Evening Star Newspaper, October 4, 1931, Page 67

News of Markets Pages 1 to 4 Part 6—14 Pages SATURDAY TRADING SESSIONS RESUMED ON D . EXCHANGE Lanston Monotype Center of Interest—Less Stock Is Offered for Sale. CLOSES WEEK AT 70 1-2; OTHER ISSUES QUIET New Bond Rating Indicates Util- ities Growing in Favor. Local Notes. BY EDWARD C. STONE. Opening on Saturcay for the first time since last June, the Washington | Stock Exchange recorded light trading yesterday. Interest centered in Lanston Monotype, which developed heavy sell- ing during the week in connection with the reported settlement of an estate. Over 500 shares changed hands on Thursday and 400 more were sold Pri- day, but selling had apparently dried up yesterday, as only 50 shares came out. Four 10 and 5 share lots sold at 70!, against a final sale Friday at 70%. The market closed with 70% bid and 75 asked. Other sales yesterday included a $2.000 turnover in Capital Traction 5s at 74 and two small transfers in Wash- ington Gas 6s, series A, at 100. The final sale in the stock division was in - Potomac Electric Power 6 per cent pre- ferred, which again moved at 111. Capi- tal Traction stock, in which there is such wide local interest, did not appear on the board, but closed the week with 27 bid and 29 asked. Practically none of this stock has been sold in the past few days. A summary of business on the local exchange in September shows that sales Id up unusually well. Quotations ve also held up better than on most of the other exchanges in the country, the market not having been called upon to absorb any large amounts of stock. except in the case of Lanston. Although prices have been lower, as a .rule they have been firm. Funds Kept Largely in Banks. Signs indicate that there is probably more money hidden under mattresses, in vases on the family mantelpiece and | FORECAST BY D Recovery Believed Near by, Washington Economist, Who | Ridicules Pessimistic Talk. | | See$ Decline in Interest Rates and Acceleration of | Suburban Home Building. “The United States has witnessed a | typical price revolution g<ing up from 1896 to 1920 and downward since then," said Dr. David Friday. nationally known | economist and satistician of Washing- | ton, at the convention of the Micmgnn‘ Building and Loan League. He em- phasized further that “the attempts of varicus movements and commodity pools all over the world and in the United States to stabilize prices” are the major causes of the present business situation. Dr. Fridey said that the next change in prices would be upward, but that { taking the next 10 years together, the | drift would be toward lower prices; ac- { companied, nevertheless, by a period of prosperity, just as the years frcm 1924 t0 1929 were prosperous, although prices were falling slowly then. He indicated | that recovery was at hand and illus- trated the absurdity of pessimistic atti- tudes of business and financial leaders by quotations taken from their address. {es in late 1921, just before the last bus! ness recovery. | In enalyzing the effect of this price | revclution on building and loan associa- 1ons, Dr. Friday pointed out that it has | been the trying period for many finan- | cial instituibns which had been need- lessly created by too mueh mixing of investment for savings, 'finance and commercial banking. -FINANCIAL AND CLASSIFIED. he Sunday Sta WASHINGTON, D. C, SUNDAY MOR) GRADUAL PRICE IMPROVEMENT R. DAVID FRIDA Y DR. DAVID FRIDAY. Dr. Friday predicted that with falling prices there would also be a decline in interest rates. As a result, the United States Government would be in a shert time borrowing money on long-terms bonds at less than 3 per cent interest. This will be partly brought about by the now increasing confidence of the people 50 that the more than one billion dol- lars in currency now fearfully held onto will again be Invested in Government bonds and building and loan associations as well as in other forms of investment. Dr. Friday predicted a moderate building boom and an astcunding in- crease in the construction of single family homes, particularly on the out- skirts of the city. This home building for the motor age will call for enor- mcus sums of capital and the building and loan associations will supply the greater share of this capital. | { IVESTHENT BOND MARKETINPROVES Better Tone Evident at End of Week, Although Aver- ages Are Lower. | i | Special Dispatch to The Star. | GOPPER PRODUGERS World Parley to Be Held. Piea for Tariff on Metal Prepared. By the Associated Press. 1k PLAN CURTAILMENT LOSSESIN STOCKS ARE SERIOUS BLOW TONATION'S TRADE Selling by Foreign Investors Is Chief Factor in Mar- ket’s Decline. LIQUIDATION BY BANKS HAS DEPRESSED PRICES —_— Wall Street Forced to Buy Enor- mous Security Offerings From Many Sources. BY CHARLES F. SPEARE. }Special Dispatch to The Star. NEW YORK, October 3.—The secu- rity-holding public and leaders in the benking world have not yet been able to calculate the effects of the gold sus- pension by Great Britain, followed this week by similar action on the part of Scandinavian countries and a general dislccation of international exchanges. This confusion has led to further liquidation of stocks and bonds, new low averages for both and a deprectation in Classified Ads Pages 5 to 13 | NG, OCTOBER . 4, 1931. N AN A \‘\Q \ | values in September, continuing into October, of staggering size. ‘The new element in this situatfon is the selling for foreign account. 't has made its strongest impression on public utility stocks, especially those of the greferred class, which have been popu- lar in the past two years with British investment trusts and insurance com- anies. Volume of Trade Reduced. The extent and the duration of this selling is the unkncwn quantity in the |present morket outlook. Associated with it is the possibility of a further extension of the area within which gold is no longer Lhe monetary basis. All { this tends to restrict the volume of trad- ! Ing between ccuntries and, for the time | being, adds to the difficulties of na- tions that have borrowed abroad and are showing an unsatisfactory trade b ance. Immediate obligations, however, are being met. These include dollar in- terest and sinking fund payments by the German government and by a score or more of German municipalities and cor- porations; also those due from various South American and Canadian bor- uncer loose bricks by the fireplace than; NEW YORK, October 3.—While at any time in history, according to a | bonds dropped’ an average of about 3 Minneapopiae fovestors” Syndicate of | more points this week, and at times the “The regular Federal Reserve figures | volume of liquidation approached rec- showing th> amount of ¢ =ncy in cir- | ord proportions, the six market sessions fite years—or §1,000,000,600 above | Velcpments. and the week closed with noimal. With such a lerge amount of currency outstanding, yet with busin-ss subnormal, it is c.ar,_ that where a co'lar bill changed hands 10 times dur- ing a day in 1929, it is carried around ;r; some one’s pocket all day long in “In past depressions, this hoarding has been one of the last developments b2fore a general upturn. With such a large amount of currency in the hands of the ultimate consumer, it takes only a small increase in the speed of circula- tion to make a s'gnificant improvement in trade,” the survey says. Some reports similar to the above regarding hoarded money have been heard in this city. Extensive inquiry among safe deposit guardians in ti local banks proves that very little money is being kept in this While safe deposit box holders say little about what they place in the boxes, any such prac- tice would soon become known. Their money is on deposit in th2 banks and is one reason why such a good depcsit showing is expected on the controller’s next bank call. Utilities Bonds Gaining Favor. Reflecting major alterations in eco- Tomic conditions, the type of new offerings over the past few years, only 36.7 per cent of the aggregate value of corporate bonds listed on the New York Stock Exchange are now gi: the highest rating of AAA by Moody's Investors Service, it was an- nounced vesterday. Five years ago, on July 1, 1926, the AAA classification em- braced 44.8 per cent of the total, the as well as changes in | | a1l markets in a considerably better | frame of mind. { _The fact that New York, with one of | the world’s few stable currencies at its { back, could absorb the offerings from | all over the world that have poured into | the local markets as foreign investors | sought to turn exchange fluctuations into profits was itself of considerable significance. Talk of closing the ex- | change, or even setting a scale of mini- mum values, as was done when the | Stock Exchange reopened after the 1914 | shutdown, quickly evaporated with the | sudden uprush of the bond market on Friday. This was visual proof that the market's potential strength was still undiminished in spite of the flood of selling. Foreign Bond Selling. The selling of foreign bonds in the last week of September had nothing to | do with the financial stability of the | countries whose obligat'ons were in- volved. On October 1 between $65,000.- 000 and $70.000,000 in interest and sinking fund payments had to be met in New York. In most cases sinking fund moneys had been received here well In advance of the date. But in- terest payments are usually held up u til the last few days, and the precip- itous break in foreign exchange quota- tlons the week before had found many foreign governments and corporations with insufficient funds in New York to pay their interest coupons. This phase of foreign exchange, how- ever, provided its own corrective, and near the week end, with the pressure of compilation shows. The most s.riking changes in the fiv vear period, Moody's states. are th improvement registered by b-nds of pub. lic utility companies and tae remov dollar purchases off the market and ex- change quotations advancing, bonds came back sharply. There was good a bond payable in {New York funds and backed by the of many railroad issues from the pre- mier group. The AAA rating is now held by 40.6 per cent of the utilities as | contrasted with only 24.6 per cent in 1926, while rails in the AAA class now comprise only 43.4 per cent of the total, @&s against 59.4 per cent in 1926. ‘These changes in quality have vari- ous causes,” the survey adds. “The ga! by utilities is due in part to the large flotation of high-grade utilitiy bonds during recent years. Many railroads, . on the other hand, resorted to financing by means of junior issues during the boom period, thus aiding in lowerin; the general standard of the rail list. Gleaned in Financial District. Local bankers are looking forward vith keen interest to the e Bankers' Assoclation which opens at Atlantic City tomorrow. The local attendance will not be as larg>. how- sver. as when the sessions are held on the West Coast and when prosperity is a little more abundant. The Washington Loan & Trust Co. has published a pamphlet on “European Economic Stability,” written by Norman E. Towson, assistant treasurer. It con- tains some most instructive facts on the whole reparations problem. Gov. Eugene Meyer of the Federal Reserve Board announces the appoint- ment of Chester Morrill as secretary of | the board. succeeding Wa'ter Eddy who resigned on account of ill hea‘th. Mr. Morrill has been s>cretary and g-neral counsel of the Farm Loan Board. Electric output of subsidiaries of North America Co. for the third quarter this year was about 2': per cent below that for the corresponding quarter in 1930. This compares with decreases of 4'¢ per cent in the first quarter and 7 per cent in the second quarter this year. Output for the nine months was off approximately 425 per cent. A. M. Nevius, vice president of the Riggs National Bank, returned a few days ago from his vacation spent in New Hampshire. ‘Washington clea ring hous: figures for Saturday, $4,939,049.94 04 Japanese Gold Movement. By the Associated Press. The Commerce Department reports there will be no interference in Japzn with the free outward m-vement of gold from that country and that the Yokohama Specie Bank may ship from $25.000,000 to $30,000,000 to the United States. The Japanese finance ministry is con- tinuing its efforts to reduce national expenditures, though reports to the de- flnmmt say support is alleged to be cking. g | e credit of a government whose stability is not in doubt, sold down around 78. In the domestic field, two factors helping railroad bonds were the con- clusion of hearings by the Interstate Commerce Commission on the carriers® application for a rise in freight rates and the agreement of the Eastern lines jon a consolidation plan. But the con- | tinued decline in rail traffic, together [ with the tremendous pressure exerted }by foreign holders of American securi- | ties, served to keep the index pointed downward. New lows were reached on h successive day until Friday. New Offerings. Utility bonds that had hitherto found favor even in the wildest selling panics {1y down as English investors sought to icash their exchange premiums. Public | utility preferred stocks sold at prices | that " indicated demoralization in this { market. But the strength displayed near the end of the week served to show that, once the foreign selling is completed. the market will swing sharp- 'y back from an oversold condition. During the week new bond offerings amounted to $23,812,000, against $344,- 1000 the previous week and $70,063,000 | in the same week of 1930. (Copyright, 1931.) \RESERVE BANK HEAD ASSUMES NEW DUTIES Lynn P. Talley, who recently resigned | as governor of the Federal Reserve Bank | of Dallas. Tex., to become chairman of the Board of Bank of America N. T. |& S. A, California, has assumed his | new post. The new chairman, though not yet 50 years of age, has held every im- portant executive position in the Fed- eral Reserve Bank of Dallas. ' Begin- ning his career as a stenographer in a cotton firm at Temple, Tex., he later worked for a Texas railroad and sub- sequently entered the banking field in 1903 as an exchange teller with the City National Bank of Dallas. His banking career continued with private banks until 1915 when he was elected cashier of the Dallas Reserve Bank. Capital Is Reduced. the New York Stock Exchange of a reduction in capital to $28,150,826 from $34,354,131, this being a reduction in capital represented by each share of outstanding common stock to $1 & share from $5 & share, NEW YORK, October 3.—Indications that discussions for further curtailment in copper output will be in progress before the end of the manth were seen today in reports that all of the im- portant in reports tkat all of the im- will send representatives to New York. The trade interpreted thes reported coming to New York of representatives of Rio Tinto, Katanga and Northern Rhodesian producers as indicating finally a real willingness to co-operate in finding a lasting solution of the problem of overproduction that has harassed the industry for the last two years. Continuance of overproduction is estimated in trade circles already to have cost the industry between $20,- 000,000 and $32,000,000, on the assump tion that the price of copper could have been stopped in its drop either between 11 and 12 cents a pound, or between 12 and 13 cents. It was said that solution of the prob- lem of overproduction will be either voluntary curtailment of output, with a complete shutdcwn of most of the copper mines of the world for several months to be followed by resumption at a rate low enough to permit fairly rapid reduction of stocks, or else there will be a determined drive by Unit States producers for a copper tariff. Domestic leaders in the industry were said to be confident they could obtain support of most of the large consumers of the metal in a plea for a high pro- tective tariff, on the basis that a flex- ible tariff would go far to effect a stable price. They believe fabricators would even prefer to pay more for copper if price stability were assured, rather than take chances on obtaining metal for less in a market fluctuating as uncer- tainly as the present one. It was reported that meetings already have been held as to the best way to hasten tariff action, and charts and statistics are being prepared for presen- tation to the United States Tariff Com- | mission at its hearing late this month. The tariff hearings are scheduled to open soon after the producers’ confer- . CHICKENS AND EGGS YIELD LARGE RETURN Maryland Farmers Get Cash In- come of $9,305,000 During Year of 1930. an | of the bear market were marked sharp- | SPcial Dispatch to The Star. BALTIMORE, October 3.—The gross |income to Maryland farmers from chickens and eggs produced in 1930 was | about $12.292,000, according to Richard C. Ross, agricultural statisticlan for the | Maryland Crop Reporting Service. This | amount represents about 15 per cent of | the total gross income from all crop and live stock sources last year. Cash | Income from chickens and eggs sold in | the same period amounted to $9,306,000, |and the value of chickens and eggs consumed on farms in 1930 is estimated at $2,986,000. Farmers received about $5,670,000 for eggs sold (except for hatching) during ithe year, and it is estimated that the i value of eggs consumed on farms was about $1,192,000. “The total value of all | the eggs iaid during the year is esti- | mated to have been $7,200,000. Total layings in 1930 were about 320,000,000 eggs, of which 252,000,000 were sold (ex- cept for hatching), 53,000,000 were con- sumed on farms and 15,000,000 were used for hatching. The total value of chickens produced in 1930 is estimated at $5429,000, of which cash receipts from sales amounted to $3,636,000 and the value of chickens consumed on farms to about $1,794,000. Maryland farmers produced close to 7,144,000 chickens last year, of which 4,784,000 were sold and 2,360,000 were consumed at home. Total value of all chickens on Mary- land farms on January 1, 1931, was estimated at $4,255,000. This was about | 1,000,000 less than on January 1, 1930, | and about $436,000 less than at the first of 1929. Numbers of all chickens on hand at the first of 1931 were estimated ens on hand on January 1, 1929, SILVER QUOTATIONS. NEW YORK, October 3 (#)—Bar silver steady, Ys higher at 28. rowers. It is evident that the latest decline in | market values has crippled a considerable {body of American holders of stocks on | borrowed money, for the selling this | week credited | prominent element in the cecline. After | the panic in 1929, when brokers’ loans to banks has been a! " |Exchange Frowns | On “Bear Raids” in EXPORTS OF STEE DROP IN CANADIAY ted | reached the high level of $6,804,000,000. | there was a rapid shift of such loans | | from Wall Street to the banks. In the | intervening period brokers' loans have | | decreased $5.632,000,000, or 80 per cent, | but the collateral loans of the banks | ;’K’T“:'!:“;flvn.’:“":‘ g;;g edfl;,;';:-nml; Jas | Imports Also Lower in Au- ituation cor- | Tection ot hanking and market condi-| gust, Says U. S. Commerce Department Report. INSHARP DECLIN rection of banking and market condi- tions would not be accomplished until | |the lending institutions exhibited a | collateral loan total nearer to normal | | than that of today. This process of | readjustment is now going on. Unfor- | tunately it coincides with much selling | of securities for the account not only | | of banks in distress but by those whose | policy it is to build their reserves to | a level three or four times higher than | |is regarded as sufficient under ordinary | | conditions. ~The September 30 bank | statements now being published exhibit | { the extreme caution characterizing cur- { rent banking operations, and explain | the cifiiculty that borrowers with strong | | statements "have in obtaining accom- | | modations. Values Are Disregarded. ‘The market has long since beyond that point where values, on present earnings, current liquid as- sets, management, dividend stability and income yield, are given considera- tion. New York is today the one inter- national market into which the offer- ings of all other exchanges may be | poured. It is beginning to be a ques- l!lon of how much longer it can con- | tinue to buy what every other money | center wishes to sell to it. The supply Steel corporations, which placed into effect on October 1, wage reductions programs affecting thousands of em- ployes, were hard hit in foreign trade during August, according to a Com- merce Department’s teport made public yesterday on the volume of foreign trade in iron and steel products. Palmer of the iron and ste<l division of the department, declines were recorded in both the export and imports trade in the United States in these products dur- ing the month. Exports, totaling 73,338 gross tons, were 11,128 tons less than those during July, while imports were 7,051 less and totaled only 30,139 tons, the report stated. b On the dafly averags exports were 2,336 tons and imports 972 tons, against 2,725 tons and 1,199 tons, respectively, in_July. Twenty-seven of the 46 classes of passed | based In the report compiled by Joseph W. ' Brokers’ Comment = DOLLAR AIDS TRADE |Member Warned He Must - A Be Able to Prove State- |Cheaper Currency Has Same ment in Letter. Effect on Industries as Protective Tariff. | ’ By the Associated Press. NEW YORK, October 3.—Indiscrim- inate use of the term “bear raid” by | s'lx;ckl exc;unge hol;m indthes: r:,ur:;t Special Dispatch to The Star. circulars has been frcwned upon by the Business Conduct Committee of the TORONTO, October 3—Now that | the depreciated value of the Canadian stock exchange. No officisl announcement was forth- | dollar acts as the equivalent of a new protective tariff of from 10 to 15 per coming from the exchange, but It was 1 that at e by s one Trokera®s | conit fthe Dominion 1s beginnirig to cals future its executives must be prepared ' cCulate the effect of this benefit on to substantiate statements ascribing home industries and t:ansportation. movements in stccks and bonds to “bear | Naturally. the first result has been raids.” | to restrict the transfer of funds to New | _The exchange confirmed the report | York for speculative purposes and to that the letter had been sent, but made | diminish notably Canadian retail buy- | no explanation. In brokerage circles|INg in towns near the border. The |t was interpreted s a move to dis- |5econd will doubtless be an egually courage comments that may be based on nothing more than gossip. Market | | :ll:dorderl for (:lniltd lsuws rnlnuhc; commentators frequently take it for | tured goods, with resultant increase of granted, In the absence of other ex- | ?Tw'fld for the products of Canadian lanations for a decline in stocks, that | factorles. R opmery it bk responsible. The danger that the protection thus | 1t is understood that exchange au-|Sfered to domestic industries from harities do not believe that short sell- | fig‘{;“;n fng;mim‘!n mll(ht b;d "‘{:i ing has assumed the proporticns or | iicd by the dumping of goods by | caused the damsge attributed to it by marked decrease in Canadian whole- | is adjusted to the day-to-day capacity of the market, so there are no violent declines and no panic. There were two constructive develop- ! ments this week; namely, the agreement i i eprecia- products included in this export trade, | many persons, some in public life, and | 19Ving some advantages in the deprecia Palm°r said, showed reduced shipments | have for some time deprecated the use in August, ageinst 18 increases and one | of the term ‘“bear raid,” believing that instance in which the trade remained |often there is no basis for the suspicion stationary at 320 tons in each month. | that such a maneuver is going to brezk | reached by the executives of the East- In general, he said, both increasss and ern railroads in the long-pending mer- decreases were in small amounts—the only noteworthy gain being that in slack steel sheets. Shipments to Europe and Africa were greater in August than in July, accord- ing to Palmer's report, but those to all other countries were less. Trade with the countries of North and Central America and the West Indies, however, took in all 48.6 per cent of the August shipments, while those to South Amer- ica accounted for 12.5 per cent. The increased trade with Europs required 9.9 per cent of the month's total and that with Africa 2.2 per cent. Of the imports of iron and steel prod- ucts during the month, 21 of the 34 classes of products register=d decreases. as compared with 9 increases and instances in which there was no trace in either month. Continuing as the chief supplying country, Belgium sup- plied 9,579 tons of miscellaneous iron and steel products. Germany was sec- ond with a total of 7.909 tons. total of 6,304 tons included 3,094 tons of scrap. 2,116 tons of ferro-manganese and 1,004 tons of pig iron. Soviet Russia led all the other sup- pliers of iron ore imports. Reserve Official Goes Abroad. NEW YORK, October 3 (#).—Dr. W. Randolph Burgess, deputy governor of ithe New York Federal Reservs Bank, was cn his way to Europ: today to attend, according to an official "an- | nouncement. the regular monthly meet- ing of th> Bank of International Settle- ments at Basel, Switzerland, on October 12. 1t is expected he will return to New York immediately after the session. ger, and the purchase by the National City Bank of New York of the con- trolling interest of the Transamerica Corporation in the Bank of America. It will be years before the railroad con- solidation can effect economies to be translated into higher net operating in- come. Its present value as a market | influence is mainly sentimental. It does, | however, illustrate the way things “get to be done” in a time of national crisis that are impossible to acconplish in a period of general material satisfaction. There was about as much harmony jamong the Eastern railroad presidents in their merger conferences as there has been between the delegates at Geneva of France and Italy. or between |those of Germany and France and France and Great Britain. Statesman- Iship and the sinking of prejudices and passions finally conquered in this case, as they will abroad, because critical economic conditions compel them. As a permanent contribution to a more stable railroad situation, especially in establishing a rate structure that will prevent a dislocation of credit such as is now being witnessed, the consolida- tion, if granted by the Interstate Com- merce Commission, is of great signifi- ““The bankl 1 e nking consolidation proposed is important in that it is snot%erp%kp in reducing financial operations to their proper sphere. The Transamerica Cor- | poration was a typical product of the 1028-29 era—a twin of the Goldman, Sachs three-headed set-up. It mixed the functions of banking and of the underwriting and distribution of securi- tles. In the same way the Alleghany corporation has attempted to build a securities pyramid on a railroad trans- portation . It has frequently been pointed out |an ndon when England went oft here that 75 per cent of '.x: nnma“nl Lh: fim He found both London troubles exposed in Wall Street in the [and Berlin cheerful, compared with the past two years have their origin in |financial center of America. The rest the effort of individuals or institutions |of the country, however, takes its cue to make a fortune or a record in some |from New York. Its sttitude toward line of enterprise about which they |what it buys or sells is affected by know nothing, instead of stick to | the quotations of securities. the job in which they were ‘oaring The stock market will not Repuie ‘bonds dec! 8. Trade Outlook Unchanged. Ve nii stocks. are stabile There s little change in the business | ized. Average prices of stocks have ::u:mk, Il: c';n b expected ‘ declined 50 per cent -lnu'h reb:muny” at merchants, manufact: - over heut dn Whe tributors and those ennced“rl:l'l or:‘. e Toes 1¢ NEW YORK, October 3 (#).—Gencral | at 4,728,000, the same as on January 1, | trade will make commitments in Realty & Utiiities Corporation notified | 1930. There were about 4,511,000 chick- | face of rapidly i tin, values and the unlnomv;?cmn‘ of for- oA &l e today. A banker, this week from Europe, said that he was in Ber- lin when German institutions closed % | the Test'of the vy Canada’s | the msrket. | The stcck exchange has kept a close | scrutiny of short selling operations for | Juverll months and on September 21, | following the suspension of gold pa: ments by Great Britain, virtually ban ned short selling for two days. At the | present time members are required to Teport in detail alt short sales. Wall Street has been interested in re- ports that short selling may be the sub- Ject of a congressional inquiry. No com- | ment has been forthcoming frcm Rich- | ard Whitney, president of the exchange, | on the letter sent him by United States | Senator Daniel O. Hastings of Delaware urging a minimum price on securities | be fixed, or a ban on short selling for | 'DEPRESSION IS CALLED BLESSING IN DISGUISE By the Associated Press. | NEW _YORK, October 3—Canon ! Ernest Dimnet, French author, said | | today on his arrival for a two months’ | American tour, that the world depres- sion is a blessing in disguise and of all the nations affected the United States | has the most optimistic outlook. | ..“The world-wide depression,” Canon | Dimnet said, “will in reality prove most | useful. It will sober the world, & con- dition which the world stands greatly | in need of. “As far as the United Statés is con- cerned, I am very optimistic. You have nothing to worry about. Your banks lare full of gold.. When the people of the United States realize that they have far more configence in & nation fundamentally sounder than any other, gold will come out of the banks, goods will be bought and prosperous times return. | AR REDUCING OF COSTS WILL SPEED INDUSTRY Special Dispatch to The Sta: BOSTON, October 3.—The mll]or ad- ustments which. have taken place in wering wage scales in the steel in- dustry are indicative of the cost reduc- tion v;l'neh taking place in most every ess, says the United B ness Serviog. These will serve to protect some of our most imj nt "mmmncmmmmne dis- tion of the pound sterling has been to some extent obviated by a Dominion customs regulation which estimates the pound at par when calculating duty on imports from the United Kingdom Therefore, on the whole, Ca ian | industries stand to benefit from the | country’s depreciated dollar to the same | extent as the cotton and woolen and silk mills have prospered during the last year owing to the duties imposed upon the importation of textiles in September, 1930. The iron and steel industry will probably be the first to feel the effects of the dollar’s discount, as iron prod- ucts have long constituted the heaviest item of imports into the Dominion. By restricting Canadian buying to the home market and by increasing the foreign demand for Canadian goods it is expected that the discount on the dollar may result in a consicerable im- | provement in the freight traffic of this country’s railway lines. At present car loadings continue to show declines. (Copyright, 1931.) P o e EARNINGS REPORTED. NEW YORK, October 3 (#).—Fox Film Corporation and its wholly-owned subsidiary, controlled and amliated companies today reported for the year ended June 27 net profit, after all charges except Federal income taxes, amounted to $120,152, as compared with $6,785,897 for the half year ended June 28, 1930. ‘The report explained that the decline in net was largely due to a reduction in | theater receipts and film rentals, which amounted to $45,749,867, as compared with $50,937,848 in the first half of 1930. General Theaters Equipment, Inc., which controls Fox Film Corporation and Fox Theaters Corporation, reported for the first half this year net income applicable to preferred and common stocks of General Theaters Equipment after all charges was $888,353. The re- port said no comparison with the first half last year was made because of aqeuisitions in 1930, g, DIVIDENDS VOTED. NEW YORK, October 3 (Special).— Directors of the Kroger Grocery & Baking Co. have declared the regular quarterly dividend of 25 cents a shart on the common stock of the company payable December 1, to stockhalders of record November 10. The board also declared the regular 1; per cent dividend on the 6 per cent first preferred stock, payable Jan- uary 2, '1932, to stockholders of record December 13, 1931, and a regular 1% per cent dividend on the 7 cent second Economy, . n private 35 well a3 public itures, will solvency, is the primary requisite for re- A\ ) preferred stock payable February 1, ;:"f"!‘; stockholders of record January FOREIGN BUSINESS HIT BY SUSPENSION OF GOLD STANDARD Other Nations Expected to. Join in Abandonment of Currency Basis. STABILIZATION OF POUND HELD VITAL TO TRADE Several Important European Stock Exchanges Remain Closed, Await- Better Financial Conditions. Bpecial Dispatch to The Star. NEW YORK, October 3—Cable and radio dispatches to the Business Week give the fcllowing survey of business abrozd for the week ending October 3: Europe—Less opportunistic optimism, instead of serious perturbation, marks the second week following England’s abandonment of the gold standard. Out of endless consequences—varying with each country according to its economic structure and the intimacy of its rela- tions to world developments—the fol- lcwing current trends in the chaotic Eu- ropean ricture may be segregated: (1) As feared, though expected soon- er, England's action has forced other countries to abandon gold. Sweden, | Denmark and Norway have announced | temporzry suspension cf the converti- bility of their currencies, nominally only until the end of November. Heavy falls in Scandinavian exchanges followed. Egypt has suspended gold exports. With each new departure, pressure upon the | remaining gold standard countries has | Increzsed. It is considered cnly a mat- | ter of time before several small Eastern | European nations succumb, and it is gravely doubted whether Germany and j Italy, end even Holland. will be able to resist. The eventual prospect is the United States, France and South Africa }as the solitary survivors. It should, | however, be pointed cut that the Scan- 1dinavian countries are among those eco- nomically most closely associated with Great Britain, while Egypt's currency is based on sterling. These abandon- ments, therefore, have been due to spe- cial, in addition to general, reasons. Soviet May Suspend Payments. | ‘The rumor has originated in Scandi- |navia that Russia, due to low world | prices for its principal exports, is about | to declare a one-year suspension of pa: | ments. Russian official denisls have | failed to allay the belief that there is & likelihood of this eventuality. | (2) Erratic fluctuations of sterling and the disruptive effect on trade has | resulted in a widespread demand that the pound be stabilized within given ! margins at the soonest possible date. | The British cabinet has not reached any decision on what monetary policy to pursue, but the Bank of England | board is understood to be favoring a re- turn to the gold standard, or to a rel- atively high gold parity. Action ef sterling during the first half of this week tends to indicate market inter- vention by British authorities, though this is denied. (3) Several important stock ex- changes continue closed (Berlin, Stock- holm and Budapest) and others are ex- pected to close. A movement from bonds to stocks or to cash is discern- ible. Dealing in futures (the European | counterpart of short-selling) has been | suspended nearly everywhere. both in | securities and currencies, the latter | particularly hampering trade. | ous small bankruptcies have occu: and uneasiness over the position of | large institutions has increased. | _(4) A series of central banks have | raised bank rates (Italy, Holland, Scan- i dinavia, Greece and Bulgaria). (5) . Several upward revisions of | tariffs have been enacted. Holland has raised the general 8 per cent tariff to 10 per cent; Italy, with certain excep- tions, has introduced a 15 per cent cus- toms surtax. Increases are motivated | partially to offset dumping by countries abandoning the gold standard, but pri- marily to increase Tevenues against rising government deficits, which are: universal in Europe. The increase in Egyptian tariffs is intended to offset currency depreciation leaving gold tariffs unchanged. Spain has adopted a retaliatory tariff clause. (6) European exporters, hitherto in- voicing in sterling, are seeking to re- draw outstanding bills and insist on drawing the new bills in dollars or francs, or refusing deliveries. The function of sterling as an international medium of exchange, commuun¥ one of England's principal sources of for- eign revenue, momentarily has virtually ceased. New York and Paris may ex- pect a flood of commercial paper seek- ing acceptance and discount facilities. : Business Quiet. The business picture is dull. Com- modity markets have fluctuated with exchange oscillations but gold values still tend downward, except for lead, rubber and wood. Continental indus trial activity is further restricted. Brit- ish industrial reports still refect the first stimulus cf depreciation but the instability of sterling is beginning to exercise the opposite effect as buyers realize today's bargains, at falling ex- change, may become tomorraw's losses. Stock exchanges are somewhat steadier, except in Paris. London—The exchange position is timulating British business. Canada is ordering Welsh and Scotch anthracite’ instead of Pennsylvania coal. The tin plate industry has revived. Still other industries are preparing for a boom. The stock market insists on all deal- ings in cash, thus checking speculation though showing down turnover. The public, nevertheless, is actively buying industrials. The probability of sn early election has tended to check some" trades, but it seems probable now that the government will not appeal to the country much before the end of the ear. % Paris—French business sentiment views the future gloomily. Stocks have, suffered in a new slide, and, for the" first time, French government securi- ties hitherto pil'ars of strength, have begun to show weakness. French banks already are suffering from declines in security values and mortgage equities have unquestionably felt further losses incurréd through sterling depreciation. Berlin—Beyond the hopeful new Franco-German sgreement, the week has been marked by expanding reper- cussion to the pound crisis. Notable are the increasing difficulties which have developed around the financing of Ger- man_import and expert trade, formerly handled largely via London. A second uncertainty results from the continued suspension of the stock exchange and the fresh anxiety of exporting indus- tries following the gold debacle in the Scandinavian countries and the pre- -carious position of other world cur- rencies. i |