Evening Star Newspaper, April 19, 1931, Page 65

News of Markets Pages 1 to 5 FINANCIAL AND CLASSIFIED he Sunday Star "Classified Ads Part 6—12 Page FRDAY FOREGASTS GAIS N BUSINESS ASYEARADVANCES Economist Sees New Demand for Goods at Reduced Levels in Prices. BUYING WILL SPEED UP FACTORIES, HE ASSERTS Abundant Capital at Cheap Rates and Aid of Federal Reserve Held Vital Factors. BY EDWARD C, STONE. David Friday, Washington cconomist, looks for a rising bond market during the remainder of tte year. a slowly ex- panding demand for goods and conse- *quenitly more activity among manufac- turing industries. While prices have been moving down- ward, costs of production have like- wise falled and labor .costs have de- clined -materially, and _commercial credit has also dropped. These facts, in the economist's opinion, make it pos- sible for big corporations to make prof- its even under present conditions. ) In the latest Investment Bulletin of | A. G. Becker & Co., Dr. Friday dis- cusses “Steps in the Business Revival,” presenting several new ideas and stress- ing some of the points he made in his address before the District Bankers' Assoclation several months ago. Economists’ Biggest Problem: ‘Every serious business depression pre- sents the economist and financier with two problems. The first of these is to explain how we got into it; and the second is to explain how we are going to get out of it. It is always puzzling to see why a period characterized by large production, employment for ali, good profits, and business optimism, suddenly change into a situation where men who are willing to work cannot get jobs, where profits are unsatisfac- tory, and where pessimism and gloom fill the industrial community. , after some 18 menths of decline ‘we find ourselves still near the bottom of the trough. Industrial production is around 35 per cent below the peak reached in the Summer of 1929, and ~ factory pay rolls are down by a like amount. There is also a good deal of unemployment in the building trades, in mines, and on railroads. People are wondering how full prosperity can be restoted. In fact, many persons do not. if peaple_cannot fi?i‘m‘fima Tevive? Entering Upon Revival. comes the it stage of business revival and we |tional Settlements had investigated | Recent rayon recovery has lulled. Stock now entering_upon t stage, Dr. Friday declares. Production will mount throughout the rest of 1931. —— the redl:ced retail vl‘ri:‘fl and mu iventories, luction will mount gradually throughout 1931, , 1929, to 82 i . A Tise of one- foyrth from that point would bring it to 103 at the close of this year. That iz would still be far from boom activity: in fact, i would be a full 10 per cent below normal. But it would make a - great difference in the general psycho- logical state of the community. The fmere_fact that employment is picking Yp once more will make people more ly to buy goods, and will accelerat recovery when once it is started. Satisfactory Profits. “I-will remove the doubts of invest- o, 100, 85 to the soundness of th bonds of corporations and as to .the « maintenance of dividends on their stocks. The result of this will be rising security prices in both the bond mar- ; ket and the stock market. - Since every © one feels ‘himself befter off when se- curities are rising than when they are falling, this situation will further stim- ulate consumer buying, especially in the durable luxury goods. “Profits will be maintained at satis- factory . levels even -at these lower * priees. An increase in production such + As has been here suggested will give us an average industrial output for 1931 Just about equal to that of last year. ‘The difference will be that while we ex- perienced a gradual reduction of output from 105 at the beginning of the year 1o 82 at the close in 1930, we should have a rise of from 82 at the begin- ning of this year to 103 at iis close. If this prediction is realized profits will be better this year than they were last. ‘The index advanced from 82 in January to 85 in February, this being the first upward movement since April of last year,” the economist forecasts. Easy Money Held Assured. at" length the cessity for cheap money in restoring a business up- swing. Capital must be abundant at cheap rates of interest to wi| out un- employment, he asserts. Hesitation and suspicion are passing and when they pass more completely, we can have a good bond market and a thorough busi- ness revival. It would not be at all sur- prising if the market for first rate bonds” would even pass the levels of 1928, he asserts The_Federal Reserve situation, which 15 always a guide to tre future of the bond zmarket, has seldom been easicr in all its history. With the return flow of hoarded "currency which will come when confidence is restored, it will remain easy throughout the Spring and Summer, the economist concludes. Financial District Comment, Capital Traction stock closed the week on the Washington Stock Ex- change at 33%, stronger than a week ago. The day's sales in various issues were. Potemac Electric Power 65 1953— $1,000-at 10815. Wi ) WASHING TON, D. C, SUNDA Y MORNING, APRIL 19, 1931. l Predicts Uptrend I DAVID FRIDAY, Washington economist, who forecasts better profits for corporations this year and looks for bonds to go higher in summing up the steps necessary to business revival. He also sees a manu- facturing revival. | { |Bankers Hesitate to Make Loans Abroad During Periods of Unrest. Special Dispatch to The Star. NEW YORK, April 18.—Political de- velopments in Spain and in the Argen- tine since Tuesday have completely up- set recent negotiations for the stabili- zation of the currencies of both coun- tries. The status of the $60,000,000 credit which was granted to the Bank of Spain early this month is now held to be uncertain in view of the change in government. The National Bank of Buenos Aires has withdrawn its support from the exchange market as a sequel to the resignation Wednesday of the Argentine cabinet. This led to a violent decline in the rate of Argentine ex- change and to further losses in Argen- tine dollar bonds. ‘The attitude of the new Spanish ad- ministration toward foreign credits is naively expressed in dispatches quoting the S h finance minister to the ef- fect t stabilization of the peseta does not seem to be urgent to the govern- ment. argument was that if the country was well administered it can produce a balance of trade that will the exchange back to parity. He subjected debtor nations “to a sort of tutelage.” Credit Arranged After Inquiry. ‘The $60,000,000 banking credit was arranged after the Bank for Interna- conditions in Spain and had expressed s to co-operate in stabiliz- ing the exchange of the country. A considerable of this credit was taken in behalf The Bank of credit. Just e Bank of Spain has proceeded in making use of the credit to stabilize exchange is not known, but there had been evidence in the market that sup- port was being given to the peseta just prior to the abdication of King Al- fonso, It obviously will be somewhat embarrassing to the Bank for Interna- tional Settlements to have its first im- portant effort at currency stabilization government. ernment has been pursuing a policy of stabilizing exchange through continu- ous shipment of gold to New York and London. These e: amounted to about $28000,000 on the last movement, anéd were expected to go on increasing. They were a consider- | able portion of the total imports of $25,661,000 reported in the March for- eign trade figures and the largest single item in the total gold imports for the three months to March 31 of over $76, 000,000. It now appears that the Na. tional Bank in Buenos Aires has, at least temporarily, taken the position a clearer political atmosphere develops. Effect of Changes. These incidents tend to discourage efforts being made to assist foreign countries with American credits, either the form of short-term banking | credits or in that of long-term loan: this line have come | Negotiations alon; up against a series of political upris- ings shce th: Fascist demonstration in Germany last September. Just when the international situation appears to have occurred this week in Spain and in the Argentine develcp and put a stop to credit arrangements. The March foreign trade - figures show another heavy decrease in exports and imports, compared with the {month last year. The value of outgoing trade was $132,000,000 less than in March, 1930, a reduction of 36 per cent. ' Incoming trads. dropped $80 000,000, or about 30 per cent. For ths March quarter total trade decreased $732,000,000, or over 36 per cent. In the same period imports of gold fell off $52,000,000 from the same quarter of 1930. They were sufficient, however, to bring the gold holdings of the | United States up to a new high-record vel. i (Copyright, 1931.) INDUSTRIAL PRODUCTION DECLARED OFF IN-MARCH By the Associated Press. NEW YORK, April 18.—Data now at hand indicates that industrial produc- tion, after advancing moderately in January and February over the ex- treme low of December, 1930, failed to register the normal seasonal rate of growth during March, a survey by Standard Statistics Co." says. liminarily computed,” the survey says, “The Standard Statistics Co. index of industrial production for. last month (after correction for seasonal variation, n Gas 47:5—8$1,000 at 100. ’ ‘Waskington Gas 6s 00 at 04%. Mergenthaler Linotype—10 Capital Traction—10 at 33 Mergenthaler Linotype—10 at 80';. Plans are progressing favorably for the annual pre-convention dinner of the District Bankers' Association to be keld at the Columbia Country Club on April 29. It is announced that F. G. Awalt, deputy controller of currency, ot 80%. 15, and W, P. Folger, chief national bank | but not for secular trend) was slightly lower than that for either of the two preceding months. On the other hand, it was above-the December low, indicat- ing that the past quarter has probably witnessed the trough of the depression.” ing Controller of the Currency John W, Pole. | Directors of 5. W. Straus Investing Corporation have declared the regular POLITICAL FACTORS AFFECTING CREDIT also ook the sttitude that foreign joans | in Europe meet with such a cool at- | tituds on the part of the new Spanish i In the Argentine the provisional gov- | rts to New York | that it will not support exchange until | be improving, incidents of the sort that ; same | FOREGNECONOMC SENTIVENT CLIES TOGHEERFULVEN Strengthening of Commodity Prices and Gain in Em- ployment Noted. STOCKS OF GOODS LOW PENDING BETTER DEMAND Heavy Industries Expect Improve- ment—Market Changes Dis- counted by Trade. Spegial Dizvatch to The Star. NEW YORI, April 18.—Cable dis- patches to the Business Week give the following survey of business abroad for | the week ending April 18: Europe.—The proclamation of the Spanish republic, though primarily of | local significance, has focused all at- | tention. The week otherwise was fea- tured by consummaticn of the sugar ! and lead restriction agreements and uneven but general strengthening of | comimodity prices from their recent low, { the reduction of unemployment—espe- | cially_in Germany—and conclusion of {the, Russo-German trade agreement, under which contracts may reach 125 million. Seasonal impulses are beginning to wane. The most nctable are cotton textiles, where the activity of four| weeks ago, which was beginning to assume boom proportions, has dwindled rapidly. The decline partly is attribu- table to the weakness of American cot- ton. Indications of price stability will revive demand. On the other hand, the heavy industries, though showing no appreciable immediate change, in- creasingly express expectations of im- provement. Sentiment Continues Hopeful. Business sentiment has held sur. prisingly firm in recent weeks, not- withstanding the recurrent weakness of commodities. and . fresh political tainties. Confidence seems gencral that | the deflation cycle fundamentally | passed its nadir and that an increas vacuum of unsatisfied demand lies somewhere ahead. Confidence in the underlying upward trend is not shaken. | Market vicissitudes are accepted as a | more cr less inevitable accompaniment of the changing business cycle. Never- | theless, future commitments are not yet | being undertaken except in rare cases. | nor are low factory and trade stocks being replenished. Investment confi- | dence remains hesitant and highly se-! lective toward new fingmcing. Tili this| hesifancy of new commitments thaws, | 1t cannot be said that confidence has been e-established. London.—The Easter aftermath has slowed trade. Cotton is unimproved, but there is a slight demand for light bleaching cloths from India and China. i | markets were better till Monday, when there was some recession. throughout lacks volume. ‘The. possibilities of the budget, to be announced on April 27, now dominate The deficit on the past year will exceed 115 millions. The chancellor actually budgeted last April for a sur- plus of 15 millions. It was at one time anticipated that the deficit would reach 250 millions, and, in so far as. this gloomy anticipation has been falsified by the good flow of revenue toward the end.of the financial year, traders are cheerful. But—a thing that the ordi- nary citizen too often overlooks and all chancellors remember—a deficit in | 1930-31 is very different from a deficit | in 1931-32. It is that anticipated deficit which will govern the budget. Employment Gains. Budget uncertainty at this time of the year always hampers trade. but this year. there is the added uncertainty as to what may be the prospects of a reve- nue tariff. It is unlikely that Snowden will impose such a thing this year, but it is a possibility. Berlin.—Anotper week has strength- ened. the widespread confidence that businass. has passed the period of black- est depression, is definitely on the mend. Principal supporting factors: (1) sub- stantial reduction of unemployment (224,000 in the second half of March): 12) continued firmness of the bond market: (3) strengthened prospect of a lower bank rate in mid-April: (4) stimulus affcrded by the anticipation of world-wide hydrogenation develop- ments. Finaneial ‘prospects are improving. Cheaper money is in prospect. The private discount rate dropped to 4% i per cent this week, justifies hopes for | a 1; per cent cut in the bank rate (present rate, 5 per cent) after mid- April. Unemployment is falling off encour- agingly, but it is too early to turn strongly optimistic over the new trend. Paris.—Apart from the further ex- tension of wage reducticns, business continues to be depressed and feature- Business 88 February industrial indices, just re- leased, show insignificent changes aver- aging 5 per cent below those of last year. March railway trafic showed a further slight decline, is now below the 11928 average. Registered unemploy- ment for the two weeks ending April 4 showed only fractional increases follo ing the rapid rise of the previous sev- eral weeks, Wholesale prices for the second week in April showed a distinct upward trend. with domestic preducts and foodstuffs again leading under the in- fluenge of recently increased tariffs. |ANNUAL SWISS FAIR IS BRILLIANT SUCCESS ‘The Minister of Switzerland has re- ceived word from the consulate general of Switzerland in New York, that the fittcenth annual Swiss Industrial Fair had a wonderfully successful opening. The first day's registration exceeded most optimistic expectations, high Swiss Trom il paris of the woRd boiag rom al of wor] attendance. o ‘This year's display is considered the most complete and attractive yet ar- ;:.lnr L The cablegram states that the e be open until April 21 and that Dr. Meile is the manager. The fair is attracting wider and wider at- tention every year. et AR LI 5 STOCK SALES UP. CHICAGO, April 18 (Special) —Cus- t mr purchases of Central Public Ser- vire Corporation $4 preferred stock dur- ing March reached a new high record of 20,373 shares, the largest total of customer stock purchases during any | ter was ill-founded. GEORGE L. STARKEY, President of the National Bank of Washington, who has just passed his sixty-ninth birthday anniversary, which was not allowed to go unnoticed. He has been with the same bank more than 42 years, is a member of the Washington Clearing House Assoclation Executive Committee and a native of this city. Business News mn Retrospect New Stock Market Gives No Sign of Emerging From the Uncertain Which It. Has Pursuing — Con- Course Ploan servative Traders Would Not Be Surprised Future Reaction. BY L A. FLEMING. Moving this way and then reversing. at like a river without a current, the New ! York stock market continues on its wearying way. Undoubtedly the street would welcome with open arms a complete change 13 sentiment as indi- cative of the end of the prclonged depression. How ever, opinions are by no means unan- imous concern- ing the near arrival of the much-to-be desired ‘ending of doubt and fnactiv- ity. One market au- LA Pleming,. henceforth the movement will be in the line of industrial recovery which will pace the general business better- ment. Inquiries made ih security cir- cles have failed to locatc any material bepefit for the stock market from the millicns distributed to the army of veterins, so that hope from this quar- ‘Some of the most conservative oper- ators-hold that the liquiddtion has nct been sufficiently drastic, that it must go further and they are not ih'a hope- less minority. Ome ‘cannot find much encourage- ment from bankers who are handi-| capped by the abundance of mcney | piling up in savings départments on ! DECLINE IN STOCKS LAIDTO UNGERTAIN TREND INBUSINESS Wall Street Sentiment Re- mains Pessimistic, Despite Signs of Recovery. ALL GROUPS AFFECTED BY STEADY LIQUIDATION Industrial Shares at Lowest Level of Year—Rails Below 1930 Figures. BY CHARLES F. SPEARE. | Special Dispatch to The Star. | NEW YORK, April 18—The down- | ward drift in prices of stocks has con- | tinued this week at a more rapid pace and with an increase’in the volume of transactions. Scattered liquidation has put in an appearance and has been a factor in depressing market values. Average prices for inductrial shares are at the lowest of the year and only 4 to 5 points above those of last December. A significant and disturbing tendency lately has been the slumping of leading ! manufacturing company shares to quo- | tations _approximating those of 1926- 11927, The average of raflroad stocks 1930, with a pumber of the issues that {for a while resisted the effect of divi- i dend reductions latterly among the con- spicuously weak members cf their group. The public utilities have so far main- |tained a fair proportion of the recov- (ery to the middle of March and are jabout 8 points average higher than at { the end of last year. The persistent decline in common stocks is in itcelf a contributing cause of the growing pessimism. It no doubt plays a part in the unsatisfactory trade returns. ‘There is no pressure on the market; no evidence of distressed sell- |ing has appeared. : The -financial dis- trict has been comparatively free of the itype of rumor that circulated freely ,last November and December. But it is sgain becoming apprehensive and un- certain in its forecast of the future. Gain in Business Activity. Evidence of many kinds supports the contention that the low point in the | business depression was reached either | three or four months ago. Since then there has been a small but definite gain {in the quantity of business activity and | rather more than seasonable expansion !in employment and in pay rolls. How: | ever, the trend is an uneven one, with gains in one major industry only help- ing to balance the losses in others. All n}gunme the effect of a prolonged de- pfession ‘working on the imagination of ihose in industry and in transportation inclines them to an increasing amount of conservatism, which is finally re- flected in the declaration of lower divie dends on their securities. Just how far reduced dividends, actual and probable, have been dis- counted in the prices of stocks is one of the unknown quantities of the pres- ent market situation. It has been inted out this week in an analysis by Col. Leonard P. Ayres that dividends were advanced more rapidly in 1929 than in any previous year and that E tinued to raise their rates of pay to shareholders until well into 1930. So far dividends have not” been pared down to the natural eéquivalent of shrinking net profits. AS a result we have today between 10 and 12 per cent of the entire New York Stock Exchange list selling at prices that return 10 per cent or more on the cost and about which they must pay interest but which they find little opportunity of using to advantage. Varfous sources of | income have been lost to the banks, the | mest_important the call money market, | for the reason that the rate is unin- viting, Interest rates on bank funds in Teserve cities have been reduced and everywhere there is a reefing of sails, just when every one hoped for clear | water and smooth sailing just ahead. Washington’s Prosperity. Washington is enjoying a season of | real prosperity in its retailing sections. The city is crowded with visitors and they are spendng their money freely while there are no evidences of hard times on the streets and local residen- ters are holding up their share of busi- ness. Mergenthaler. A word or two concerning Mergen- thaler affairs. The shares have gone off practically $20 from prices current a few months ago. ‘The statement was made in this col- umn at that time that “Mergy” was free from debt, that the company was possessed of $1.500, Liberty bonds and over a cool million in cash. Everything stated at that time is re- iterated with emphasis. Those who have gone most deeply into the affairs of the ccrporation are most enthusiastic concerning it. ‘The one and chief cause of depression that is reducing the busi- ness of this company is the consolida: tion of newspapers. The late Frank Munsey was one of the mcst ambitious of the merger managers and is suc- ceeded these days by the.Scripps-How- ard Co. which has just.scrapped the New York World. Every big paper that is suspended immediately releases a large battery of Mergenthaler machines and these must be assimilated before the “used” machines or “rebuilt” mar- ket is in good shape again. That there is any chance of the an- nual dividend rate being cut by a bad year now and then does not seem likely. Rallroads in Trouble. The' railroad situation fails to show signs of improvement. Burdened with State taxes, meeting the most serious : competition* from bus and privately cwned automobile, with large trucks competing for freight consignments and getting their full share of short hauls and part of the long distance freight. With millions of bonds approaching maturity owned by millions of investors becoming nervous over the question of the final payment of theése liens and with probabilities of cutting of divi- dends and further lmfl a resula of creasing com, lon, there can g“m"‘q\lfl&lzg but what the rails are indeed in trouble. Naturally in the few buying orders sent into the market they are not favored. A Living Tssue. One of the live issues of the present day in the banking business relates to the habit, admittedly bad, of under- taking the collection of deposits by banks from customers in other sections of the city than that in which the bank is located. ‘The Washington Clearing House re- cently gave consideration to this prob- lem and after a one-sided debate ruled that banks might retain any existing of this character but that any 40 per cent of the list giving yields of 6 to 10 per cent. Within the last fow months stocks have been quoted at a higher ratio of price to earnings than they were at the crest of the 1929 | boom. | Obviously there must be a more com- | plete adjustment in the market values | of stocks to a reduction in dividends and also in the number of dividends to be reduced to the size of ths cur- tallment in operating profits. Recog- nition of this fact has been more ap- parent this week than heretofore, al- though only oné important concern, the Vanadium Corporation, passed its { dividend. On_the other hand, the | Pennsylvania Railroad is making its May payment at the regular rate. The | Vanadium action aroused more than ordinary comment because of the fact that a few weeks previously the com- pany had offered for public subscrip- tion an issue of $5,000,000 bonds, whose immediate popularity and premium were based on a convertible price then within a comparatively few points of the stock. Subsequently the stock dropped to a level about 45 per cent of that at which the convertible option might be exercised. Distributing Political News. Political conditions in Europe and in South America have disturbed the minds of those holding and dealing in securities and in banking credits. The overthrow of the monarchy in Spain has been a probability for some time. The actual occurrence imme- diately suggested a ferment in Euro- pean_politics that might destroy much of the improvement that has taken place there in the past six months. I asmuch as there are no American hold- 1ings of Spanish securities, the political | developments were not accompanied by violent movements in the market for dollar bonds, such as those following the German elections last September and the several revolutions in South | America. The resignation of the Argentine cabinet and the policy of the National Bank cf withholding support from Ar- gentine exchange, together with addi- tional proof that the financial troubles of Brazil, Chile and Australia have not vyet been straightened out, unsettied the market for foreign obligations at a time when both common stocks and domestic industrial and railroad bonds were un- der much pressure. It was to be expected that with all of these confusing and disturbing inci- dents the investor in securities would be inclined to reduce his commitments and postpone such purchases as he may (Continued on Second Page.) i canvass on this matter and found that it was not far from a dead issue. Where practiced the collections are made by messengers and not by armored cars. ‘The consensus is that free collections oi deposits is but another service given withcut consideration therefor by the depositors; that it is an extremely dan- gerous practice and may increase the danger of a bank and to its employes in hold-ups and accidents. There is no good reason why they should be called upen for the service. It invites trouble and loss. 3 In these days of hold-ups and deadly shootings in connection therewith de- examiner, have already accepted invita- : quarterly dividend of 75 cents a share !single month, and more than double expansion of the business in the future ' positors should use the armored car lons. Several other dis- re expected, includ- on the preferred stock, payable May 1 to stockholders of record A‘l 18. the purchases in either of the first two nwngj of 1934 X to be considered. when necessary and relieve the the added burden. | has broken through the low average of | even after the panic corporations con- | ishes bank of’ Vige President of Stockhold- | ers’ Association Has Had | 40 Years’ Experience. | Holds Important Positions in| _His Home Town of Roa- | noke, Va. | J. Tyler Meadows, recently elected | vice president of the Stockholders’ As- sociation of the Federal Reserve Bank of Richmond, has been actively con- nected with the First National Ex- change Bank in Roanoke, Va. for 42| years, or during his entire business| career. Entering. the First National Bank in his hcme city in July, 1889, as & mes- senger, he was promoted from time to time, filling official positions as assist- ant cashier, cashier, vice president and | president. | On January 1, 1926, the First Na-| tional Bank and the National Exchange | | the charter of the First Nationel and taking the name PFirst National Ex- | change Bank. Mr. Meadows was elected | chairman of the bcard of the consol- jdated institution, which position he | still holds. For the past 10 years the Virginia | {banker has been president of the MEADOWS HONORED BY BANKERS AS LEADER IN FIFTH DISTRICT J. TYLER MEADOWS. Roanoke Clearing House Association. Distinguished looking, quick in finan- cial decisions and with four decades of | ered one of the ablest bankers in the | fifth Federal Reserve district. The Roanoke bank of which Mr. Meadows is chairman of the board is | an outstanding institution in that part of the Old Dominicn, having $1,000,000 capital and_$1,000,000 surplus. The | president is E. B. Spencer. i }Legislalors Urge Heavier Taxes on Stocks and Bonds Securities Owners Can| Afford Larger Payments | to State, Is Claim. BY JOHN F. MILLER. Not only in Washingtcn, but in sev- eral of the State capitals, attempts are being made to impose heavier tax bur- dens on interest and dividends, or what | is sometimes called ‘lazy" Owners of stocks and bcnds can afford to pay more toward tae support of | Government than those who lve by | the sweat of their brow, scne of the legislators think, and efforts are being | made to translate that idea int> law. | Every one who made a Federal in- | come tax return last mcnth will racall that an allowance was permitted for earned income. That allowance should be increased, the investigating staff of i the Congressional Committee on Taxa- tion . declares in a report just submit- ted. Since there can e no general reduction of the Federal tax for several years at least, the rnpeul of the committee means simply that some one else will have to make up the differ- ence. Mellon's Position. In all probability, Secretary of the Treasury Mellon will be in favor of the change. “The fairness of taxing rmorc lightly incomes from wages, salaries and professional services than the in- come from a business or from invest- ments is beyond question.” he said in & report on the subject a years ago. “In the first case, the income is uncer- tain and limited in durstion; sickness or death destroys it and old age dimin- it. In the other, the source of the income continues; it may be dis posed of during a man's life and i descends to his heirs.” In the States the struggle is usually between those who favor an income tax and the proponents of the so-called i | tangible tax. Now the intangible tax is simply a low rate property tax on stocks and bonds, 40 or 50 cents cn each $100. In Ohio, Gov. White has served | notice that he will npt approve a tax | on salaries and wages until an effort has been made to procure the incrsased funds which the State needs from a tax on investments. ‘The Ohio Legisiative Committee, headed -by Senator Robert A. Taft, has | submitted a report which probably meets the Governor's requirements. at least in principle. As a matter of fact, these intangible taxes have never met with much success, except in a few States. - In- Pennsylvania, for example, | it has been estimated that not more | than 20 per cent of securities subject to the levy are actually reached. Penalty for Dodgers. ‘The Ohio bill aims to forestall that possibility by providing plenty of teeth, and if it becomes a law residents who fail to report their holdings will be subject to drastic penalties. Increased taxes on investments are apt to result in one peculiarity. If the shares of an Ohio company are exempt in that State, but not in New York, the stock will be worth more to an Ohio resident than to 8 New Yorker. Just what the effect of this situation will be on the market, it is difficult to foretell, but one thing is sure—tax- exempt securities are bound to gain a decided advantage. (Copyright, 1931 {COTTON IN ADVANCE ON HEAVIER BUYING| —_— | Market Shows Renewed Steldinen; and Closes With Gains | of 11-14 Points. | { By the Associated Press. NEW YORK, April 18.—Cotton showed . renewed steadiness today on continued trade buying and covering, which sent the price of July contracts up to 10.56, or 13 points net higher and 20 points above the low level of yesterday morning. Closing prices ‘were within a point or two of the best, with the market very steady. Futures. closed steady, 11 to 14 points higher; May, 10.29-30; July, 10.55; October, 10.89-90; December, 11.13-14; January, 11.24-25; March, 11.45. Spot steady; middling, 10.30. May Jul December March BUSINESS HOLDING FIRM IN SECOND QUARTER Special Dispatch to The Star, BOSTON, April 1 -During the open- ing weeks of the second quarter, states the United Business Service in its cur- rent Te general business has held firm, hough still at low levels. The weekly index of the United Business ‘Thermometer illustrates this l‘t:lbfllly. SUPPLIES OF GOLD ARE ON DECREASE Depletion of Mines Has Re- | sulted in Curtailment of Precious Metal. | | i | | BY J. R. BRACKETT, Associated Press Business Writer. NEW YORK, April 18—The gold income. | Supplies of the world are running out— | this despite the seemingly paradoxical fact that monetary gold stocks of the | United States have reached the highest level in history, $4,702,000,000, accord- ing to the latest condition statement ! of the Federal Reserve Board. Despite the fact that gold production increased from 19,500,000 ounces - in 1929 to 20,500,000 in 1930, gold mines{ everywhere are being depleted. -The 1930 iricrease Tepresents almost solely | the increased effort to produce & com- -own price remains fixed by law, wiri: the price of the things needed 'to jcduce it goes down-~in an economic depression. : Affects Credit Situation. ‘The United States’ share of the mon~ etary gold represents almost half of the total world gold stocks of $10,900,000,000 France is next, with well over $2,000,- 000,000, and England third, with about $725,000,000. ‘The predominance of gold supplies in America, with its consequent stringent effect on the credit situation 'of other countries, has aroused wide protest, many feeling that gold must be distrib- uted or its flow inasmuch as there is small an increased per cent; in the next 10 years at the rate of 80 per cent and in the last 20 years only about 12.5 per cent. The great Rand field in South Africa produces more than one- half the world’s supply, and that field appears near the crest of production. Mining engineers believe that output will go off fast in the next 10 years. The gold delegation of the League of Nations believes production is almost certain to drop materially everywhere. Canada's production has increased from about $16,000,000 in 1914 to more than $43,000,000 in 1930. Probably it will continue to increase, but it is not likely it can assume the place of me, Rand. Aside from Russia, the world has been well explored for gold—even by | airplane and radio divining rod—but large new deposits have not so far been found. ) Ore of low gold content probably will be more exhaustively mined as methods of productions are refined, making profitable mining from bad ore. this and other alternatives show no promise of maintaining the yearly in- crease of swpply at 5 per cent of the| existing supply, which, at most, is barely sufficient for the increase in credit, which business is certain even- tually to demand. Gold Production. Gold produced in the last 435 years has an estimated value of about $21,000,- 000,000, and the world output reached its zenith in 1915. Since then’ there hds been an increase, but it's very slow. ‘The idea of some sort of international control of gold movements has been current for some time. The Bank of International Settlements, set up pri- marily to take care of the transfer of German reparations to Germany's erst- :vhlkle foes, is often proposed for that ask. George E. Roberts, vice president of the National City Bank and noteworthy gold expert, holds that “there is need for a more general understanding that no country has anything to gain by piling up against another country which must be settled in gold. * * * It is to the interest of all peoples that the normal equilibrium in trade and capital movements shall be maintained.” NATURAL GAS SALES INCREASE IN MEMPHIS Special Dispatch to The Sta | P;ges 5 to 12 TRADE EXECUTIVES DECLARED VIGTIMS INMODERN SYSTEM Stuart Chase Says They Have Become Slaves of Other Men. PLEADS FOR SERITUAL CHARACTER IN INDUSTRY Believes Doctors and Housewives Are Guardians of American Integrity. BY JOHN F. SINCLAIR. Bank of Roanoke consolidated under experience to his credit, he is consid- | Special Dispateh to The Star. NEW YORK, April 18.—Better rather than bigger business secms to be the slogan of Stuart Chase in his new book, The Nemesis of American Business.” America, he points out, has all the natural resources, mechanical equip- ment and superior technique for put- ting together the components of the good life. It has the opportunity to create a civilization so fine and lofty that from its heights Americans may look down on the celebrated glories of Athens in the days of Pericles. But, he adds, Americans have done nothing of this sort. While they haven't made themselves the slaves of 3 they have made themselves the slaves of themselves and other men. Not physically, of course, but mentally and spiritually. Mr. Chase describes the unbelievable bondage of the big American executive whose eves word, movement and ges- ture is qui Mwnhwmmt::a the clerk who has part, and though Mr. Chase may, with the ardor of a protest writer, overstate the case, there is much in what he says, for he is an expert public accountant, as well as a business writer who has the gift to dramatize the driest and dullest of economic subjects. The Sues Camal. With as much as 50 per cent of Brit- ish shipping idle in her harbors, and the rest of the world’s bottoms at a low tide of activity, it is natural to ex- pect a sharp decrease in such key ma- rine highways a3 the Suez Canal. The receipts for the 1,000,000 helow-those of riod last year, and totaled around 1000,000. The first 10 days in April, however, raised the income above that | i most heavy tonnage probably already passes thrcugh it, rather than lose time on. longer routes. French Trade With China. For some time past France has been regarded as a “has been” in the China trade. America, England, Russia, Js pan and Germany were said to have gnawed away her economic influence in the Far East. tely information has trickled out from Southern China that discredits the theory that French trade with China had dried up. Prom Hanof, on the northeast coast of French Indo-China, a railroad runs northwest through the steamring jungles, between the enormous crevices’ of the mountain ranges, into the river basins of Yunnan Province, where it terminates in the capital, Yunnanfu. For the past few years French trad. ers Have rolled up their sleeves and pushed business transactions with the Chinese merchants of that province. The French have so stimulated trade there that they are also draining Schechuan Province, to the north, the produce of whose densely plain used to go down the Yangtse to American ‘and British merchants in Shanghai. So it is apparent that the French have cleverly used their tropical rail- road as a sort of pipe line through which the wealth of interior China is being pumped out the back way into French vessels, instead of to British, American and Japanese traders, who have been waiting empty-handed out in tront. Italian Oil. The Italians are elated and European oil circles interested in the unusual flow from Italy’s newest oil well, near the city cf Parma. Experts of the government estimate its initial yield at about 200 barrels a day. All the other wells in Italy produce only 175 barrels daily. It is a source of gratification to the Mussolini government that a new oil field has been discovered, for it con- firms the belief long held that consid- erable oil exists in this regicn of Italy. Should more be found, it will mean a MEMPHIS, April 18.—Memphis Nat- ural Gas Co., affiliated with Appalach- ian Gas Corporation, reports Sales of natural gas for March of 953.114,200 cubic feet, against 798,451,500 cubic feet for March last year, a gain of over 19 per cent. Sales for the 12-month pe- ricd ended March 31, 1931, totaled the sale of gas only dur- ing March, 1931, were $172,413, against $145,397 for March last year, a gain of over 18.6 per cent. Tomrn OIL MEN ELECT TANT. PHILADELPHIA, April 18 (Special). —Walter F. Tant, Drpufuldenc o!m Automatic Cot tion, Detreit, elected president of the Americ: Burner Association for the second con- secutive year, it was announced from ccnvention h:i quarters here. . WAS. n_Oil tion de- dend of an- great reduction in Italy's imports from abread. In the past Italy has sought %o M- sure a war-time supply by cShtracting, as France has done, with the Soviet government. Russia lies outside th ring of inter-European conflict and ‘would be‘ lel;ulgnly t:)"!-lke lldfl.'“lg would give greater parity , however, to ml:nd fi:’?"mcmsm ute for ‘which come Mosul ‘will port, otn%elru'. on the Mediterranean Silens. ¢ W) and produc- tive of nothing but picturesqueness. But under French rule this North African om:a"bu itiful ptvvlae-.m” en! u Ribbons of it and macadam through have tied D supplemented By extend to