Evening Star Newspaper, October 18, 1931, Page 71

4 News of Markets Pages 1 to 4 FINANCIAL AND CLASSIFIED he Sunday Star Classified Pages S5 to 1 Ads 2 Part 6—12 Pages WA D. . BANKERS RUSH PLAN FOR RASIN P00L FUNDS HERE Clearing House and 0istrict Association Issue Call for Joint Meeting Friday. PROMPT ;CTION URGED BY REGIONAL CHAIRMAN Seven Local Institwions Have Already Voted Full Quota Subscriptions. BY EDWARD C. STONE. In the calling of a special joint meet- | ing of the Washington Clearing House Assoclation and the District Bankers' Assoctation, set for next Priday, further steps were taken yesterday toward or- ganization of the Washington unit of the National Credit Corporation, which is raising a_fund of $500,000,000, or mote, to help banks throughout the United States utilize their resources and credit toward the betier stabilization of financial and econojic conditions. Splendid progress has be:n made in the past few days toward forming the Jocal banking group. The directors of seven Washington banks have already voted to subscribe their full quota to the fund. The banks which up to yes- terday had taken this action included the District National. Riges, Liberty, Franklin, National Capital, Depart- mental and Washington Mechanics Savings Bank. This is considered & brilliant showing, at least one local bank having voted support to the proposal even b°fore any move had been made to establish a Washington unit. The call for Friday's joint meeting was sent out at the request of Robert V. Fleming, president of the Riggs Naticnal Bank, who was appointed re- gional chairman for this city by John M. Millers, jr., of Richmond, who is the Fifth Federal Reserve District's director in the Natiénal Credit Corporation. He also appointed organizers in the five States in this district. In his letter Mr. Fleming referred to the action taken by President Hoover in calling upon the banks everywhere to mobilize their resources back of & national movement to improve confi- dence, mentioned the leading New York bankers on the organization committee, stated that subscriptions by the banks of an amount equal to 2 per cent of their deposits were requested and re- ferred to Controller Pole's hearty sup- poit of the whrle icea. Chairman Urges Prompt Action. Mr. Fleming referred briefly to the plan of organization in the fifth dis- trict, and stressed his belief that the local banks should do their full share in the constructive movement to assist in ending the depression which now exists. He stated that only subscribing members of each group will be entitled o elect the officers of their associations, loan committees, etc. The regional chairman then urged every bank in the city at once to subscribe their propor- tionate amounts to the gold notes of the National Credit Corporation. In his letter asking that the joint meeting be called, Chairman Fleming urged that Washington banks call spe- ciai meeting of their directors, if no regular meetings are scheduled between now and next Friday, so that the mem- bers of the associations may be pre- pared to announce their subscriptions at that time The call for the joint meeting was signed by H. H. McKee as chairman of the Washington Clearing House Asso- clation, and Edward J. McQuade, presi- dent of the District Bankers' Associa- tion. Both these bankers expressed the belief yesterday that every bank in Washington will subscribe to the fund, this 100 per cent prediction being con- curred in by Mr. Fleming. It is considered here that the credit plan is one of the most important movements in banking circles that has been instituted since the fall of the stock market in 1929. The fund will make it possible to turn sound bank assets into cash at any time, and will also make it unnecessary for banks needing cash to sell bonds in a de- pressed market and take a loss on them. Treasury Will Accept Notes. Secretary Mellon announced yesterday that the gold notes of the National Credit Corporation will be accepted by the Treasury as collateral to secure any deposits of public moneys in deposi- taries designated by the Secretary of the Treasury. The notes will be accepted at the same collateral value now accorded by the Treasury to commercial paper and bankers’ acceptances, which, under ex- isting regulations governing deposits in special depositaries, are accepted at 90 per cent of face value. The Treasury regulations with respect to deposits of public moneys have becn amended ac- cordingly. All the banks in Washington are in- cluded in the request for support for the national credit fund, national banks, savings banks and trust companies. New York City banks have already pledged their quota of $150.000,000 toward the fund and some other cities have al- Local Director HELPS ORG ZE NATIONAL | i | l JOHN M. MILLER, JR., President _of the First & Merchants'| | National Bank of Richmond, who rep- 1 { resents the fifth Federal Reserve dis- trict in the Nation-wide campaign to strengthen benking and economic con- ditions. The Washington and State units in this district are being formed {under his guidance. Born and reared ,in Lynchburg, he has come to be one {of the leading bankers in the OId| | Dominion State. BANK RATERAISE DEPRESSES BONDS |Government Issues Bear Brunt of Selling During the Last Week. | Special Dispatch to The Star. | NEW YORK, October 17.—A second successive increase in the New York Federal Reserve Bank's rediscount rate this week started a series of bond mar- ket session unparalleled in modern in- vestment history. United States Government bonds, long the acme of security to the Amer- fcan investor, had the swiftest decline in the memory of traders. Declines of 2 to 7 points, which are usually asso- cited with speculative stocks or junior boncs, took place in the long-term Lib- | { erties’ and Treasuries, and on one day | Friday, there were losses ranging from | i1 to over 4 points. Treasury bills and | certificates, which as recently as six | weeks ago were selling at a price vield- | ing less than one-half of 1 per cent per ! annum, sold at prices yielding 3.50 per cent. Even though the advance of 1 per cent in the rediscount rate, only a week after it had been increased the same amount, represented a drastic Tevision of money market conditions, one must look farther than that to ex- plain the sharp slump in Government bonds. ! Bank Liquidation. For months banks have been closinz in many sections of the country and the aggregate amount of liquidation tc be effected in settling their affairs is enormous. One bond trader estimates | a favorable balance of trade of $10.- | exports and imports, the September ex- SHOWS SHARP GAIN DURING SEPTEMBER Heavy Increase in Cotton Sales Abroad Accounts for Most of Advance. FAVORABLE BALANCE OF $10,000,000 IN MONTH Exports for First Nine Months Ex- ceeded Imports by $223,228,000, Commerce Report Shows. Foreign trade of the United States in September, due to seasonal improve- ments. showed an increase of $21,500,000 over the August total and resuited in 000,000, according to figures made public yesterday by the Department of Com- merce. The value of the September imports and exports wes placed at $352,000,000. Wheat and cotton largely accounted | for the difference of $10,000,000 between | ports totaling $181,000.000. For August | the figures were $164,821.973 for exports | and $166,669.689 for imports, while for | September, 1930, they were $312,207,000 | and $226,352,000. Cotton Exports Gain. | The unfavorable balance of $2.000,000 | in August, according to the Commerce | Department statistics, was the first since April, 1926. Heavy increases in cotton exports oc- curred during the last month, and ac- counted for all but $2,600,000 of the total increase in shipments to foreign countries. Gold shipments last month showed the largest increase of the year, al- | though this jump was not as great as that which occurred in July last year. | There was a $20,532,000 excess of gold | imports over gold exports, the figures showed, and exports in September, totaling $28.708,000, were more than $27,000,000 greater than the shipments in any other month this year. Last month Japan and Germany combined took over half the exports of cotton. These totaled 558,000 bales, | valued at $23,383,000, compared with 211,000 bales, valued at $9,820,000, in August. Japan_imported 162,000 bales and Germany 131,000, with the remain- der scattered throughout the world. Officials estimated that with Chinese | and other Oriental purchases added to | those for Japan the Orient would be found to have taken at least one-third | of all the American cotton shipped | during September. 1 Orient Increases Purcha: ‘The Orient added heavily to its offi- cially recorded purchases in this coun- try, “buying 4,000,000 of the 9,000,000 | bushels of wheat exported during the| month. The department was without | figures showing wheat values, but it was estimated roughly at around 50 cents a bushel, making the total ship- ments worth approximately $4,500,000. Shipments of wheat and flour to the Far East are expected to continue up- ward for the next month or two. De- partment officials said they had been advised by the Farm Board that wheat shipments during September did not include any sold by the Farm Board to_the Chinese government. { | that approximately $1,500.000,000 in | United States Government bonds, Fed- | eral Land Bank bonds and other Fed-| | eral securities had to be liquidated for| the account of closed banks, not to| mention other securities. | So long as money rates were low and | { the market for Government bonds was | steady, this selling proceeded at & date pace, those handling it not wish-| ing to cause undue unsettlement of ‘he market. But when the era of cheap money passed suddenly, as the redis- count rate rose, time money quotations firmed and call money deserted the 1'; per cent level to which it had clung since early in the year, the bank liguidators became anxious lest they might have to write off substantial losses on Government bonds in addi- tion to the heavy depreciation in the general bond portfolios. Liberty fourth 41:s started the move- ment by dropine suddenly from the 1.95 per cent yield basis, to which the | probability of an early refunding opera- | tion had driven them, down close to par. The first 4l4s and Treasury | issues were alded in their slide by the selling of large banks, which, con- vinced that the cheap money market was at an end and that Secretary Mellon would not be able after all to refund advantageously any part of the Liberty loans in 1932, decided that the ‘Treasury issues would all eventually drop to approximately a 4!; per cent | yield basis. And it was at this level that the Government list ended the | week. | | Other Groups. In the meantime. however, a truer | gauge of how much the advance in rates | had affected the bond market was to be found in prime muncipal, rail equip- ments and high-grade railroad and public utility bonds. While these de- clined with Governments, their losses were narrower. It was significant, too, that the stock market and the specula- tive bond list rallied strongly. 1t developed that a switching move- Teady subscribed their full amounts. |ment had begun. Some of the most astute traders in Wall Street were selling Banks Urged to Buy Bonds. their Government bonds to buy second- Suggestions were made at the Amer- | grade railroad and industrial bonds and jcan Bankers' Convention at Atlantic | common stocks where dividends were City that some of the banks in different | still being paid. Hence, Government parts of the country are keeping in too | issues were suffering from three types Pauid @ position. For months liquidity | of selling—forced liquidation by banks, has been one of the chief watch words. | selling by banks which saw the end of This wheat, 15,000,000 bushels, is ex- pected to begin to show in the Oc-| tober figures available about Novem-| ber 15. i Exports for the first nine months| this year were $1,842,509,000, com-) pared with $2,952,450,000 last year, and | imports of $1,619,281,000, against $2.- 401,312,000, This gave a favorable balance of $223,228,000 for the first nine months of 1931 and_$551,138,000 for the same period in 1930 FURTHER BANK RATE INCREASES FORECAST Present Charge of 3 1-2 Per Cent Obtains in Three Federal Reserve Districts. By the Associated Press. Further increases in the rediscount rates at the Central Reserve Banks in Boston and Chicago occasioned no sur- | prise at the Treasury, where it is ex- pected that other upward adjustments will be made throughout the system. The New York Reserve Bank is usually looked to for leadership in all movements. The two increases an- nounced by it within the last 10 days, bringing the present rate to 31> per cent, was held to presage increases | elsewhere. i The present rate at the New York bank is the highest in the system. and is shared in by three other institutions, | these being Minneapolis, which failed | to reduce its rate when other charges | were moving downward, and by Boston and Chicago, which raised their rates yesterday. The banks at St. Louis and San Francisco maintain rates of 21, per cent, while all others adhere to the 3 per cent level. ‘The Treasury believes the movement toward higher rates will help materially toward restoring normal conditions in the money market. In this connection, it was pointed out, subnormally low rates were designed to afford easy credit for business expansion, and to discour- age the flow of gold to this country, a It is now felt that in some cases banks | cheap money and a lower price range are keeping more cash on hand than | for Governments and selling by specu- IS needed or will be needed. It was |lators either for the purpose of raising hinted at Atlantic City that such insti- | cash to invest in speculative securities tutions should take some of this money [ or merely on short sales. and buy bonds. Adoption of such action (Copyrisht, 1931) in all parts of the country. bankers say, would give the bond market a substantial boost, raise first-grade bonds to much igher levels and be an indirect benefit| NEW YORK, October 17 ()—Peo- the second-grade issues. Of course it is | ples’ Gas Light & Coke Co. of Chicago understood that the banks would con- | reported for the September quarter net tinue to be very conservative on the|profit of $1,159,986, equal to $1.73 a question of liquidty, but at the same |share, compared with $1,356,831, or $2.22 time a large amount of idle funds could | a share, on a smaller capitalization in be set to work, helping both the bond |the third quarter last year. market and the banks themselves. Zonite Produc:: Cor'?anz‘i‘otn 1;e;;gx;§d September quarter net profit of - Local Power Bonds in Demand. | SePVCRET 3197 Ce s " share, against Potomac Electric Consolidated 5 led [ §319 926, or 31 cents a share, in the like moderate trading on the Washingtoa | quarter of 1930. Stock Exchange yesterday. The market | “Motor Products Corporation reported opened with $1,000 selling at 102, fol- | for the quarter ended September 30 net Jowed by $2,000 and $1,000 sales at the | Joss of $51,642, compared with net profit same figure. of $15,054 in the corresponding period ‘Washington Gas 5s sold to the extent | Jast year. of $1,000 at 101% and Washington Gas |===>=— les A, moved at 101'2. The re-| | B ining trading was in stocks, the first [important change during the ek EARNifidS B).‘;JI;OBi'ED. movement held to have unhealthy po- | tentialities. The inward flow of gold | has been successfully checked over the last two months and the trend reversed. | Lacking any substantial increase in the . demand for funds, Treasury sources | said that a continuance of low rates worked an unnecessary- penalty upon the earning capacity of banks. A substantial increase in bank earn- ings during the last quarter of the year, they held, will possibly accrue to those institutions in whose district the redis- count rate has been raised. e PREFERRED STOCKS. NEW YORK, October 17 (Special).— Markets in preferred stocks are still af- fected by foreign liquidation, as well as by selling out of loans of bank custom- ers and from bank portfolios. While some of the public utility senior issues that broke most sharply last month have rallied 5 to 10 points, others have been reactionary. Scattered through the general list are industrial preferred year. A prominent Stock Exchange 5 Wi Loth: - | proved to b2 in National Press Building T ward & LOthrop com- | B G125, the bid now being 42 and the Potomac Electric Power 6!, per cent |asked price 47. The asked price on preferred came cut!_I Ietct lrllfl-‘,‘ n‘ndrxagh- %ugk;’ver Hot:l 6s was advanced from Al & c prefer: ig- 5 ,fi'?i%"" mn: :n“fll sals at 95. When the Washington Clearing .8?“” figures “uglisted stocks were called off, the most for Saturday: §4,124,717 1 house has just issued a list of about 20 preferred stocks of the highest char- acter on which the yields ranged about | pos 5 per cent to 81, per cent. More than half of them are non-callable. Twelve in 1930 showed earnings from 6 times 10 over 15 times dividend requirements, i Tate case and that voluntary wage re- stocks now at the lowest prices of the| p: 1. EXPORT TRADE |STOCK PRICE GAIN | LA TO INPROVED BUSIESS OUTLOOK Equities-Advance During the Week, Despite Drop in Bond Values. BROKER LOANS REVEAL LIQUIDATED CONDITION Downward Revision in Dividend Rates Shows Signs of Near- BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, October 17.—The stock market this weei has been able to di- | vorce itself somewhat from the depress- ing influence of the bond list. though | this has mainly been in the group of railroad shares. Each day has brought its rumors that something was to be done to lift the weight from the rail- road bond market and to provide an agency to which the carrier, with an approiching maturity and little cah, might go and obtain the funds neces- sary to carry over an emergency period. There have also been Four-to-hour re- ports that the Interstate Commerce Commission was about to hand down its decisicn in the 15 per cent freight ductions had been promised by the railroad brotherhoods in the event that the rate decision proved unfavorable, ‘The public has finally become rather fatigued and impatient over all that might or may_ be projected to save the situation. In the absence of con- crete evidence, it has either withheld its money from the markets. though firmly believing in the bargain char- acter of present prices, or else has con- tinued turning its securities into cash. Funds Lying Idle. It is recognized that at least half of the troubles of the banks this vear have been due to depreciation in their securities. This is the common ex- planation that follows bank suspensions. It would seem reasonable, therefore, to protect the banks by giving protection to the bond market. Inasmuch as there is more ready cash in the banks today than ever in their history, why should not there be the direct employ- ment of idle funds in the stabilization | of all good quality corporation mort- gages, to say nothing of the obliga- | tions of the United States? The banks readily responded to an appeal for sub- scriptions to enormous German and British credits several months ago and are not to be blamed for this. It was a part of thefr job to help situations in which this country is intimately a :ormted.lben 18 now n)aokequm obliga- fon on art to lo fTairs | g R A B e fense of domestic markets. One is| tempted at times to subscribe to the cynical philosophy of those who main- | tain that out of the misfortunes of the many, the comparative few are now able to_profit. The Federal Reserve could not be ex- pected to go on taking the loss of its gold at the present proportions without making it less profitable to those who | were drawing. Alreadv two-thirds | of the amount which has been claimed | could be exported without changing our | credit status has left the United States. | The dollar is at a discount abroad and | apparently in low fepute in such excep- | tional countries as Poland. Even the | Frenchman, who has been hoarding | American currency, now turns it in for | francs. The reaction in Europe to our | banking relief scheme has been unfa- | vorable chiefly because of the experi- | ence with inflation, which the foreigner | feels must come out of the new credit plan. The most striking phenomenon in international finance this month has been the manner in which those Eur peans who have debased themselves be- fore the dollar for the past vear now | rise up to abuse and discount it. | Problem for Treasury. The advance in the rediscount rate to 32 per cent has imposed a serious | problem in Treasury financing on Sec- | retary Mellon and his advisers. Gone are the days when an issue of 3'5 per cent notes could quickly sell at a pre- mium of 1% points and a 3 per cent | offering of record size for peace times be covered, even though by a small | margin, and 90-day bills be put out on less than a % of 1 per cent basis to meet an insatiable demand from those who are now selling the 315 and 3 per cents. If there is co-operation between the Federal Reserve Board and the Treasury Department it has not been convincingly proved in the promulga- tion of the discount policy that has created the greatest demoralization in Government bonds witnessed since the public liquidation of Liberties in 1920. The liquidated condition of the stock market, further indicated this week in the drop in brokers’ loans below $1.- | 000,000,000, has permitted it to hold steady in the face of unfavorable cor. poration reports for the December quar- ter and reductions in the dividends of such_companies as Pullman and West- ern Union. There has been a slowing up in the number of important divi- dends lowered or omitted. This may be temporary or suggest that the average corporation has about adjusted itself to its decline in gross earnings and, on a more efficient basis of operations, feels it can maintain the current divi- sion of profit among shareholders, Col. Leonard P. Ayres points out this week that corporation earnings in the past two years have declined more rapidly than dividends have been re- duced. There is & strong disposition among corporation managers to main- tain dividend payments at moderate rates, rather than pass them, so long as this does not weaken the position of senior securities. The tremendous increase in the number of stock own- ers in the past few vears imposes quite a different responsibility on corpora- tions than those facing them in the panic of 1921. Clearer Skies Abroad. Developments abroad this week have been more favorable. Geneva to check the war spirit in Japan have been successful, thereby re- lieving an international situation al- ready weighed down with the crisis in Central Europe and in Great Britain. The Bruening government in EBerlin has once more obtained a vote of con- fidence and is in a position to deal with its chief internal troubles and to show a geod face in its relations with | condition. GOLD AT THE END OF THIS RAINBOW HINGTON, D. C, SUNDAY MORNING, OCTOBER 18, 1931 (Copyright, 1931 1 | SUSPENSION OF SINKING FUND PAYMENTS PROPOSED IN BRAZIL BY DR. MAX WINKLER. Special Dispatch to The Star. NEW YORK, October 17.—Holders of Brazilian bonds, as well as those in- terested in American-Brazilian com- mercial relations, should derive mate- rial consolation from a statement made by Dr. Assis Chateaubriand, editor in chief of O Jornal and principal owner of Diarios Associados, a chain of news- papers comprising the principal and most influential dailies in Brazil. In view of the enormous amount of American capital placed in the repub- lic and the normally large commerce carried on between the two nations, the presentation of Dr. Chateaubriand's plan would seem warranted. Has Balanced Budget. “There is in Brazil a current of pub- lic opinion inclined to favor suspension of interest and amortization service on the foreign debt. The example of Chile finds on this side of the Andes some who are disposed to follow it, al- | though this would be a measure of despair, and Brazil is not in & hopeless Quite to the contrary; al- though we have had a bit of hard luck lately, we are emerging from our tight places with courage and honor. Eng- land budgets for a deficit of £37,000,000 and the United States for a very much larger deficit, but Brazil has a balanced budget and a government which risks unpopularity in order to go through with a program of stern economy. We have grave difficulties to overcome. but they are not to be compared with those confronting some other nations more severely punished than is Brazil by the consequences of the world crisis. “Six months ago I pointed out some of the obstacles which hinder us today from obtaining a third funding loan | just like people who buy policies here. | * “Moreover, the greater part of our foreign loan contracts offer specific guarantees to the investor. In_ De- cember of last year, I showed that in order to secure several operations of credit made by use in London, Paris and New York, we had to pledge State revenues. For this loan, we gave the gold import duties; for that one, the railroads; for another, the income and | consumption taxes and so on. | “If we suspend the loan service, what judge would deny to our creditors de- Jivery of those public revenues, to which they have a vested right by virtue of the Joan contracts? “In case we have to make some ar- rangement with our creditors. we should do as propesed by Eugenio Gudin in O Jornal. that is, suspend sinking funds for cne or two years, having the utmost care to apply all resources made available thereby to the incineration of paper money.” U. S. Investments in Brazil. America’s total stake in Brazil is placed at $623,922,000. of which $37 424,000 represents investments in gov- ernment, state and municipal loans, ex- clusive of the outstanding balance of the 7i; per cent coffee loan of 1922, which is on deposit with the bankers. This figure includes also Brazilian cor- poration issues publicly piaced in the United States. Direct investments ac- count for $222498.000: while the bal- ance represents American capital esti- mated to have been placed in Brazilian sterling, franc and milreis issues. | (Copyright, 1931. by the North Americ [ Newspapcr Alliance, Inc.) 'OUTLOOK IN STEEL | portant factor in the changed attitude, | {but it is cumulative signs of business ment with the house of Rothschild set- | tled everything. One banker alone | could decide on our case. ’ g “Today Brazil's obligations are scat- Prices Remain Unchanged for tered over the United States, Canada, | ‘ England, Switzerland, France, Belgium, | *Week—l’roduchon Is About | 29 Per Cent of Capacity. E- e Et INDUSTRY IMPROVES | Holland, and _their holders number | hundreds of thousands. To assemble | all these people to enable them to| discuss with us a funding arrangement is not a job which can be done With Bs the Associated Press. the relative ease which the men of NEW YORK, October 17.—Although the first republic encountered on the no material change occurred in the occasions of the two moratoria which | steel situation during the past week, & | we have negotiated. s | more "cheerful tone was apparent, with When we speak of our creditors We |the trade hopeful that greater confi- naturally think of Dillon Read, Schroe- | dence resulting from the formation of der, Rothschild, Societe Generale, | the National Credit Corporation might Banque de Paris' et des Pays Bas. as | check the seasonal decline in production if these concerns were owners of Br: zilian bonds. Public Is Victim. “Bankers who sell the bond issue of a state are only the intermediaries between the government which makes the loan and the public which buys the bonds. Schroeder are merely sponsors for the state, which chooses them for offering its bonds to investors. When the trea: ury of a debtor state defaults, its vic- tims are by no means those bankers but the great public which acquired the bonds they sold. trusting in the good faith of the state whose agents they were. “For this reason let us get out of our heads the idea that a moratorium for us will not affect the small in- vestor. It does so, because people who buy bonds in Europe or elsewhere are | just done promptly with respect to the interest and sinking fund on the 7 per The efforts atjcent Dawes loan. There were some slight evidences of business improvement this week, such as were to be found in car loadings, in the iron and steel trade and in the production of electric power. The end of September saw the index of business at the lowest level since the war, one- third below that of th> same period | in 1929, when the beginning of liquida- tion in securities first influenced a con- | France. Many persons have been sur- rised to see the record of German foreign trade in September. which in- cludes the highest credit balance since the war, raising the total excess of ex- rts over imports for the nine months to $454,000,000. At this rate there is no reason why Germany cannot con- tinue to find the exchange for paying Rer dollar obligations, W she has traction in trade Before business can exhibit sustained improvement there must be a clearing up of the bank situation ang, after this. a stabilization of bond and stock markets. These de- velopments, while slow to start, are on the way and should bring about & con- siderable improvement in timent in the closing months of year. (Copyright, 1931.) at the year-end moderately increased demand from the automobile trade, rail- roads and miscellaneous lines developed, TRADERS BECOMING MORE OPTINISTIC Upward Movement in Market| Considered Probable as Trade Improves. | BY GEORGE T. HUGHES. Special Dispatch to The Star NEW YORK, October 17.—The feecl- ing toward the stock market of the active traders at the week end is defi- | nitely more favorable than it has been | in a month or more. It is not simply | the expectation of some concrete move from Washington to re-establish rail- | road credit, althongh that is an im- | improvement which have persuaded the professional speculators, in whose | hands the market continues, that an | upward movement is logical. | It is agreed that nothing would bring more recruits to the construc- tive side than an advance in the rafl- road shares, but it is insisted that such advance might well come regardless of the efforts of the administration, | helpful as they might be, if traffic| shows signs of an increase. The larger car loadings reported this week. when seasonally a falling off was due, are deemed a straw in the wind. Similar improvement next week would be con- vincing, it was urged. Steel Reviews Watched. Fully as important would be an en- couraging report from the steel trade | and for that reason the midweek reviews are being closely scanned. Meanwhile, from both wholesale and retail merchants word is filtering into Wall Street of business revival. Con- firmation of this view is to be had in the | week end trade reviews, one of them putting it “where weather conditions | have been favorable, October trade is running ahead of the September record and is also in excess of last year. Against this background of domestic | improvement. foreign affairs have lost their power to upset the stock market. It is, of course, probable that any major crisis would undo the progress so far effected, but_there is less worry about troubles, political or financial, else- | where in the world than there has been |at any time since the Bank of Eng- land suspended gold payments. This is not to say that the Toad to recovery | | cover part of its stake | timism “subdued only | is regarded as an easy one or that there Houses like Rothschild and | | but steel ingot production remained un- changed at about 29 per cent of ca- pacity. While structural awards were smaller, some finishing plants were Te- ported to be increasing operations. Prices were unchanged. Pig iron re- mains quiet and steady. Domestic buyers of copper became more cautious when the statistics for September revealed a further sharp in- crease in refined stocks, owing to fairly steady production and decreased ship- ments. The disposition to await the conference of produccrs next week, when it is said production policies will be dis- cussed, also checked buying. Custom smelters continue to supply metal at 7 cents for electrolytic in the Connecticut Valley, but inquiry is largely confined to 1932 positions. A fair volume of foreign orders is reported daily. ‘The tin market remained dull, with buyers holding off, reactions occurring at the close of the week in sympathy with declines in London. Lead remains quiet and steady, with demand limited chiefly to carload lots for immediate shipment. Stocks of refined lead at the end of September show a slight reduc- tion from a readjusted end-August figure, but are still said to be larger than immediate consuming reeds. Zinc eased further under pressure by smelters, who are seeking business. Suti- mony held about steady with inquiries limited to a few carload lots. No firm offerings are reported from China. DIRECTORS RE-ELECTED. At the annual meeting of stockhold- ers of the Virginia-Carolina Chemical Corporatfon, at Richmond, directors were re-elected. | are no serious obstacles to any sustained tock market advance. It is merely to | but on record a feeling of optimism that has long been lacking. The stock market took the increase | in the rediscount raté of the New York Federal Reserve Bank calmly. It was undisturbed by the weakness in United | States Government bonds. It viewed with unconcern upward readjustment in interest rates, ‘The _ long-continued i policy of the Federal Reserve authori- ties in keeping money excessively easy having failed in its object of strength- |ening the bond market and helping | business, it is felt that there can be nothing adverse in the change. The assurances of the banking authorities that the Eurovean drains on our gold supply will not retard revival here are accepted without question. Even the prospect of fresh dividend cuts and omissions is not quite as ter- rifying as it was. While in the nature of the case there can be no official in- formation, the Street is veering to the view that the United States Steel Cor- noration will continue the dividend on the common stock at the $1 quarterly rate established at the last meeting. As_for other imperiled dividends. it is | held that the market has already dis- | zounted the worst and trader: are listen- POLITICAL FACTORS CONTINUE TO SWAY FOREIGN BUSINESS Increased Hoarding of Money Follows Uncertainty in Gov- ernment Circles. GERMAN LOAN RENEWAL IS CONSTRUCTIVE MOVE French Continue in Belief That Dollar Exchange Is in Dan- ger of Collapse. Special Dispatch to The Star. NEW YORK, October 17.—Cable an radio dispatches to the Business Week give the following survey of business abroad for the week ending October 17: Europe.—The business situation 1s characterized (1) by the political crises which are coming to a head in England and Germany: (2) by the continued n of international credits and the expans:: of domestic hoarding, (3) rising ‘prices on_London on specific news reports, of financial end po- litical u Throughout Europe increasing cur- rency hoarding is reflected in the ex- pansion of currency circulations and in higher rediscount rates. Gold with- drawals from the United States con- tinue, attended by some redistribution via Paris to other countries. Dr. Bur- gess' explanation that the United States is in a strong monetary position, and that the Hoover credit plan is non- inflationist _in character—broadcast throughout Eurcpe—has tended to allay revalent misconceptions causing un- easiness, except in France. Renewal of German Loan. ‘The most notable financial develop- ment is the three-month renewal by central banks of last August's $100,000.- 000 joint credit to Germany, and like- wise the $3,000.000 credit to Yugo- slavia; also the Bank for International Settiements and the Bank of England's credit to Austria (513,000,000 and $14.- 000,000, respectively), still outstanding, are now reported merged in the single joint credit of the Bank for Interna- tional Setlements, with leading central banks participating, thus permitting the hard-pressed Bank of England to re- The Austrian finance minister is in Paris negotiating for the urgently needed Austrian loan, which probably will involve the merging of the four largest Vienna banks under French spon: ip. The Bank for In- ternational Settlements is calling & meeting of the coun controlling for- eign exchange operations in order to unify practices and relieve various im- pediments to_ trade The fate of the Bruening government hangs in the balance as the Reichstag reconvenes. Whereas Bruening's posi- tion until row was looked upon as al- most hopeless, it is now felt he has a fighting chance to win, following his powerful address and the announce- ment of a definite program at the opening of the Reichstag. London.—Election possibilities are holding the attention of business, but ot to the exclusion of numerous hope- ful signs that there has been a distinct trade revival in recent weeks. Cotton and woolen mills, iron and steel furnaces, and coal mines are working at full blast in several parts of the country anticipating the revival ex- pected t> follow suspension of the gold standard and reflected in last week's sharp drop of 33,000 in the unemploy- ment total. The short-term loan market is com- fortable with discount rates firm. The increase in the Federal Reserve and Bank of France discount rates was not feit in London. Sterling has hardened. Foreign trade figures for September show an increase in imports—primarily of foodstufls and manufactures in an- ticipation that tariffs will be inaugu- rated in late October, and of raw ma- terials due to the mild export boom under way. Because the export re- vival scarce got under way until Oc- tober, the Scptember figures were only slig] above August. The general tone is good, with op- by election un- certainties, Recession in Germany. Berlin—An extremely critical politi- cal situation, after the prolonged par- liamentary holiday. again overshadows current business developments. Bruen- ing's failure to form a representative National cabinet and secure the co- operation of prominent business lead- ers is largely due to the intrigues of big industry, which has lost faith in Bruening, is particularly disappointed jover the abcence in- the latest emer- gency decree of provisions loosening the rigid wage structure of German in- dustry. Industrial activities are marked by uniform recession. Cotton spinning and weaving industries are increasingly complaining of the effect of fresh Brit- ish competition. Machine building in the third quarter showed orders 10 per cent off when compared with the sec- ond quarter and 30 per cent below last year. Plants are now working at only 40 per cent of capacity, compared with 53 per cent last year. The whole in- dustry is saved from wholesale shut- down only by the volume of foreign orders, now reported to make up near- ly two-thirds of total business. Paris.—Pessimism, nervousness and fear characterize French business senti- ment, though the peak seems to have passed. The week's developments in the United States. England ani Ger- many all contributed. France believes |and foresees a financial panic in the | United States, foresees ~Conservative elections in England followed by tariffs which will paralyze already dwindling French exports, foresees emerging from the present German chaos a nationai- istic government which will stand for repudiation of Versailles and the end of reparatiors. Notwithstanding explanations by American bankers that the dollar is thoroughly secured, the French con- tinue to be obsessed that bank collapses and a financial panic are imminent in New York, provoking the collapse of dollar exchange. A lack of confidence is placed in Hoover’s credit expansion program, which is still viewed as an inflationist step. According to the best French opinion, credit inflation is the underlying cause of the depression, and deflation or elimination of rotten as- sets, not their perpetuation by fresh { inflation. is the remedy and the way |ing to the argument that dividends cr no dividends, earnings or no_earnings. stocks have a certain asset value which is not overestimated in current quota- tions. (Copyright, 1931.) SILVER QUOTATIONS. NEW YORK, October 17 (P).—Bar silver steady and Y higher at 30, out. Either way. a collipse of New York banks, especially those involved in | Germany, is thought unpreventable. Reichsbank Gold Coverage. BERLIN, October 17 (#).—The Reichs- bank reported today that its gold cov- erage was 28.6 per cent, compared with 30.1 per cent last week and 56.1 per cent a yesr ago, s ¢ (