. Indirectly the lower rate should slowly revive industry and assist in the recov- ery of business confidence. It gives notice that money will be extremely cheap for a long time. It is apparent that a change in senti- ment toward railroad stocks has taken place. They have reached a point of resistance to liquidating and speculative sales. Failure this week of the trunk line executives to announce a complete agreement and further evidence in the November statements of the stress under which the carriers in every sec- tion of the country are operating did not disturb prices. Nor did the receiver- ship of the Seaboard Air Line have any effect on them. This might be ex- plained by the fact that prices and nfl ustry End Market—Higher Bid for Chapin-Sacks. ‘Two 10-share sales of change yest ) ex- dividend, at 43. . ‘Ten shares of Federal-American Co. common came out, ex-dividend, at 2715 and 10 shares Mergenthaler otype, also quoted ex-dividend, sold at 85. Bond trading was confined to a $500 hlelo“‘ln ‘Washington Gas 6s, serles A, at As usual, on Saturday, the unlisted securities were called off. were advanced on Chaj cent preferred to 1061 > asked. The other practically unchanged. Capital Trac- on the Wash- Sacl per bid and 108 quotations were MOTOR BUS INDUSTRY HAS GOOD PROSPECTS @eneral Conditions During Present Year Are Declared Better Than in 1929. BY CARL W. STOCKS, Bditor of Bus Transportation. Oonditions in the motor bus industry, taking into consideration traffic, shop and terminal construction, equipment buying and earnings, were in general better in 1930 than in 1929, although the increase that was expected at the first of the year as a continuation of the natural expansion of the industry @id not materialize in full. i P e g yields were the lowest in many cases for gefloda ranging from 10 to 40 years. Those who had taken the trouble to study the Florida perties of the Se: board in the fleld of their operations have never had, during the past three or four years, any doubt as to their ultimate effects on the credit of the parent system. It was another St. Paul- Puget Sound division experiment on a er scale. Appraising Business Outlook. ‘Wall Street several times this year has scented a revival in industry that was not apparent to industry itself. These false starts have made a public that interests itself in securities ex- tremely skeptical. Although the ma- jority opinion among economists, and that expressed by the various statistical services, favors a definite recovery in business in the first or second quarter of 1931, the stock market at the end of this year has ignored such possibili- tles. If they do not develop, the mar- ket has nothing to lose from discount- ing them. If they prove to be true, stocks will be in the unusual position of trailing, instead of leading, business. This they have never been willing to do FOOD FIRMS ENJOY PROFITABLE YEAR! Net Earnings Reduced and Volume Slightly Curtailed, Says Magazine Editor. BY DR. L. V. BURTON, Editor of Food Industries. The business of manufacturing foods is seldom very good and seldom very bad. The fact that people eat regu- larly makes for a reasonably stable market for all foods, the total retail value of which is estimated to be about $25,000,000.000 annually. The very sta- bility of this market is an attractive feature that attracts terrific competi- | tion., Despite the drought, the cost of raw materials has not increased, and in| {most cases raw materials have been| for any length of time. |cheaper than normal. While reduc-| It will be more profitable to forecast tions in selling prices have been made! the trend of securities after the busi- in most food industries, these reduc-| ness adjustments postponed to January tions are equivalent to the reduction of | 1st- have been made and when it is manufacturing costs. Margins of profit | possible to estimate with some accu- have not been greatly impaired. Vol-'racy the effect on prices of securities ume, however, has been slightly cur-' of several months of selling to establish tailed. | tax losses. Undoubtedly this selling has One large manufacturer has stated | been greater than since 1920. Whether privately that if the food industries| or not its importance was not exag- have not been making money in 1930 gerated and its volume confused with the fault is entirely their own; that the | liquidation forced out by embarrassed economic conditions of the day cannot | security holders is a point that cannot be blamed. be established until the time for tak- | ing the 1930 losses has expired. (Copyright, 1930.) . In a moderately broad sense, this assertion appears to be a valid one. There are. of course, ex- ceptions, the most notable of which is the confectionery industry, which has had a poor year. Sugar is in the syme cal | Expansion as measured by miles of bus routes in intrastate and city opera- tions continued to show an upward trend. According to incomplete returns from about one-fourth of the States, bus route mileage in 1930 increased nearly 13 per cent over that in 1929, with a gain of 11 per cent in the num- ber of busses used. The gain in pas- sengers carried was 22 per cent, with » gain of 10.5 per cent in gross revenue. This expansion or growth is probably higher than the average for the entire country. ‘The estimated number of new busses put into common carrier service during the year is another measure of the ex- pansion of the industry. This indi- cates a smaller number than for past g:-u. The total for 1930 is likely to less than 5,000, as compared to 5,400 in the previous year. On this basis, considering replacements that have been made, it is not to be expected that the total number of busses engaged in com- mon carrier service throughout the country will exceed 45,000 vehicles. ‘The interstate or long-haul portion of the industry is at a new high point. New routes, mostly in competition with established lines, have continued to be installed. Generally speaking, there are now at least two large companies operating busses over each of the high- ways connecting the principal inter- state cities. Between New York and 0 there are four, between Chi- cago and St. Louls, seven or eight, and between New York and Boston, three. Only between cities within the same State is there any measure of monopoly. At the close of 1929 investment in termin: and shops alone amounted to $110,000,000. When figures for 1930 are complled this figure will be mate- new ‘will amount to more :nlh and shops, from figures existing records. the year just bus fares mbnflnl passed s est levels in the history of the industry. . BANK CLEARINGS. NEW New York bank 000,000; & year New York bank balances, today, 000.000; & year ago, $168,000,000. than $12,000,000, , $5,000,000, 1t avallable in YORK, December 27 (Special). toda; 920, - 3 y, $920. ago, $1,291,000,000. $112,- New tegory. Nationally advertised food specialties have experienced more profitable busi- ness than unadvertised inds or com- modities themselves. Consumer adver- tising of foods has justified itself i 1930. ‘The year 1931 holds the promise of as good earnings as 1930, and with a return to normal economic conditions and consequent restoration of full buy- ing power the volume of sales will in- crease. But, it should be remembered that a return to normal will be accom- panied by increases in raw material costs, which in 1930 often have been below production costs. This increase in raw material costs will mean in- creased total costs. This, in turn, will require increases of retail prices, if the existing margins of profit are to be maintained. MERRY CHRISTMAS, GIRL, VISITS OVER HOLIDAYS Student in Indianapolis Explains Difficulties of Unusual Name. Checks Are Questioned. ALBION, Ind. (N.AN.A).—Merry Christmas is spending the holidays with Mr. and Mrs. Tom Clouse. Merry ‘Chflllm“ is not in this case a greeting. She is a student at the Indiana Central H lis. The young lady vi years ago on Christmas day, and she thinks that's a tough , “but I always miss out on the ly. believe you are jewspaper Alliance. . oflcer: Absolved in Collision, HAMBURG, Germany, (#).—A_ maritime court |the officers of ‘Washington Federal #en credit balances, &m,m. ; & year ago, $134- “I don't mind the name,” she ex- who you | (Copyright, 1930 by the North American , December 27 today absolved rs George | founding of the busi or ) The 15 bef 'MORE CUTS LIKELY IN REDISCOUNT RATE {Other Reserve Banks Expected to Follow Action Taken in New York. Special Dispatch to The Star. NEW YORK, December 27.—The ex- | tent to which banks outside of New | York will r nd to this week'’s reduc- tion in the leral Reserve rediscount rate from 23, per cent to 2 per cent and to the drogntn‘ of the rate on de- posits by New York Clearing House in- stitutions from 1, per cent to 1 per cent was the subject of much discussion in_banking circles today. It is not improbable that after the !first of the year several of the Federal Reserve banks will reduce their rates from 315 per cent to 3 per cent in order to cut down the “spread” now existing between them and the Federal Reserve Bank in New York. Adjustments by interior institutions to the minimum P sociation, are likely to be slow, as there is more uniformity in such rates among banks outside of the metropolitan cen- ters than elsewhere. There have already been a number of | changes in the interest rate on time deposits made by banks in different sec- tions of the East. With the two rate reductions that have taken place this week it is now | felt that New York bankers have gone the limit in providing funds at abso- | lute minimum rates; and with a call rate that is likely to be 15 per cent after the first o'fh.th ifll’ an in- MOVES TO CHICAGO. NEW YORK, December 27 (#).— The central buying organization of Butler Bros, national wholesalers of general merchandise, moved from New York to Chicago January 1, Frank 8. Cunningham, president, an- nounced. The buying organization has been located in New York since the ness 50 years ago. made, Mr. Cun- it the in touch it. ningham explained, buyers to keep constantly catalogue e D. C., DECEMBER 28 Los Angeles Financier Lays Business Difficulties to Overproduction of Commodities and Failure to Control Distribution. BY HENRY M. ROBINSON, Chairman Security-First National Bank, s~ Angeles. As Told to Earle E. Crows If you should call the world's leading economists around a conference table, I don't believe they would settle the questions of responsibility for the in- ternational business depression or agree on the best courses of action for allevi- ating its consequent distress. Each recognized student of the prob- lem has his own ideas on causes and remedies, and it is doubtful if such a | conference would unite on the proper l':seéeg:ts to assign to the various factors The shortage of, or, if not that, the lack of mobility in the world's gold supply—the. argument advanced by some of the able British economists as the principal reason for international business depression—has been widely discussed. Yet there are’'a great many able economists and men of wide financial experience who insist that the gold situ- ation is not by any means the most important factor, but rather that over- production of commodities of all kinds is the major difficulty. Profits in Sales. ‘They take the position that “forced- draft” sales of manufactured have resulted in net profits through the last few years which have in the main been invested in additional plant ca- pacity. This overexpansion of capacity in turn resulted eventually in distinct overproduction. ‘The aftermath of the war expansion | in production of foodstuffs. rubber and like products has, as is easily recognized n the cause of the long-continued low prices on these products. The fail- uré of artificial measures to control the distribution of certain products con- tributed to price demoralization. Other authorities will attribute the existing situation to causes that have no bearing on the two just mentioned. The restoration of the gold standard in England, to maintain its international commercial prestige, is said by some to have come too soon for the good of that country’s own business and for the part England should play in world affairs. The collapse in the price of silver, due to the action of the Indian Commission and conditions in China, is another factor which has undoubtedly con- tributed to the present situation, as the purchasing power of both India and China has been seriously affected. ‘That the tariff barriers have been im- portant obstacles in the way of interna- tional trade is the contention of most economists. The stoppage of loans and advances abroad by private investors in the United States has restricted the purchasing power of the other nations. In the United States the increased con- sumption of luxuries, as compared with that of necessitles, in the last few years, has been very marked, and it is be- lieved that the higher the percentage of luxuries in use by & people the more sensitive is its economic structure to adverse influences Mental Attitude Changed. ‘Domestically, as I view it, important factor in the situation today i the reversal in the mental attitude of nearly all the people of the United | States in business life when compared HENRY M. ROBINSON. with the viewpoint of July, 1929. There were an amazing number of people who were convinced then that the business trees would grow close to heaven. The collapse of the stock market proved that this was an impossibility. Realization of this has so changed the mental at- titude of nearly every one that they now wish to pull up and destroy sound business trees because these trees dis- appointed them in their hopes. Not the least important factor in the present situation is what now appears to have been the abuse of credit. No short cuts have ever been dis- covered for the correction of credit abuses, nor are there any short cuts for correction of such abuses that have made for depression, unless it might be loans to foreign countries that in turn might be used, in part at least, to purchass some of our excess products. eople generally have long since be- gun to adjust themselves to the new conditions. While there may be further business casualities in the ensuing 18 months, this is not necessarily cause for pessimism, but rather a healthy in- dication of the elimination of those who possibly never should have held a place in_their particular line of production. ‘There are those who believe that no steps should have been taken to pre- vent the rapid decline in stock and com- modity prices, and that it would have been better to allow nature to take its course, however drastic it might have been. ., Solution May Be Near. I belong to the school which believes that efforts to make the decline gradual, cushioning a too-rapid elimination, was the better method, and that this has prevented many serious consequences that would have flowed from an un- protected decline. This, I admit, is dif- ficult of demonstration, and because it cannot be proved must remain largely & matter of opinion. Just how long our difficulties will last it would be stupid to prophesy, but that the people in the various countries involved have been and are working on the most | the problem, mostly subconsciously, to ring about’ & healthy solution, is, I belleve, certain, and the solution may be close at hand. (Copyright, 1930. by North American News. paper Alliance.) OUTLOOK FAVORABLE |HOLIDAY BUSINESS IN CHEMICAL LINES Orders for First Quarter Promise Better Business Than Dur- ing Past Year. BY SIDNEY D. KIRKPATRICK, Editor of Chemical and Metallurgical Engineering. Production of chemicals in 1930, while smaller than in 1929, was on a relatively higher basis than manufac- turing industry as & whole. To & cer- tain extent this was due to the replace- ment of foreign-made chemicals by do- mestic products. An outstanding ex- ample of this is found in the case of acetic acid. Higher customs tariffs on different chemicals was a factor in in- | ' creasing the home output at the ex-| pense of importations. The fact that chemicals enter into such & diversity of fields also aided in holding up the aver- age of consuming demand. Prominent among developments with- in the industry was the putting into commercial operation of the results obtained from previous research work. Synthetic ethyl alcohol, which was practically in the laboratory stage in 1929, was turned out in a fairly large way in 1930 and promises to become increasingly important. Progress was réported in the production of synthetic butyl alcohol. Synthetic acetic pro- duction was enlarged. Many domestic coal-tar dyes made their first appe: ance. on the market. A new dena- turant for alcohol was developed and promises to replace materials formerly used for that purpose. The outlook for chemicals over 1931 is so closely connected with the posi- tion of general industry that it can be said to depend on general conditions. Fairly definite estimates, however, may be made regarding the first quarter of the year. The industries about which expansion programs have been most definite include those which offer wide outlets for chemicals. Among these may be mentioned building, tire, auto- motive and steel. Dyeing and finishing of textiles also look more favorable than at the close of 1929. Contrac- tions for the quarter are indicated in fertilizer and oil refining lines, but in practically all other consuming fields the outlook is favorable. ALUMINUM SHIPMENTS TO SHOW INCREASE By the Associated Press. NEW YORK, December 27.—Officials of the Aluminum Co. of America state that shipments of aluminum into the Southwest in the first quarter next year will show a considerable increase over the last quarter this year. They explained that the estimate of car re- quirements made by the Southwestern Shippers' Regional Advisory Board showing a decline of 30 per cent prob- ably refers to beauxite, from which aluminum is made. Declines in ship- ments of ore from the Pittsburgh ter- ritory, they said, will be replaced by increases from other sources. BUSINESS LEADERS URGE MORE 1931 ADVERTISING By the Associated Press. 'NEW YORK, December 27.—Sales ’,; 51 and accurate determl:u:gm 2:( ml";er:l: the strengthen! of vert grams and -gj‘flmflm of entific management to clerical procedure and methods are three specific problems 1 the American business executive for the year 1931, stressed by a group of leaders in the fields of business and industry in the current issue of System. Budgets, changes in er require- ments and the collective folly of new projects in already overcrowded indus- tries are other points covered. HELP CALLED BACK. NEW YORK, December 27 (#).— The Olds Motor works has recalled e v, ke, n, 0 1 n'u':'dell. H:’gtr Body plant also s increasing | * HELD UP WELL Strength in Bonfis Called Most En- couraging Sign During Past Week. Special Dispatch to The Star. NEW YORK, December 27.—The statistical Santa Claus has so far pulled nothing either very surprising or very disappointing out of the Christ- mas pack. Holiday business seems to be in fair volume, but the trade indi- cators are confused by abnormal shifts of currency and bank funds accom- panying withdrawals of deposists and closing of banks due to hysteria in some sections, says the Business Week in its report covering the week ended December 27. The business index remains practl- | cally unchanged for the week ended December 20 at about 76.5 per cent of normal. This compares with 76.2 in the preceding week and 99.7 per cent in the corresponding week last year. Building contracts are holding up surprisingly well for the season and this may be significant if it continues. Merchadise carloadings also are de- clining more slowly than usual at this period. Industrial activity is slacken- ing rapidly, as it usually does in the last two weekstof the year, what with holiday and inventory shutdowns; but a fair amount of forward buying of steel at firm prices strengthens the promise of a first of the year upturn. ‘The return of strength to the bond market is the most encouraging event of the past week. Rumors that the Federal Reserve is planning to give the world a Christmas present by larger security purchases are ringing down the wind like distant sleigh bells; but it’s harder to believe in Santa Claus this year. CHICAGO LIVE STOCK MARKET CHICAGO, December 27 (#) (United States Department of Agriculture).— Cattle—Receipts, 200 head; compared one week ago, strictly good and choice fed steers and yearling steers, 25a50 higher; lower grades mostly steady; all grades sharply higher than two weeks ago; light heifers and mixed yearlings 25a50 lower; all heifers selling at dis- count compared comparatively fleshed steers; fat cows weak to 25 lower; cut- ters barely steady: bulls steady and vealers 1,00 or more h(%her: best fed yearlings 14.75, a new high on crop; best heavies, 13.50; bulk fat steers, 8.50a12.00; most stockers and feeders, e 8 igher; fat ewes mostly steady; feeding lambs strong; week’s top fat lambs, 8.75; closing bulk better grade fat lambs, both natives and fed Westerns, 8.25a8.50; native bucks, 7.00a7.50; 6.0026.50; fed yearlings, 6.00a6.50; fat native ewes, 2.75a3.25; feeding lambs. 6.75a7.15. Hogs—Receipts, 7,000 head, includ- ing 3,000 direct; steady to strong; top, 8.50; bulk 200 pounds down, 8.30a8.40; unds, 7.65a8.25; pigs, 8.00: 8.35; packing sows, 6.75a7.00; compares one week ago, light-weights, 25a35 lower; heavies steady; estimated holdover: ood and choice, 1 hi shippers took 1,000; light- Maine Man Cathedral Fan. Deans of cathedrals in England have been receiving checks of $100 each from Alfred W. Anthony of Lewiston, Me., and New York. In a letter to the Dean of Exeter, accompanying the check, Anthony said that in the last two years he had visited 21 cathedrals in land, where he found hospitality = inspiration. He sent each a chec: make plainer mere words coul m'-b&n his appreciation, the itude and good will. *| CRUISER ROCHESTER " Gras, February 8 to 17, and a 1930—PART STX. GAINS IN METALS HELPFUL ABROAD Foreign Outlook for Iron, Steel and Coal Called Bet- ter for Next Year. Spectal Dispatch to The Star. NEW YORK, December 27.—Cable dispatches to the Business Week give the following survey of business abroad for the week ending December 27: Business throughout Europe entered the Christmas week quietly and feature- lessly except for the powerful recovery on non-ferrous markets. A second hopeful sign is silver's recovery from the slump of a week ago which, coupled with price declines on other basic com- modities, brought inciplent industrial improvement momentarily to a stan . With textiles and other raw stuff: somewhat firmer, the only remaining pronounced weakness is confined to foodstuffs, notably wheat. ‘The break in Wall Street to new lows and consequent American selling abroad has caused a general reaction on Euro- pean security values which are still below previous levels, though trends this week are somewhat stronger. It might be supposed that set-backs during last week were occasioned by renewed pessi- mism. So far, however, the greater confidence which has bcen gathering for some time is not badly shaken. The belief is current that the new year will open upon appreciably greater activity, notably in the coal, iron and steel industries, which are among those show- ing most recent debility. America Being Watched. Attention continues to be directed more toward developments in the United States than upon domestic matters in the belief that the trend of world con- ditions for better or for worse now hinges chiefly on the ability of the United States to consolidate current conditions against further serious dis- | integration. Should a further pronounced relapse occur, it is believed its effects would be widespread abroad; conversely, any promise of stabilization, even if with nq immediate marked improve- ment, would go far to relieve economic uncertainty and strengthen the disposi- tion toward greater confidence. ‘Two exchanges still remain sensitive— the pound sterling and the peseta. Pressure on sterling has resulted from a combination of causes including, notably, withdrawal of French balances from London; also, the slowness of London discount rates to react to the gold outflow, which only now is con- tributing to greater stiffness. Renewed instability of the peseta is due to recent political disturbances. These have been energetically squelched Dy the government, which is momen- tarily in full control of the situation and has been able even to effect partial exchange recovery this week. Renewed disturbances between Socialists, Repub- | licans and Monarchists may be antici- pated. November Trade Reports. November trade returns are now avail- able. The principal countries all show declines in values, though in varying degree, on both exports and imports from the October seasonal peak. Some- what surprisingly, German exports, which heretofore have been holding rel- atively well, suffered the heaviest loss— 13 per cent. Manufactures were hard- est hit. Prance, whose competitive ability has been steadily declining as internal price levels increased, never- theless suffered least—2 per cent. Sim- ilarly, French imports are down only 6 per cent, compared with losses ranging from 10 per cent to 12 per cent in Germany, England and Italy. Com: pared with a year ago, few declines ex- ceeded the intervening 20 per cent reduction in price levels. However, there were lower imporfs into Germany and England (by 37 per cent and 27 per cent, respectively) and lower exports from England and Italy (28 per cent and 29 per cent respectively). ‘The year in London is ending gloom- ily, but with underlying optimism strong. Neither the coal, railway, nor cotton disputes are actually nearer agreement, bt coal and railway inter. ests are determined to exhaust a)} con ciliatory machinery before falling back on complete stoppage. Cotton mil workers still refuse the “more-loom” system and new wage levels. Truce agreements expire January 5. when stoppage is expec ‘Unemployment this Christmas was twice the total last year. It now stands at two and a half millions. ‘The feeling is general that next year will be better. but that the country is facing a shakedown to new levels of wages, a lower standard of living, harder work and less luxury. The world now is paying, with interest, its postponed bill for 4 years of destructive and waste- ful war. Trade Slow In Paris. Paris business is experiencing the poorest Christmas season and facing the darkest new year prospects since the stabilization of the franc. Though French depression is still far from the depths to which business in other European countries has fallen, 1931 is expected to prove a year of deflation in a degree which in most other countries has already largely been completed. Several industries are now operating at cost. Some—especially automobile factories—are actually operating below cost. The retail trades, except food- FINANCIAL. Lower Clothing Prices Expected During Next Year Decrease in RawMaterials May Cause Scaling Down in Mill Costs. BY J. C. ROYLE. Shoppers are going to be able to buy reasonably in 1931, whether there are bargain sales or not. Merchants now are looking over their shelves and cut- ting down the quotations marked on e resmon o dhi alsabiing e reason for process lies in the fact that the largest of the mail order houses, which also operates a large number of retail stores, has an- nounced cuts, effectiye January 1, of from 6 to 18 per cent in the prices of its standard goods. This means that the other mail order houses, some of which I“IT: operate retafl stores, will follow suit. Some merchandise attribute the price cuts to lower raw material prices. Others declare volume buying and efficient management are respon: sible. But whatever the cause, the ef- fect seems likely to be to keep retail PR s especially true in regard to especially true textiles. The largest single selling item in the .catalogue of the big mail order corporation is cotton goods. They were cut approximately 18 per cent. Flat silk crepe dropped over 40 per cent and silk hoslery and woolen goods showed simi- ilar trends. The cotton manufacturers are not particularly worried. have been able to buy raw materials cheaply and have opened up hundreds of new out- lets. What they are interested in is volume, and the lower prices seem likely to aid them, in this respect at least. (Copyright, 1930.) HUGE NATURAL GAS PROJECTS PLANNED Large Expansion Program to Be Carried to Completion in Coming Year. BY E. G. DIEFENBACH, President, G. E. Barrett & Co. The progress of the natural gas in- dustry during 1931 will be characterized by further stabilization and by the com- pletion of the greatest expansion pro- gram in its history. Within the last few years natural gas has been brought under the control of the leading public utility systems of the country and has taken rank with the electric power and manufactured gas industries. This recognition of the sound nature of the natural gas busi- ness and its promising future has ac- celerated its growth through public financing and safeguarded both domes- tic and industrial consumers by concen- trating huge reserves of natural powerful producing and distril companiss. The coming year will wit- ness further strengthening of the indus- try through consolidation of smaller units, formation of new super-gas sys- tems and the transportation of the I|xx‘elflm large markets not hitherto sup- plied. More than 4,000 miles of major pipe lines now under construction will be put in operation during 1931. These lines, with a capacity of upward of in | Pression similar to that ISHIPSTEAD POINTS T0 CREDIT ABUSES Minnesota Senator Citeq Factors Which He Declares .Caused Business Slump. BY JOHN F. SINCLAIR. Special Dispateh to The Star. NEW YORK, December 27.—Hendrik Shipstead, 49, is the lone Farmer-Labos man in the United States Senate. Twice have the voters of Minnesota, a Re- publican stronghold, elected this former country dentist to the Senate, the last time during the Hoover landslide, by izing the Senate, so closely divided the membership be between the two old parties. That's why American business is curious to know what man- ner of man he is and how radical his are. “What's the matter with busin Senator?” was the first question I ll:"d him when I met him recently. While slow in movement, deliberate in speech, Senator Shipstead does not hesitate in his answers. Neither does he give one the impression of being or hurried in his thinking. Economic Laws. “Perhaps the greatest handicap of business,” he replied, “is the re(uu':l of the leaders in government, finance and industry to recognize well established tl:':n‘::ru geon '.h::nlu, :mifilt.heruore. refuse som "1&‘ b\;rlnm," g is the matter nator Shipstead has never been revolutionist. He is not even muw.u: the popular sense of that term. He is 3 conservative at heart, an old-fashioned constitutionalist. He does not object to m c;llel::’;ldlc;.l. it ?;le uses it in its g of to o0t of fie m:mr.“ s i “Mussol says the trouble with business is the stock market crash in New York,” continued the Senator. ‘The British say it is due to all of the gold being in France and the United States and to our tariff wall. The Germans say it'is due to reparations, 1l are right, like the blind men who were asked to describe an elephant, “The one who felt of his legs sald the elephant resembled & tree, The one who got hold of his tail sald the elephant resembled a rope; the one, Who caught his trunk, said he was more like a snake; while the one who felt his body sald he resembled a house more than anything else.” Recalls Prediction. “In your opinion, is the Fruent de- R ad of 1920?" I ~Well, some say that this depression will disappear quickly, like the depres- slon of 1920,” the Senator went on. “But in 1920 the world was & vacuum, as far as food and commodities were concerned. The force of this vacuum practically sucked commodities out of the United States, giving us tremendous exports, for which the world had to pay in gold. When they had no gold, we loaned them the gold credits with 500,000,000 cubic feet of natural gas a|Which to buy. In 1920, I said that it day, will supply a number of the prin- cipal industrial markets of the coun It is likely, moreover, that within wu’n !:-;.rmll next 12 months the Eastern and West- would take 10 years for the get back to nm‘mlyel mucthm"mfldfl‘l: carryover of surplus. The world to catch up as early as ern gas-producing areas will be inter- | the Spring of 1925, when the decline tarted. This > connected, virtually making the industry a nation-wide public utility. Natural gas affords greater heating content at lower cost than manufac- tured gas. Despite this advantage, the two forms of fuel do not conflict in the acquisition of new markets. One sup- plements the other. Distributors of manufactured gas to large markets are purchasing increasing quantities of nat- ural gas for mixing with their own fuel, thereby simplifying .“peak” load lems and making possible lower for the consumer. GOOD PROFITS SEEN IN 1931 AVIATION Leaders Look for Gains in Both Transportation and Pro- duction. P rates The aviation industry has experienced a year of curtailed plane production, but it has enjoyed a record-breaking year for passengers and mail carried, miles flown, routes operated and airport de- velopment, according to the Union Trust Co. of Cleveland. Leaders in the in- dustry are confident that 1931 will wit- ness improvement for profits in trans- port operations as well as in production, the bank says. Fully 255,000 passengers were carried on major air lines during the first nins months of 1930, compared with 173,405 for the entire year of 1929. The Nation is served by nearly 30,000 miles of air- stuffs and quick consumables, are in- dulging in an epidemic of unloading. ‘Wage cuts are being discussed. Business continues quiet in Berlin, evidently due to speculation on what the new year will bring. The government has decided to postpone further admin- istrative action on the price reduction program in order not to disturb the Christmas trade. This laudable motive will actually give little relief to business ways, an increase of more than 5,000 miles over a year ago. “Aviation's problem is to convince the 122,000,000 Americans who don't fly that air travel is safe and practical, says the bank in its magazine, Trade Winds. “The solution appears to be along four basic principles: “1. Further improvement in airplane performance, making for greater flying and landing safety. since Christmas buying is at a mini- mum. It is generally believed that in most respects bottom levels have been reached. Meanwhile, manufacturers are ex- tending the inventory and repair close- downs beyond the usual time limits. Banks are making preparations to show maximum liquidity on year-end balance sheets. is _resulting in higher | time-loan rates but in a plethora of call money. The uninterrupted downward movement on the Stock Exchange re- flects general apprehension that lower dividend declarations are probable in the Spring; it shows that investment confidence is lacking. TO HAVE FINAL FLING v Oldest Commissioned Vessel Navy to Be Mardi Gras Guest Before Retiring. By the Assoclated Press. One last fling before she retires is In store for the second line cruiser Rochester, oldest commissioned vessel in the Navy. The 37-year-old ship will be a guest of honor at the New Orleans M‘l{;‘l” e visitor to the Galveston Mardi Gras, February 18 to 23. in ‘The Rochester served ship of Admiral Willlam T. Sampso: during the Spanish-American War and used as a cruiser during the World War. She will be relieved as flagship of the Special Service Squadron by the U. S. S. Mayflower, which served for 27 ‘years as presidential yacht. The | Free Rochester will be scrapped at the Phila- delphia Navy Yard. Tokio Fire Loss $300,000. Lo Gstronee Tah weaken g n here housing the ministry of railways. The loss was’ estimated at 600,000 g ($300,000) by officials of g ‘W “2. Construction of an increasing numbefieol ]mulre mnvl:l‘imm : 3 “3. veloping public patronage b advertising and education. b “4. Continued lowering of aircraft prices and of air travel rates. “Progress along these lines is certain to be reflected by a change in the com- mon opinfon that ‘fiying is a fine thing—for somebody else.” Development of this program should make air travel more popular and eventually lead to in- creased private ownership of planes, as perfection of mechanical equipment ad- vances safety and economy of aircraft operation. ¥ “The industry is recovering from over- expansion, overproduction and the un- sound types of promotion, possibly nec- essary evils which it had to pass through to get on a sound basis. The short. time outlock for aviation is not so f: vorable as the long-time outlook. More failures may be recorded before the ad- Jjustment is completed. “Private ownership of planes will never approach the automobile owner- ship of one to every four or five persons. prices st decline was check- ed ki:npon;‘wn:{ b:]mlc use of powerful credit pum] only here, but abroad. “Ouf Federal Ritérve basking This, in turn, stimulated production both here and abroad. On account of our export of commodities and credit, loans to Germany and reparations, concentrated in the United States and France. Thus other countries were not able to get gold with which to buy 'm?ih:'bnm ernmen BOVe t, in India on & gold basis dm&m sjlver.” This, in , Teduced the purchasing power by 50 per cent of one thousand million people in the Orient. Nothing else could haj but what did. The bubbie had to burst.” Effect of Inflation. “Then, in your opinion, an unwise manipulation of money and credit was ‘u’:’lmr factor in bringing on the crisis?” was my next question, an Sen:tor zo:»unu:ed: & ~d ki “A credit system can stand only so much inflation, just lik= a balloon ’or a rubber tire; when it bursts, we have deflation. The selling of New York Stock Excl London, within 30 days and Means Committee re] tariff bill to the House. This was largely a fear-complex, thinking that the in- creased tariff would so decrease the; sale of British goods in the Uni States tlh:et v.héylwouldlnot be able to accumulate sufficient gold credit to their American debu.!'o Y “Then, you do not believe that any one faotor contributed to the present business debacle?” I asked. The Minnesota Senator has a way of looking his listener straight in the eyes and answering deliberately. He we"zxshon: “There were many contributing fac- tors. I think in turning to the gold standard England pegged the pound too high and France pegged the franc too low. The transfer of debts from allied taxpayers to American taxpayers, mak- ing possible the building of large armies and navies in Europe is also, in my opinion, a contributing factor. Diminished Purchasing Power. “In this country, through special privilege legislation, too nu'mermu to mention here, Supreme Court decisions and the lack of enforcement of the Sherman anti-trust laws, a condition arisen where an unfair share of the national income is drained from agriculture and labor for the benefit of corporate incomes. This has de- stroyed the purchasing power of the 170,000,000 people who work on the farms and in industr§. - What's the result? Production has outrun econ- sumption because the great masses of our people—the working people—have no money to buy goods with. Can you ever remember the time when the farm- :lrh.ndhthehwgrkt.l:“ man did not buy en he ha - il e money? He al “The hoarding of income in the of surplus by corporaticns in onhr'c:x escape paying income taxes and ing the money to Wall Street speculators. was another factor which helped de- smlgle!_he purchasing power of the One to every 100 families seems a more | P€C) reasonable goal. logical acceptance of air tr: :lfi nrecue’;: individual ownership. The prospects for the industry in 1931 are for further marked progress in volume of business and more profitable operations.” It seems Mexican Labor Leader Slain. eration of Mexican Workers, was assas- sinated yesterday as he left his place of business. The killing is supposed to have resulted over disputes between members of the Crom and the Union of ‘Workers of the neighborhood. e Accident Fatal o MOROCCO, Ind., Decembe: George . Meyer_ of Nashville, widely known as a portrait painfer,suf- fered 1 injuries yesterday wheg@ his aul ile skidded rom a road ¥pear here. The ‘was_identified thday by his brother, Robert Meyér of Chicligo. nter. 7 ().— ‘Tenn, by the per Alll THREE PARTNERS ADDED TO KUHN, LOEB & CO, Special Dispatch to The r. NEW YORK, December 27.—The nouncement oday _that three (Copyright, 19 s aNorth Americax Kahn, president of Kuhn, Loeb. rick M. Warburg is & son of Felix W burg and John M. Schiff is a sen Mortimer Schiff. All three boys h: brilliant scholastic records and have come well and favoral known banking circles since financial TS. Gordon Leith, who has been the " Lon: years,