Evening Star Newspaper, February 12, 1932, Page 15

FINANCIAL. SHRINKAGE IN BROKER LOANS CREDIT MEN PLAN | CONFERENCE HERE ifth Annual Session Will Be Held Next Monday—Pro- gram Arranged. BY EDWARD C. STONE. ‘The jated Retail Credit Men of ! ‘Washin n, Inc., will entertain the Co-! lumbia Regional Conference of Credit Executives at the fifth annual session at the Mayflo Hotel next Monday, | the meeting lasting through Tuesday The conference includes _executives from Delaware, Marvland, New Jersey, North Carolina, Pennsylvania, Virginia, | ‘West Virginia and the District of Co- | Jumbia. Harry V. Ostermayer, president of the Washington ociation and credit manager for Wcodward & Lothrop, will | welcome the delegates after invocation by Rev. Simpson B. Daugherty. Stephen H. Talkes. secretary of the Washington association. will make the keynote ad- dress on “The Bureau Manager—Has He Prepared Himself to Meet the Changing Condition: “What the Credit Man Expects of the Bureau" will be discussed by E. Emer- son Snyder, credit manager of Raleigh Haberdasher. Another speaker will be Davis Weir, treasurer State Loan Co., Mount Rainier, and president of the Exchange Burcau of Personal Finance | Companie ! Other speakers will include Charles Martin, Ea ield representative of | the National Cre ; Uffert, Elizabeth, N. J.; Vincent A. Rog- | erson, Clarksburg, W. and C. W.| Hershey, president Pennsylvania State | Association. The second day’s program will include an address on *Proposed Amendments to the National Bank Act as They Affect the Retail Industry,” by R. Preston Shealey, Washington coun- sel National Credit Association. The annual convention of this same organ- ization will be held here in June. Electrical Dealers to Meet. More than 100 dealer and utility ex- ecutives and sales representatives from Washington and nearby Maryland and Virginia will meet here tomorrow for the fourth annual Spring convention of the National Electrical Supply Co., distributors for General Electric refrig- erators, | Headquarters have been established | at the Mayflower Hotel. The conven- tion will open in the morning with a showing inspection of new elec- trical products. Following the session, devoted to commercial refrigeration, there will be a luncheon meeting. The afternoon meeting will be featured by the showing of a talking motion picture prepared for this special purpase in the 1 Electric laboratories in.Sche- ern fi New Insurance Publication, ‘The Life Insurance Club of Washing- ton is publishing a small news sheet on insurance matters. especially doings | in Washington. The first issue has just appeared. James A. Maloney is presi- dent of the club thi ar and Charles B. Sinclair secreta The first num- i5 devoted largely to the unusually amount of insurance the mem- wrote lact year. It also contains r of the full membership. In| tion to the indivi insurance | n here during the year, there was | ase in the amount | ritten in the Capi- iter Flays Short Selling. cther attack cn short by J. George Fred- book called " pub- , New York “Common istria olidation,” “er financial books. ew book, the author declares le business is down about 25 . stock prices have fallen 78 per cent. a part cf this drop being be- “they have been hammered by ort sellers. As a result there is wide ssatisfacticn ~ with exchange rules which permit “bear raiding and un- | economic selling.” | M:. Frederck has much to say about the “bears" and preser to back up his cl his views on “the o ing.” terms the cushion idea a offers proposals for short selling re- forms, presents many details of the Capper bills now in Congress and closes with the exchange's view of short selling as summed up by President Whitley. The book is especially timely since the subject is before Congress awaiting some kind of action, members being anxious to outlaw s sales entirely and still ott remain as the; A. & P. Sales Off 12 Per Cent. Great Atlantic & Pacific Tea Co. re- les for four weeks ended Janu: 1932, were $68,966,599, compa 8. v the same perjod of | R rease of $0,848,271, or 12.5 per cent | Tonnage sales for the above period were 5 against 410807 in the| same period of !ast year, a decrease of 15.379 tons, or 3.7 per cent Average weekly sales in the four weeks' period were $17,241,650, as com- | pared with $19,703,718 in corresponding | period of 1931, a decrease of $2,462,068. Average weekly tonnage sales were 98,857, against 102,702, a decrease of 3,845 ‘ons. H Sales for 48 weeks ended January 30, 1932, without consideration of change in number of stores during the year, totaled $926,734,121, as compared with | $969.522,746 for the like period of pre- | Mod- and to let trading methods are. ing | ceding, vear, a decrease of $42,783.625, | ! salos were a gain of | or 44 per cent. Tonnage 5.087.123, against 4,684.002, 403,121 tons, or 8.6 per cent. BROKER LOAN TOTAL CONTINUES DECLINE! Weekly Federal Reserve Statement | Reveals Drop of $19,000,000 for Week. Bpecial Dispateh to The Star. | NEW YORK, February 12—Thel weeily statement of the Fedoral Reserve | on brok-rs' loans showed a decrzase of $19.000.000 d the wesk ended Fcb- Tu 10 to s . the lowest on record except when the figure stood at $473.438.020. ‘This compares with the previous 1932 low of $505.000,000 last week and with $1,749,000,000 on February 11, 1931. Loans for own account ware £401,000.- 000 compared with $432.000.000 a weck | ago. Loans for out-of-tqwn banks to- taled $78,000,000 against $66,000,000, and loans for account of others re- mained unchanged at $7,000,000. De- mand loans constituted $369,000,000 of the total against $383,000,000 a week | ago. and time loans were $117,000,000 against $122,000.000. | The New York Federal Reserve district | Tediscount rate remains unchang:d at 3)2 per cent. POTATO MARKET. CHICAGO, Febru partment of 7 97 carloads: on total Unito: States shipments, T!‘UD; dull, trading | slow; sacked per hundredweight, Wis- | the preceding w: PUTS MARKET Exch ange M ‘ THE EVENING STAR, WASHINGTON, D. (, FRIDAY, FEBRUARY 12, 1932. NEAR CASH BASIS ember Recalls Days of 2 Years Ago When Huge Sums Were Borrowed. Present Total About $500,000,000. BY FRANK H. M'CONNELL, Associated Press Financial Writer. NEW YORK, February 12.—The mil- lionaire broker of Wall street has a kindlier and more sympathetic feeling today toward the “high cash clothes™ man than he did three years ago. “We're beginning to think maybe we're brothers under the skin" ex- plained one of the silk-stockinged gentry of the street today. “The high cash clothes man does no business on credit. It is cash he gets. And it be- gins to look as if our business is going to become cash—through no fauit or desire of our ow: i The broker tilted back his chair and mused reflectively on the boom days of | 1929, “At the close of a particularly good day we'd frequently meet our fellow brokers going home. We all had the same report to make—business is great, stocks going up and our loans are in- creasing. Huge Borrowings Recalled. “Five houses, alone, each had to bor- row from $200,000.000 to $250,000,000 to finance the purchases of their cus- tomers when the market was at its top. ‘Today these houses are regularly bor rowing a scant $10,000,000 to $20,000, 000 to take care of their customers’ re- uirements. “Th al of all brokers’ loans tod: is barely over $500.000,000. In 1929 there were two houses which together had almost as large a loan account as the total of all houses today. “In fact, our business today is prac- tically on a cash tasis. We have little demand for loans.” Wall street's margin clerks, whose letters are dreaded by speculators play- ing the market on a thin margin of cash. have relatively little to do today. In 1929 forces of them worked day and night on frequent occasions. Today they would welcome an excuse to work half an hour overtime. The clerk who juggled thousand-dol- lar items on his ledger in 1929 is deal- ing in fiftles today. On a relative basis, he is now chalking up $100 on his loan account against every $1,700 he listed in 1929. ‘The latest New York Stock Exchange report as of February 1. last, placed the total of all brokers’ loans at $512.- 000,000. This was less than one-third of the total one vear ago when the figure stood at $1,720,000,000. It was about one-seventeenth of the total re- perted at the 1929 peak, on October 1. when these loans reached $8,549.- 000.000. This shrinkage in brokers' loans ranging_from their all-time high of over $8,500,000,000 io their present level of around $500,000,000, has been accom- panied with steady selling. Those in- vestors who have continued to hold h?ekl]l; stocks practically own them out- right. Market Values. On September 1, 1929, all listed stocks on the New York Stock Ex- change had an aggregate market value of $89,668276,854. On February 1, 1931, their value was cut down to $52.- 061,956.709. On February 1 of this ear their value was reduced nearly ne-hall as much again, or to $26.377,- 647814, On October 1, 1929, brokers’ loans amounted to 9.82 per cent of the totel value of all listed stocks. This figure shrunk to 3.30 per cent on Februarv 1, 1931, and on last February 1 it fell to an all-time low of 1.94 per cent On this basis., the Stock Exchange firms were called on last February 1 to advance only $194 credit for every $100 of stcck held.* as against $3.20 the year previous and $9.82 at the peak of 1929, “While these figures tell an extraord- inary story of security deflation and | steady contracting of loans,” said & | broker, “they also show that stocks | were never held in stronger hands than today. Nearly all investors today are buying stocks on a strictly cash basis.” FIGHT ON HOARDING REVEALS RESILTS Decrease of $5,000,000 Noted in Money in Circula- tion—Banks Reopened. BY JOHN Special Dispatch to Tk NEW YORK, February 12.—The first tangible effect of President Hoover's drive against hoarding—a decrease of $5,000,000 in money in circulation—is reflected today in the weekly report of the Federal Reserve System, represent- ing about one-third of this country’s banks, with two-thirds of the banking resources. While this circulation decline was in progress the Reconstiuction Finance Ccrporaticn reopened numerous banks and national A. CRONE. character. These events almost obscured the disclosure that last Tuesday was the first business day in 18 montns on which there were no bank faflures in the United States. On Wednesday taerc were but two bank closings. The decline in circulation to $5,626.- 000 for the week ended February 10 follows an increase of $42,000000 in and contrasts with gains of $18,000,000 and $17,000.000 in the corresponding weeks of 1331 and 1930. During the last two weeks of January circulation decreased $24,000,- 000 and _$6.000.000 respectively, but these declines were less than seasonal because currency fssued for the Christ~ mas holiday trade usually flows back to the Federal Reserve Banks rapidly dur- ing January. Change Is Encouraging. This change in circulation direction, though small, is encouraging because outstanding since the first of r has increased $51.000.900, as sgainst reductions of $187.000.000 and $226,000,000. Tespectively, in the same periods of the two previous vears, Fed- eral Reserve notes outstanding last week decreased $2.143,000, which com- pares with $4.264.000 and $1,037 000 in the same weeks of 1931 and 1920. re- spectively. The New York Federal Re- serve Bank shows a gain in circulation of $820,000 for the week ended Febru- ary 10, The amount of money out- standing, however, is still too large for actual business needs and represent. a gain—for the entire reserve tem-— of $1,032,000,000 over February 11, 1931 The huge gain jn circulation within the last year took place despite lessened business” activities and consequent smaller monetary needs. Currency in active use propbably is not as large as a year ago. Currency, however, now Is used in “bankless” communities, where checks normally would be em. ployed in personal and business tran actions. Most of the gain in circula- tion therefore represents “inacti holdings by individuals,” or, in plain arding. Member bank reserve balances, how- ever, showed a decrease of $32,000.000 this last week, against a reduction of only $8,000,000 the preceding week. This item 1is important because it is an ac- curate index of the active money in supply, since such balances are related s directly to deposits in member banks | through which the great bulk of busi- ness transactions in this country are settled. Reserve balances in their de- scent reflect a corresponding shrinkage in bank deposits, partially caused by the withdrawal of funds by domestic and foreign depositors, but more large- legislators worked on & new banking bill of anti-deflationary | larkets Closed In New York for . Lincoln Birthday | By the Associated press. | NEW YORK. February 12 !servance of Lincoln’s hirthd versary, a legal holiday in New | State, an security and commodity changes and banks were closed toda | The New York Stock and Curb Ex changes and most of the commodity markets will be open on Saturday. In ob- anr York Iy as a result of contraction in bank loans and investments. Security Loan Liquidation. | That the banks continue to encou-| rage liquidation of loans on securities | is shown by the weekly report on Fed- eral Reserve brokers' loans, which in | the last week declined for the twenty- third consecutive week. The decrease of $19,000,000 contrasted with a reduc- tion of $8,000,000 a week previous. It brought the total of brokers' loans to $486,000,000, the lowest figure since January 25 1918, when they stood at 38,000 $4 Total Federal Reserve credit out- standing for the week ended February 10 decreased $31,000,000. This con- trasted with a gain of $12,000,000 in the preceding week. This item is now $850,- 000.000 above the figure of February 11 1931. The expansion in total Federal Reserve credit in the last year largely has been influenced by movements of currency in circulation, reserve balances of member banks and the stock of monetary gold in the United States. The gold money stock of this country declined $3,000.000 du!‘l‘nghl)le last week. 'FEDERAL RESERV CREDIT ITEM DROPS | Daily Average Volume for the Week Ended February 10 Was $1,807,000,000. By the Associated Press. The daily average volume of Federal| Reserve bank crecit outstanding during the weck ending February 10, as re- ported by the Federal Reserve banks.l was §1,807,000,000. This was a decrease of $23,000,000 comrared with the preceding week and an increase of $859.000,000 as compared with the corresponding week in 1931. On February crease of $31.000,000 for the week. This |a decrease of 657 10 total reserve bank| credit amountzd to $1.779,000,000, a dl‘-i AMERICAN STORES NET HOLDING UP Income for 1931 Lower, but Outstanding Stock Was Reduced During Year. Although net income for American Stores for 1931 lkely will show some decrease from the 1930 figure, it is probable that share-net will approxi- mate the $4.01 reported for 1930, as the number of shares outstanding has een reduced during the past year. Be- tween the end of 1930. and June 30, 1931, American reduced the outstand- ing shares 24,547 to 1,454.244, and it is possible that a further reduction in out- standing shares was made during the second half of last year. American Stores Teported _earnings, says the Wall Street Journal, for the first half of 1931 equal to $1.87 a share, compared with $1.75 for the first half of 1930. Earnings for 1930 were equal to $4.01 a share on 1,478,791 shares out- standing. During 1931, American Stores in- creased the number of stores in its chain to approximately 2,800, against 2728 at the end of 1930. New stores added were practically all in Syracuse. N. Y, territory, where the company ha been extending its activities recently, having completed 2 new warehouse in that city to take care of 350 stores. Adding to Baltimore Warehouse. It is constructing an addition to Baltimore warehouse to increase fits capacity and enable it to take care of 100 new stores. Present capacity of the warehouse is 25C stores. Facilities of the warehouse, including the bakery, are now taxed to the limit by the com- pany’s stores in Maryland, lower Dela- ware and part of Virginia. While American has already entered Virginia, it plans to establish new stores in this territory when addition to the ware- house is completed. Despite a decline of 53 per cent in the dollar value of sales, business of the chain held up well throughout the year. Decline in sales is due largely to the drop in retail selling prices, so that tonnage sold probably increased. It is almost assured, the Wall Street Journal adds. that American Stores will declare the regular quarterly dividend of 50 cents at the dividend meeting scheduled for about the middle of Feb- ruary. The corpany has always pur- sued a conservative dividend policy, its ithe $2.50 a share dividend disburse- ments in 1929 and 1930 amounting to only about 60 per cent of earnings. Although results for 1931 likely will be lower than for 1930. American probably will stow an ample margin over divi- dend disbursements. Outstanding Shares Reduced. For vears American Stores has been reducing the number of shares out standing. At the end of 1924 outstand- ing shares were 1640,031, and since then the number has been reduced al- | mcst every year. This has helped to istain earnings on the outstanding skares even though net income has de- clined. The following table shows net income. number of shares ng and share net for the years 1924 to 1930, and the first half of 1931 ELECTRICITY'AND GAS OUTPUTS IN DECREASE For the month of January, Asso- ciated Gas & Electric System reports electric output, excluding sales to other utilities, of 222,309,739 units (kw.h.), under January of For the 12 months ended electric output showed a last year. January 31, decrease of 3.07 under the total for the | 12 months ended January 31, 1931. Gas sales for the month were 1.- 522,174,400 cubic feet, or 13.3% below | January last year. For the 12 months ended January 31, gas sendout totaled 17,527.544.500 cubic feet or 4.67 below the’ previous 12 months. The abnor- mally warm weather, as compared to last year, has been one of the prin- cipal reasons for the recent decreases in electric and gas outputs. [LONDON MARKET FIRMER ON U. S. CREDIT AID PLAN By the Associated Press. LONDON, February 12—The Amer- ican plan to broaden the rediscount bas's of the Federal Reserve Bank, to- gether with the firmness of the New York Stock Exchange yesterday, created a better atmosphere on the exchange here today. Business was not greatly increased, but the gilt-edged issues were generally up '; to !;. Japanese bonds, oil shares ecrease corresponds with decreases of | and transatlantic issues also improved. $32,000,000 in member bank reserve bal- ances, $5,000.000 in money in circula- tion and $18.000,000 in unexpended cap- ital funds, non-member deposits, etc. It was offset in part by decreases of $3,- 1 000.000 in monetary gold stock and $22 000,000 in Treasury currency, adjusted. Holdings of discounted bilis declined $19.000,000 at the Federal Reserve Bank | of New York, $8,000,000 at Chicago and $36.000,000 at all Federal Reserve banks. Tha system's holdings of bill bought in open market increased $1 000.000 and of United States Treasury | notes $7,000,000. Holdings of Treasury certificates and bills declined $14,000,- —_— Turkey Imports. | By the Associated Press. Imports of turkeys in 1931 amounted | to_more than $1,000,000. Figures prepared by the Commerce | Department indicated there were in- | coming shipments of 134,888 pounds of | live Turkeys, valued at $25,734 during ! the year, and 5,298,994 pounds of dead turkeys, valued at $1,051,408. STOCK AND BOND AVERAGES By the Ass STO! Yesterdoy Previous day Week ago. Month age. Year ago.... Three years ago Five years ago. High, 1932. Low, 1932. High, 1931. Low, 1931. High, 1939. Low, 1930. Yesterday ... Previous day. Week ago.... Month 2go Year 2g Fhree ¥ High, 19 Low, 1932. High, 1931. <onsin round whites, 80a85; unclassified, 70a72%; Nebraska _Triumphs, best, 1.1581.20: Michigan Russet Rurals, 80a 8p; Idaho Russets No, 1, 1.35a1.45; few “Ddgden Low, 1831, High, 1930 Low, 1930 (Copyright, 1932, Btandard Statistics Co.) ated Press. CKS. 2813 1465 20 Utilities. 81.9 818 824 83.7 100.8 973 968 In the exchange market sterling ad- vanced to $3.44%. Baltimore Marke Special Dispatch to The Star. BALTIMORE, Md., February 12— White potatoes, per 100 pounds, 758 1.00; sweet potatoes, bushel, 40a80; yams, barrel, 75a150: beans, bushel, 150a2.50; beets. per quart, 10a15; cab- bage. hamper, 75a1.40; carrots. bushel, 1.00a1.25; caulifiower, crate, 1.75a1.90; celery, crate. 150a3.75; = eggplants, crate, 1.5002.75; kale, bushel, 25a40; onions, per 100 pounds, 3.0024.00; pep- pers, crate, 1.50a2.75: spinach, bush 50a85; squash, bushel, 1.00al1.75; matoes. crate, 1.00a3.00; turnips. ham- per, 15a25; apples, bushel, 75a1.75; grapefruit, box, 1.25a2.50; oranges. box, 2.00a4.00; strawberries, pint, 12a18. Dairy Markets. Chickens—Young, 20a22; Leghorns, 17a18; old hens, 15a20; Leghorns, old, 15a16; roosters, 11al3; ducks, 12a20; 11al17; guinea fowls, pair, 20 Eggs—Receipts, 1,038 cases: nearby firsts, 141; western firsts, 1415 Butter—Good and fancy creamery, 21a24'.; ladles, 15a16; process, 20a2l; store packed, 10all. 5 Live Stock Market. Cattle—Receipts, 1,000 head; fair sup- ply: market dull. Steers—Choice to prime, none; good to_choice, 6.00a7.00; medium to good, 4.7585.75; fair to medium, 4.00a4.75; plain to fair, 3.50a4.00; common to plain, 3.00a3.50. Bulls—Good to prime, none; to choice, none; medium to good, 3.75a 4.00; fair to medium, 3.50a3.75; plain to fair, 3.25a3.50; common to plain, 3.00a3.25. Cows—Choice to prime, none; good to choice, none; medium to good, 3.50a 4.00; fair to medium, 3.25a3.50; plain to fair, 2.503.25; common to plain, 1.5082.50. Heifers—Cholice to prime, none; good to_choice, 5.00a5.50; medium to good, 4.5025.00; fair to medium, 4.00a4.50; plain to fair, 3.00a4.00; common to plain, 2.5023.00. Fresh cows and springers, 30.00a60.00. Sheep and lambs—Receipt, 300 heac llght supply, market steady; sheep, 1.00 23.00: lambs, 4.00a7.40. Hogs—Recelpts, 1,000 head; light supply, market steady; lights, 4.45a4.85; heavies, 4.10a4. medium, 4.6024.90; roughs, 2.75a3.75; light pigs, 3.7584. pigs, 4.1024.55. Calves.-Recelpts, 75 head | Everybody’s Business Marked Changes for Better in Economic and Financial Status of Country Seen in Revised Bank Bill. BY DR. MAX WINKLER. NEW YORK, February 12 (N.ANA). —In its revised form, the bank bill evolved by United States Senator Car- ter Glass is generally viewed as con- structive. The Senator from Virginia and all or, at least, most of those who are responsible for the project, ex- pect very marked changes for the bet- ter in the economic and financial status of the country. They anticipate that the bill, if passed, will bring out of hiding hoarded money and afford protection against raids from abroad against American reserves. These hopes are based upon the pro- vision in the bill which will make it possible for member banks to obtain from the Federal Reserve Banks ad- vances which are not now technically eligible for rediscount. Such advances may be obtained under proper safe- guards, either on indorsement of other member banks, or, in unusual cases, without indorsement. In other words, institutions which do not possess eligible paper, but which have other sound and adequate secur- ity, will be in a position to take care of 'whatever requirements their cus- tomers may make upon them; while banks which have no immediate use of the above provisions by reason of their existence will pot hesitate to extend financial accommedation to their clients. It is rather apparent that measures of this character will tend to put a stop to the continuance of bank failures. which have been one of the principal causes of the drastic liquidation in the securities and commodities markets. ‘They will also make possible credit ex- pansion, thereby facilitating improve- ment in business throughout the coun- try. | Another feature of the bill is the em- ployment as a basis for credit of the large supply of gold of Federal Reserve System in excess of the 40 per cent pro- vided by law. That is to say, certain of the assets acquired by the reserve banks and comprising mainly United States Government issues will be avail- able for not more than one year as col- lateral for Federal Reserve nates, in addition to the 40 per cent cover In this way, the Reserve System’s free gold will at once increase by scme- thing like $850.000,000, which possibly may set at rest rumors circulating abroad in regard to the possibllity of the United States abandoning the gold standard, and to which may be at- tributed the incessant withdrawals of the vellow metal for Eurcpean account. The greater flexibility which the pro- posed bill is expected to give te the op- erations of the Federal Reserve, may conceivably result in a rather marked expansion in the nation’s business. In this connection. plans devised by Henry Ford are worthy of careful considera- tion. Tre world of commerce and in- dustry has been startled more than once by the dean of America’s indus- trial monarchs. Mr. Ford’s views on | business are often revolutionary M character. They do nct, as a rule, fail to have a profound effect upon | economic conditions in the country. Tranks to the ramifications of the Ford enterprises in all parts of the world, whatever move may be undertaken by | the Detroit sizard is felt equally keenly the confines of the United | beyond ste Business is admittedly at a low ebb. {It has been that way for mearly two and a half years. Many measures have been proposed to bring about a change. tted to Washing- | program which would make for a speedy recovery. All ce- vices were purely theorctical. Nothing cencrete was undertaken. Miracles were expected to happen. In the midst of the prevailing uncer- tainty, Carter Glass and Henry Ford | come to the rescue. Mr. Glass' plan | | has been discussed. As to Mr. Ford, i he is building on a rapidly increasing | scale and will soon be offering a new | model, at the lowe:t cost ever known, | to the greatest number of buyers. The | marked increase in output may very conceivably set the wheels of industry going. Production at' the vast Ford enterprises will require increasing amounts of raw materials and various other items which go int> the manu- |facture of the new Ford product. The crux of the situation lies, how- ever, in the creation or, rather, tke re- vival of a market for the new car. To this all-important question, the Detroit | manufacturer supplies what may be | considered a thoroug! honest answer. | He is aware of the existing difficulties which the nation faces. He realizes that events in the past two and a half | vears have reduced appreciably fhe pur- | chasing power of the people. He also | knows that in order to purchase what | are not strictly speaking necessities of | life. some extraordinary _inducement will have to be offered. This induce- ment. Mr. Ford maintains, consists of meeting the public demand by giving it sorething new and better at a price which the average man can afford. (Copyriaht. 1932, by th h American ton, outlining a { e N Newspaper Aliiance, Inc.) EXPORT OF FOODSTUFFS DROP TO PRE-WAR MARK By the Associated Press. The depression in world markets, re- sulting in lower prices and less de- mand, was reflected in United States exports of foodstuffs during 1931. Reports of the Commerce Depart- ment show the export value of this commodity group was $374,000,000 dur- ing the year, as compared with $541,- 000,000 in 1930, the latest year being on practically a par with the expert level before the World War. The trade in cereals and cereal prod- ucts, meats and fats and oils show the greatest low, while shipments of fresh, canned and dried fruits; fresh, salted, smoked and cured fish increased con- siderably. PARIS BOURSE PRICES. PARIS, February 12 (#)—Three per cent rentes, 78 francs 80 centimes. Five per cent loan, 101 francs 50 centimes. Exchange on London, 87 francs 34 centimes. The dollar was quoted at 25 francs 35% centimes. . CLEARING HOUSE FIGURES. ‘Washington Clearing House figures for today: $3,578,602.53 INSURANCE H COMPANIES —and OTHERS having Valuable Records —to preserve, are invited to utilize our Storage facilities, in a centrally-located FIRE- PROOF Building...guarded day and night by watchmen, thus insuring maximum safety. fWhy use valuable space in your office when we furnish— Individual Rooms as low as $4 per month —equipped with racks to fa- cilitate examination of records, whenever desired? Merchants Transfer | and Storage Co. JOHN L. NEWBOLD. JR.. President 920922 E St.~—Nat. 6900 f| 8torare—Moving—Packing—Shisping BUSINESS AWATS STOGK SALE TAXES STEPS N FINANCE Dr. Edie Believes Reserve Board Holds Vital Power in Helping Conditions. Special Dispatch to The Star. PHILADELPHIA, February 12—Ad- dressing a gathering of local capitalists at luncheon in the Union League Club yesterday as a guest of the Penn-At- lantic Corporation and the Davidson Capital Co., Lionel D. Edie, widely known economist, declared that busi- ness will have to await a clearing of the financial skies before better times can return. 9 Dr. Edie stated that the depres- sion started with $130,000,000,000 of long term credit in the United States and perhaps $30,000,000,000 of short term bank credit. During the past two years and a half long term credit has slightly increased, but the bank credit has been cut about one-third. “Roughly speaking,” Dr. Edie said, “the burden of the long term debt has risen be- cause of & lower price level. To pay the same debt now as in 1929 the debt- or must part with four times as many bushels of wheat, or with five times as many shares of stock, or with twice as much real estate. This is the financial colossus which bestrides business and frustrates recovery Dr. Edie described the most impor- tant roads out of the trouble as fol- lows: Drastic Economy Urged. “PFirst. Government credit, Federal, State and municipal, is menaced by failure to curtail expenditures. Cur- tailment by at least 20 per cent is urgently needed. The alternative is defaults on a large scale. Moreover, is it not time tbat we ceased to look upon the Washington Government as a kind of tree upon which money grows painlessly and from which it can be appropriated for everybody's pleasure? “Second. International credit is menaced by the carryover of wa: finance. Reparations are a lost cause, and the sooner the world recognizes the fact the better. War debts intro- duce the dilemma of either further compromise adjustments or default. We need to work out the first horn of the dilemma_without delay. “Third. Domestic bank credit fs menaced by violent centraction having no correciive value. The contraction in recent months at the rate of 25 pe: cent per annum disorganizes buying | power and undermines public confi- dence. If we wait for a return of hoarded currency to start the restora- tion of confidence, we put the cart before the horse. Restoration of confi- dence bas to precede reversal of hoard- ing. Deliberate action lies within our power in the form of a Federal Re- Serve policy aimed at vigorously com- bating deflation. This does not mean cheap money. but an orderly volume of money. Specifically. it means pur- chases of bills and Government securi- ties in the open market on a scale adequate to restorc the reserve bal- ances of member banks which have been torn down by hoarding. Deflation Vest Be Stopped. “Fourth. It is well to face clearly the probability that unless conservative action js taken along this line, infla- tion is likely along radical lins. The cnly means of avoiding a violent in- flation is to take steps to stop defla- ticn here. » “Fifth. The Reconstruction Finance Corporation is intrinsically neither in- | flationary nor deflation: It j grand experiment in rescue work. As an experiment it is offered to a de- | pression-sick Nation, and as an experi- ment we have to view its progress with | miny question marks in our minds as ! to exactly what it can do. Will it be strictly non-political? How loosely will | it define ‘adequate security’ for its loans? How rapidly will it get action? How many applications for relief wiil be showered upon it? The public does not know. “But one fundamental the public can observe is that the success or| fatlure of this great experiment depends more upon general credit policy as ap- plied by the Federal Reserve System than upon the one-by-one acts of rescue performed by the corporation. Without & more positive Federal Re- serve policy for combating further gen- eral crecit liquidation, the Reconstruc- tion Finance Corporation will work under almost insuperable handicaps. “In firal analysis. we are now in a race between industrial stagnition and financial clearing of the skies.” TREASURY BILL ISSUE FAR OVERSUBSCRIBED The Treasury announced today that tenders for $75,000.000 of 93-day Treas- ury bills dated February 15, 1932, and maturing May 18, 1932, were opened at the Federal Reserve Banks on February 11. The total amount applied for was $211,872,000. The highest bid made was 99.400, equivalent to an interest ; rate of about 2.32 per cent on an annual basis. The lowest bid accepted was 99.267, equivalent to an interest rate of about 2.84 per cent on an annual basis. The total amount of bids accepted Was $75,689,000. The average price of Treasury bills to be issued is 99.287. The average rate on a bank discount basis is about 2.76 per cen: ENTERPRISE SERIAL BUILDING ASSOCIATION 7th and Indiana Ave. NW. LOANS On improved Districh of Columbia Real Estate Security 67th Series of stock now open for aubscription James E. Connelly, James F. Shea, President Secretary 1t gets dark EVERY NIGHT and people eat EVERY DAY @ Stability of earnings of the utility industry are safeguarded by the continued and increasing de- mands for residential electric and gas service. Homes served by the Associated Gas and Electric System increased their use of electricity on the aver- age 8.3% during 1931; use of gas held its own, remaining practically une changed. @ For sound utility investments write for Circular B 244. General Utility Securities Tacorporated 6l Broadway New York City Bowling Green §-8070 FINANCIAL, MOVEMENT GROWS Other States May Follow Example Set in New York. BY JOHN F. MILLER. N Beveral States are now considering | the imposition of stock transfer taxes, | tax experts pointed out today. The| increase voted by the State Senate in the New York tax, from 2 to 4 cents a share, was expected, and in all proba- bility this move will be followed by Pennsylvanis, Massachusetts, South Carolina and Florida, which have simi- | lar_levies. Two reasons were assigned for the belief that other States will adopt this form of tax. In the first place, all of the States, need additional revenue, | and, secondly, the stock transfer tax could be used to replace the amount lost by some of them under the Su- preme Court's recent decision prohibit- ing double inheritance taxes. On January 4 the Supreme Court held that a death tax on shares of stock may be imposed only in the place where the decedent resided. This de- prived several of the States of & pro- lific source of revenue. In Kansas, for | example, an inheritance tax was im- | posed upon the transfer of all shares of stock of the Santa Fe Railroad, even though the owner had resided in New York or some other State. Montena annually collected a large sum on shares of the Anaconda Copper Co Kentucky, Minnesota, Oklahoma and Utah w among the other States using this source of revenue. Nothing would be more natural than to replace it with a stock transfer tax. If several more States adopt a stock transfer tax it will undoubtedly result in some legal tangles. For example, | the stock of a Kansas corporation is | transferred in New York. Could both | Kansas and New York impose a stock transfer tax? It should be remem- | bered, in this connection, that the Ped eral Government is almost sure to in- crease the Federal levy from 2 cents to at least 3 and possibly 4 cents a share. While the yield from the New York tax cannnot be compared to that re- ceived under some of the State's other levies, it amounts to a substantial sum The peak was reached in 1929. when, 2ccording to the Stock Exchange, more than $40,000,000 was realized. Last year the State's revenue from the tax was only about $18400,000. (Cor 1032 Plant Addition Planned. LAFAYETTE, Ga., February 12 (#).— The Peerless Woolen Mills at Rossville have announced plans for a $100.000 addition to the plant, which is one of the largest manufacturers of woolen goods in the South. About 600 people are employed at present. | Money on Hand to Loan on First Deed of Trust 67% Interest Reasonable Commission and Prompt Replies to Applicztions JAMES F. SHEA 643 Indiana Ave. N.W. 7} T 1 [ It > 19 SRR - 5 ’ The People’s Life Insurance Bldg. 14th and H Sts. N.W. The Location —is in the center of the busi- ness sectic T he Building architecturally att and of modern fireproof struction. 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