Evening Star Newspaper, February 14, 1932, Page 61

News of Markets Pages 1 to 4 FINANCIAL AND CLASSIFIED he Sunday St WASHINGTON, D. C, SUNDAY BLLTOREGULATE SECURTES SALES NI, AVLYZED Legislation Proposed by Rep- resentative Bowman Is Ap- proved by Bankers. MEASURE WOULD CHECK SWINDLING IN DISTRICT Close Scrutiny of Prospective Sales- men's Records Is Provided—Au- thorities’ Powers Broadened. BY EDWARD C. STONE. Details of the bill “concerning super- vision and regulation of the sale of securities within the District of Colum- bia.” just introduced in Congress by Representative Frank L. Bowman of West. Virginia. show the purpose of the latest legislation is to protect the in- vesting public in the National Capital against fraudulent practices in securi- ties transactions. At the present time the District of Columbia lacks a specific security law, although great has | been suffered by victims of security swindles in years past Representative Bowman's bill has the support of the Investment Bankers' As- sociation of America. Study of the pro- visions reveals the fact that it avoids the creation of any new bureau. In- stead, it provides that the administra- tion of the law shall be handled by the present superintendent of insurance in | the District The fundamental feature of the bill is the idea that no person shall be per- mitted to engage or to continue in the securities business in the District who has been convicted of any criminal offense in connection with any transac- tion involving securities, or who has been found guilty by any court of a violation of any securities law, either in the District of Columbia or in any State. This same principle will be applied with equal force against any partner- ship, corporation, or other form of busi- rization. where the personnel as a partner. principal, officer, or office manager, any person who has been so convicted or found guilty. Salesmen to Be Registered. In applying this basic principle it is required that all securities dealers and salesmen must register their names and addresses with the superintendent of | insurance and file with him a state- ment. under ¢ as to their record in securities matters and also giving their g the previous five securities business. will be allowed to be regis- tered as a dealer or salesman so as to entitle him to sell securities in the Dis- trict of Columbia for two years after the cate of a conviction of any criminal offense in connection with a securities transaction. nor for two years after he has been found guilty by a court of any violation of a securities law, regardless of whether such conviction or such finding of guilt occurred or was made in a court in the District of Columbia or in a court of any State. The bill provides that two or more such convictions or two or more such security law violations shall constitute & permanent disqualification in the Dis- trict of Columbia, and under this bill no person who been twice so con- victed or guilty of a security law viola- tion will be allowed at any time to engage or continue in the securities business in the District of Columbia. Further Protection Planned. s a further protection against fraud- ulent practice s. the bill gives the super- intendent of i nee wide powers to invest either upon complaint or upon initiative, whenever he deems it ary. He may subpoena books, record ) itnesses, and he may require the parties offering to sell securities to furnish him with a full showing of the facts concerning the security and to justify their representa- tions about the security, and to this end he may req them to give him minute details as to the complete set-up of the company iss security, the business of that compa its plan. its el. 5 assets i its liabilities, as complete information about r under which and the metheds by which the securities are to be sold. If ¢ ed, the superiniend- | ent may bring suit in the Supreme Court of the District for an injunction. Such action start with a tem- porary injunction to stop the sale of 2 while the question of decided. As a practica’ the fraud .is clear, sud . vunction will put an end It will be followed njunction where fraud found that fraudulent oper- ssets. such as valuable se- ounts. the bill pro- the superintendent may move | to appoint a receiver to take| s and to conserve fit of those who have | > 1t appears necessary | vic pending the com- ntendent’s investi- ing the time when he i5 evidence in shape to go njunction, the super- immediately suspend 1 of such parties, the ef- fect of h will be to immediately stop th i ale of the security until the case can be determined by the courts ‘The provisions of the bill are modeled, to a large after laws now in force in several of the important East- ern States. and the experience in those wh States confirms the belief that a law along these lines will serve as an ef- fective method of protection to the in- 2 public in the District of Co- e i no regquirement in the bill for the licensing of securities before their sale. and under this bill there is no official approval given to any se- curity allowed to be sold, nor to any security vendor. Licensing System Avoided. As a practical matter, licensing se- curities can do more harm than good, and the practical disadvantages of such licensing more than offset the theoreti- cal advantages. During the past 20 years a number of States have been using the license system, and while that system was designed to work for the public good, the experience has been ystem also works for public the tendency has been under tem for investors to regard license as relieving them of the necessity of educating themselves before investing, and it has even pro- GOLD BASE ABANDONMENT] BY U. S. EXPECTED ABROAD’SmBK GAINSLAD Europe Continues Skeptical as to Value of Dollar—Effect of Balance Withdrawal s Analyzed. BY DR. MAX WINKLER. Special Dizea™ w0 The Star. NEW YORK, February 13.—Europe is still skeptical in regard to the United States dollar. The Old World seriously doubts America’s contention that the status of her currency is impregnable and that regardless of the severity of attacks it will continue to hold its own. A representative of one of the most influential banking houses on the Euro- pean continent, with ramifications all | over the world, informed the writer | that his head office as well as the vari- | ous branches constantly inquire as to | the position of the United States dollar. He maintains that the inquiries are di- rected not so much as to whether the United States will or will not abandon the gold standard. The abandonment of the gold standard most of Euroj seems to take for granted. What the inquirers wish to know is, how soon it will be given up. Position of Dollar. The representative in question con- stantly advises his European affiliations | that no such steps are coniemplated by | the United States. To all his protests, | Europe comes back with rather potent arguments. What is the true picture as it pertains to the United States dollar? What are the factors., within the United States and without, which can exert sufficient influence upon the currency to induce | the Government to resort to a method. | adopted, directly or implicity. by about 90 per cent o fthe nations of the world? America’s stock of gold approximates $4.500,000.,000. This gold serves as a cover or pro- tection for the Nation’s money in cir- culation, composed about as follo Pederal Reserve notes. $2.900.000,000 z0ld certificates, $1,750.000,000; Na- tion bank notes, $710,000.000; United States notes, $346.000.000. and subsid- | iary silver, $308.000,000. Including various other kind of money. we obtain a total of about $5,000,000,000. No ac- count is taken of deposit liabilities. Thus, one obtains a ratio of about 90 per cent, which is more than ade- quate protection for the Nation's money. However, the above metallic cover does not take into consideration foreign balances, which are conservatively esti- mated at $1,250,000,000, of which Prance still accounts for about $660.- 000,000.. In addition, foreign invest- ments in the United States are esti- mated at $4,500.000,000, of which prob- ably not more than $2,500,000.000 repre- sents securities which are more or less readily marketable. The remainder comprises direct investments—that is. the placement of funds by foreigners in various plants and properties located in the United States. Withdrawal of Balances Unlikely. In other words, America’s stock of gold, amounting to about $4,500.000,000, is faced with the possibility of being called upon to give up about $3,750.- 000.000, provided all balances are with- drawn and every dollar’s worth of American securities held by foreigners disposed of. Such a step, however, on the part of Europe, is well-nigh unthinkable Should' it, however, develop, or merely threaten to develop. the United States could throw upon the market big blocks of European securities which are still regarded as fundamentaly sound invest ments. These, if offered at “bargain prices, would doubtless find ready takers. Among them may be mentioned French, Swiss, Belgian, Dutch. and British securities and, to a lesser extent, Scandinavian issue: But would the American investor owning such obliga- tions agree to sell at unjustifiably low prices? Hardly. Viewing the situation from all possi- ble angles, the European financiers in- sist their apprehensions are not en- tirely fantastic. It is hoped and ex- pected, however, that they will not be realized. (Copyright. Newspaper Alliancy 1932. by the North Inc) FLEMING MEMBER OF GREDIT BOARD Reconstruction Finance Unit Is Already Functioning in Fifth District. Robert V. Fleming. president of the | Riggs National Bank, has been made a member of the Advisory Loan Com- mittee for the Fifth Federal Reserve district, of the Reconstruction Finance Corporation, which has done so much 10 revive sentiment during the past few days. Mr. Fleming was the organizer several weeks agé of the Washington unit of the National Credit Corpora- tion. another organization started to bolster the banking situation all over the country. The Federal Reserve Bank of Rich- mond has been made headquarters of | the Reconstruction Finance Corpora- tion in this district, the work being in charge of Deputy Gov. R. H. Broaddus. The first loan application in this ter- ritory has been forwarded from Rich- mond to the head offices here so that | the new plan is already functioning. | The Fifth Federal Reserve District | Advisory Loan Committee, announced at Richmond, is made up of the fol- lowing bankers: John M. Miller, president. First & Merchants’ National Bank of Rich- | mond: Julian H. Hill, president. State- | Planters’ Bank & Trust Co. of Rich-| mond: Oliver J. Sands. president, American Bank & Trust Co. of Rich- mond; N. W. Phelps, vice president, First National Exchange Bank of Roa- noke; Charles E. Rieman, president, Western National Bank of Baltimore; A. H. S. Post, president, Mercantile Trust. Co. of Baltimore; Robert V.| Fleming, president, Riggs National | Bank of Washington; J. L. Dickinson, | president. Kanawha Valley Bank of Charleston, W. V: George M. Moore, | vice president, Union National Bank of | Clarksburg. W. Va.; Robert M. Hanes, president, Wachovia Bank & Trust Co. of Winston-Salem, N. C. Word H.| ‘Wood. president, American Trust Co. of | Charlotte. N. C.;. W. §. Ryland, presi- | dent, North Carolina Bank & Trust Co. of Queensboro, N. C.; B. M. Ed- wards, vice president, South Carolin: National Bank of Columbia, S. C.. W.| J. Roddy, st., president. Central Union | Bank of South Carolina, Rock Hill, | S. C., and A. L. M. Wiggins of Harts- ville, 8. C. PRICES ARE STEADY ON D. C. EXCHANGE |Gas Bonds, Capital Traction and Mergenthaler Given Satur- day Attention, Washington Gas Light 6s, series A, opened trading on the Washington | Stock Exchange yesterday, $100 selling at par. Later $1,000 of these bonds sold | at the same figure. . Capital Tractioi stock figured in & sale of 16 shares at 18%. Tradmng in this issue has been quiet for several weeks, but this does not indicate any lack of interest in the stock. Holders are awaiting with the greatest concern the outcome of the present merger plans now before Congress. | Mergenthaler Linotype appeared on | the board during yesterday's trading. A | small lot moved at 53, the recent pre- vailing_price. aIn %hg unlisted department the bid price on Mayflower Hotel 6s has been reduced from 20 to 19 and the asked price from 25 to 22. The price leaps on the New York Exchange yesterday drew very wide comments among the members of the local exchange. DIVIDENDS DECLARED NEW YORK, February 13 (A)— Reduced. Electric Controller & Manufacturing, duced the belief that there was a moral guarantee or responsibility of some kind on the part of some Government or semi-governmental agency. For that reason this bill is designed o avoid the rlr.f&lls incidental to such a system of [icensing securities or dealers, says Rep- resentative Bowman. 75 cents quarterly, April 1, March 18. United States Envelope, $2 semi- annually, March 1, February 15. Regular Dividends. Erie & Pittsburgh Railway, 8714 cents quarterly, March 10, March 1. Hiram Walker, Gooder! & Worts, 6%, cents, March 15, 2 . Upper: Clarence F. Norment, jr., for several years president of the Norfolk & Washington Steamboat Co. —Harris-Ewing Photo. Lower: J. Allen Riordon, again made general manager of the company at the annual meeting held a few days ago. 'HOME REPAIRS URGED ON NATIONAL SCALE Agency Now in Operation Here ‘Will Promote General Im- provement Program. By the Associated Press. A national agency to aid business re- vival through a national stimulation of the repair and improvement of residen- tial, commercial. industrial and institu- tional property has been put into opera- tion here. The undertaking is a part of the pro- gram of the Commerce Department Committee cn Reconditioning, Remodel- ing and Modernizing, implemented by local community organizations, and is the outgrowth of the President’s Con- ference on Home Building and Owner- ship. Inquiry by the department has dis- closed that more than 50 per cent of | the many important lines of materials and equipment produced for construc- tion in 1931 were consumed by remodel- ing and improvement projects, and it is predicted that a still larger percentage of such materials will be used in this same field in 1932. ‘The annual repair bill of the country is said to aggregate hundreds of mil- lions of dollars. A considerable portion of the normal repair and improvexent projects has been deferred for more than three years, and there is said to be evidence to indicate this large field of potential business can be stimulated into action. Rail Steel Order Placed. CLEVELAND, Ohio, February 13 (#). —The Erie Railroad announced today awarding of contracts for new rail- road steel for 1932 totaling 33,230 gross tons. The awards follow: Carnegie Steel, 18,955 tons; Illinois Steel, g ‘Bethlehem, 5555, and 10 MOVEMENT FOR BROADENING CREDIT Sudden Spurt in Securities and Commodities Follows Government Aid Plan. INDUSTRIAL OPERATIONS REVEAL LITTLE CHANGE Business World Is Awaiting Re- sults From Banking Legislation Pending Before Congress. BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, February 13.—Since the middle of last June there have been five incidents ar developments that have had a pronounced effect on secur- ities and, in each case, have helped to revive drooping prices. The first was announcement of the 1-year moratorium. This was respon- sible in large part for the average rise in stocks during June of about 20 points. The second was the formation in Octo- ber of the National Credit Corporation, whose anticipated aid to banks pro- duced another 20-point rally. In January the Reconstruction Fi- nance Corporation bill was passed, with a favorable reaction to this in the form of & 15-point average rise, although some part of it should be credited to the fourth constructive event—namely, the reduction in railway wages. Just before the Lincoln's birthday holiday this week announcement was made in Washington of proposed new banking legislation to remedy temporary faults in the machinery for distributing bank- ing credits. This stopped the decline in stocks and bonds and out of it has come the strongest recovery of the year. Relief Given Banks. Each one of these developments has produced some permanent good, al- though none has measured up to ex- pectations. The frequency with which emergency measures have been pro- moted has had the natural effect of creating some skepticism as to their efficiency. The moratorium prevented a complete collapse of credit in Europe. The National Credit Corporation, while functioning slowly and cumbersomely, has, especially in the past two months, relieved many dangerous banking sit- uations. The psychological effect of the Reconstruction Corporation has been that of promoting a feeling of hope as against the utter lack of confidence that prevailed prior to its formation Possibly the fact that the Union Pacific directors this week felt justi- fled in maintaining their regular com- mon stock dividend may be regarded as evidence of assurance that this dividend can be earned with the lower operating costs obtained through the wage cut. Politically it does not look like a good move. It remains to be seen how far the proposed and suddenly formulated banking legislation will assist in correct- ing conditions that now confront mem- ber institutions and will balance the effects of additional fears on the part of European financiers that this coun- try is definitely entering a period of inflation. More Aggressive Policy. One of the most important changes is the attitude of the leaders in Wash ington and in the banking world to ard pressing problems. The do-noth- ing policy. which obtaiped throughout the greater part of 1931, has been re- placed by one of ageressiveness and a co-ordinated political and financial pro- gram to attack every weak point in the business and banking situation and surround it with the necessaty pro- tection. There is a very frank depart- ure in both the Treasury and Federal Reserve philosophy of banking from that which has recently prevailed. While it is admittedly the direction of mod- erate and temporary inflation. this is preferable to an endless period of de- flation and proceeds on the same prin- ciple adopted where pathological con- ditions are at issue—namely, that of arousing a dormant and debilitated pa- tient by gradually putting him to work. In this case it is credit and currency that need revitalizing. From a statis- tical standpoint the latter appears to be abundant. The amount of Federal Reserve notes in circulation in the past vear has increased about $1,200.000,000, or 80 per cent. But credit is more difficult to obtain today than it was last February. It is not being employed because its possessors withhold it from employment. The December statement of the New York City banks indicated that they had about a 50 per cent cover for deposits. Hoarding is not by any means confined to individuals. Probably the worst hoarders today are the banks. It is as necessary that the banks release credit for legitimate busi- ness purposes as that their former de- positors return currency from its hiding places. The method by which credit is to be enlarged under the revised bank- ing regulations is by permitting the re- discounting of paper not now eligible for that purpose. According to the language of the White House state- ment. the bill “will improve the facili- ties of access of the member banks to the Reserve banks, by providing for the advancement of funds by the Fed- eral Reserve banks to member banks that have no further eligible or accept- able paper, upon the security of sound assets not now technically eligible for discount.” This opens the door to processes in credit expansion that have been fought against by the framers of the Federal Reserve act, but which are entirely reasonable and legitimate in an emer- gency and are not to extend for over a period of one year. It annuls the much feared features of the Glass bill. The confusing question in the layman's mind is why the Reconstruction Corpo- ration, which was primarily set up to carry the banks through their crisis, has so soon found it necessary to give over this part of its work to another agency. France Withdraws Gold. There is a second phase of the mat- ter that cannot be overlooked. It has to do with the steady withdrawal of gold by France and the prospect that, during the next six or nine months she will repatriate practically all of the yellow metal now held here to her credit. Emphasis is placed on the in- crease in the amount of “free gold” permitted under the new act and on putting the Federal Reserve System in a strong position while this exodus is taking place. It is to be remembered that France has a national election in April and that every move she now makes openly, either political or finan- cial, has a bearing on the issues in- volved in this election. When it is gver there is likely to be a franker and " (Continued on B6cond Page.) 1 Classified Ads MORN NG, FEBRUARY 14, 1932, WITHDRAWN FROM CIRCULATION AW MILUE, HAVE A HEART! HOW CAN IGO TO WORK WHEN You¥E GOT HALF' MY C LOTHES LOCKED UP ? HONEST /1 Not cone OUT ON ANOTHER GAMBLUING 1 WANT TO GO 1o WORK SPREE. Wcl( A Ll NN N A & N N8 N NS S ) p’ ’ I} ) BILLION ANDAHALF OF OUR NORMAL BUSINESS EQUIPMENT BIG BANKS AND CORPORATIONS DECLARED UNWILLING HOARDERS Economist Points to Mounting Cash Bal-j MARKEIS_HIGHER ances as Important Factor in Increase of National Credit Strain. BY CLAUDE A. JAGGER, Associated Press Financial Editor. NEW YORK, February 13.—It is not only the poor man who hides his thin bank roll in his mattress, nor alone the rich man who stores away bundles of yellowbacks in his safe deposit box to Wwhom the stigma of “hoarder” attaches, says Dr. Warren M. Persons, prominent economist. “Our largest corporations and our strongest and most powerful banks.” he said in an interview today, “are also | hoarders—surely not willful hoarders, but hoarders in the sense that they are piling up huge balances of cash. They too, unwillingly, are choking off the energizing breath of trade.” Urges Anti-Hoarding Council. Dr. Persons urged the formation of a council of industrialists and bankers for the purpose of decreasing this hoerding and thus exerting pressure to- ward initiating business recovery. He saia the efforts of such a council would eftectively tie in with the administra- tion's reconstruction program. He felt that the work of the Recon- struction Finance Corporation and the proposed liberalizing of the Federal Re- serve system should check bank sus- pensions and go far toward restoring confidence, but expressed the opinion that “big business” must take aggres- sive action toward initiating a normal flow of credit. “We cannot sit back and wait for business recovery,” he said. “‘Business must start it.” “Industrialists have indicated to me," he continued. “that they can put $500,- 000,000 of prime commercial paper into the market within a very short time. Numerous leading industrialists have expressed their willingness to do every- thing possible to initiate business re- covery, but none of them feels inclined to put himself forward and call to- gether a group to suggest specific ac- tion. If, however, an important Gov- ernment official would ask them to co- operate. I am sure the Government would find a ready response and inval- uable aid.” Importance of Credit. In order to get a background to the present paralysis of credit, and conse- quently of business, he continued, the layman should realize the fundamental importance of the part played by credit in our everyday business transactions. “Money is but a small item in nor- mal times. Less than 10 per cent of ordinary business transactions are set- tled by hand money. We have some $50,000.000,000 in bank deposits and only about a tenth of that in outstand- ing currency. Bank deposits are about 90 per cent built up through credit. The banking system normally permits our huge volume of business, or inter- change of goods, to flow freely through mere bookkeeping iransactions, the bal- ancing off of credits and debits. But when we repudiate that time-tried sys- tem and begin to scramble for that 10 per cent of money, then the ma- chine stalls. “Qur large corporations. in self-de- fense, have been taking their deposits out of smaller banks and piling them up in the largest banks. The banks, in turn, have been refusing to make loans and have been selling securities to maintain unusual liquidity. “Now, if large corporations, many of which have huge bank balances, would leave their funds on deposit with banks in localities where they do busi- ness throughout the country, and pay for their purchases of materials with 60 and 90 day notes, which are in turn eligible for discounts at the banks and T ount at the Federal Reserve banks, where they may be used as backing for Federal Reserve currency, an important start would be made toward a resumption of the normal flow of credit. Once a start were made, there would be a steady flow into the banking system of these notes. Bankers® Position. “Bankers are only too anxious to get prime commercial paper of this char- tions. While corporations paying in notes rather than cash would pay higher interest on the notes than they receive on the money they would leave this difference as minor.” (Copyright, 1932.) 'WHOLESALE PRICES BECOMING STEADIER Index Line Has Now Flattened Out, According to Commerce Department. The world's wholesale commodity price curve line has flattened out, the Commerce Department announced yes- terday upon completing a survey in 19 countries. Of those under review, 7 saw wholesale commodity prices ad- vance, 10 countries registered declines and 2 reported conditions unchanged. The flattening out of the jaggered line started in November, the report said. Japan led the advancing countries with a rise of 7 per cent in the whole- sale price index as compared with the previous period. Finland was next with & jump of 6 per cent, followed by Nor- way, 2.5 per cent; Denmark, 1.7 per cent, and British India, 1 per cent. Netherlands led the declining coun- tries with a drop of 4.5 per cent. fol- lowed by Belgium. 1.9 per cent: Egy] and France, 1.1 per cent; Germany, 2.7 per cent, and Latvia, 1.3 per cent. Only fractional changes were noted in the indexes of Canada, Czechoslovakia, 1taiy, Sweden and the United Kingdom. In 1931 wholesale commodity prices averaged 17 per cent lower than in 1930, according to the report, in Brit- ish India and the Netherlands and 16.2 per cent and 143 per cent lower in Canada and Italy, respectively. Ap- proximate declines in eight other coun- tries were as follows: Peru, 1.7 per cent: Finland, 6.7 per cent; Sweden, 9 per cent; Czechoslovakia, 8.9 per cent; France, 9.8 per cent; Germany and Norway, 11 per cent, and the United Kingdom, 12.9 per cent. According to the figures of the Labor Department’s Bureau of Statistics. wholesale prices in the United States dropped approximately 16 per cent dur- ing the past year. Retail Sal.t;sifiold In Steady Trend During Past Week By the Associated Press. NEW YORK, February 13—Retail sales about held their own during the past week as compared with the pre- vious week, according to the weekly survey by the Fairchild publications. Aggregate sales for February to date are sharply below the corresponding period in 1831. The decrease in Feb- ruary to date is hardly as great as the decrease in January as compared with January. 1931 Retail sales in Metropolitan New York were again retarded by unfavor- able weather, although sales showed a fractional improvement as compared with the previous week. Apparel sales showed a slight gain during the week. Prices continued sharrly lower. Feb- ruary 2 index of retall prices shows a decrease of 2.5 per cent under January and 19.2 per cent as compared with oorpara~ ' January 3, 1931, L} | Hesitant Upturn in the banks. several industrialists who | have considered the plan have regarded | pond market ended the week with a INVESTMENT BOND Indicates Waiting Policy on Part of Buying Public. Special Dispatch to The Star. NEW YORK, February 13.—The much stronger tone than has been its| lot since the January recovery. At the | same time its hesitant upturn was ample evidence of the reluctance of investors, | individual and corporate, to take large | | market positions until such time as a| | of the Federal Reserve Bank system Chile, | §i<” operation, will act favorably on ap- | large blocks of bonds as in the past | and the investment list should thus more definite picture of what the Re- construction Finance Corporation is go- ing to achieve is presented. Before the Washington announce- | ment of the bill to extend the facilities | and unloose a flow of bank credits into industry, trading in the investment market had dropped to almost record low proportions. That it picked up sharply on Thursday, after the stimu- lating news from Washington, was en- couraging. U. S. Issues Gain Slowly. United States Government long-term bonds—which are usually the measure AR EAST BUSINESS FALLS OFF AS WAR THREATS CONTINUE Yangtze Valley Especially Af- fected by Hostilities in Vi- cinity of Shanghai. BRITAIN PINNING HOPES ON NEW TARIFF POLICY Decline in Purchasing Power Is Reducing French Internal Price Structure. Special Dispatch to The Star. NEW YORK, February 13.—Cable and radio dispatches to the Business Week give the following survey of busi- ness abroad for the week ending today Far East.—Prolonged activities at Shanghai are having a detrimental ef- fect on both Chinese and Japanese business and trade in the entire Yangtze valley is hampered. Foreign ships have not been prevented from entering or leaving the port. Chinese banks, closed when hostilities commenced, have re- opened to meet the usual heavy de- mands of the Chinese New Year season. In the Tientsin-Peiping area, trade has resumed something of its normal routine. In Manchuria, it is still v much below normal. Departm in Mukden showed a pic per cent in January over December. London.—Business in Britain, already the most optimistic in Eu is buoyed up by a new air of ex following the government's t T nouncement. Not even the rapid spread of import quotas and exchange re- strictions has dampened the we thusiasm. Announcement of plan had unexpectedly lit £ stock markets due to discountin; effects as long ago as when the tional government was elected with an overwhelming majority and pledged to a program of protection, Commeodity Prices Steady. Commodities also held steady. though iron and steel and textiles anticipate early beneficial effects Paris.—The continued steadiness. one can even say the strength, of the Bourse has not been affected by recent foreign developments or by unfavorable domes- tic conditions. It probably reflects the generally held domestic viewpoint that the depression is approaching the bot- tom Unemployment, neverthel creasing relentlessl; cators show no let s, 15 in- and other indi- traction he new British tariffs will accentuate the in- creasing French trade deficits. Not- withstanding the constantly enlarged protectionary measures, the -internal price structure, except on articles of first necessity, is crumbling as purchas- ing power diminishes. With the French Line on the verge of liguidation, a $4,= 000.000 government credit will probably be granted in order to keep the line going for the next half year, mean- while giving time for deveiopment. not only of a basis for some refinancing program, but for revision of the whole ship subsidy pelicy. The gold reserve of the Bank of France increased §108,000.000 in Janu- ary. not including the $73.000.000 of previously ear-marked gold which was brought to Paris from the United States. but ding gold newly ear- marked. The reserve has now reached a new record of $2.864.000.000. Berlin.—Germany is riding toward another major crisis. but this time & dczen other countries are traveling in the same direction. which fact is likely to force international action, and, soon to meet the present. impossible economic situation Financial Indicators. Strategic financiel indicators are awry. The gold reserve position of the Reichsbank is weaker. The net gold balance for January is down $15,000,~ of the market's confidence in any par- ticular advance—improved only nar- rowly and slowly, however, and this gave pause to those who believed many of the junior corporation bonds were on the bargain counter. Nevertheless Standard Statistics in- dex of 60 representative bonds recov- ered virtually all of the ground it had lost in the first three sessions of the week and in the case of the rails there were some notable recoveries, extending to 4 and 6 points. It is in the railroad situation that the | market holds the greatest hopes for what the Reconstruction Finance Cor- poration and the liberalized credit scheme can do. The prime issue in this situation is the prevention of re- ceiverships among the carriers, for the bonds of more than 100 roads are cur- rently selling at receivership levels. However, Wall Street confidently ex- pects that the reconstruction organiza- tion, especially in the first months of plications from carriers that have been approved by the Interstate Commerce Commission. The aid they will thus receive, together with the reduction in wages for the next year and higher freight rates. should go far toward en- abling the roads to make a better show- ing in 1932. So far as the security markets are concerned the greatest benefit in the | immediate future is likely to come through the aid the Reconstruction Corporation will extend to banks and other financial organizations with sound assets to hypothecate. These institu- tions will not be forced to dispose of gain real relief. Money Rates. _The other factor that must be con- sidered in the investment market is the slow and careful paring of money rates, evidenced by the Dallas Reserve Bank’s cut in its rediscount rate to 3!, per cent. This occurred at a time when both New York and London maintained their rates in the face of a good body of market opinion that lower rates could be effective. There is no_evidence of haste on the part of the Federal authorities to force the money market lower immediately, but undoubtedly the long-term outlook is for cheaper money. Since cheaper money usually means higher bond prices, and higher bond prices are usually complementary to lower commodity prices, this should serve to offset the mildly inflationary nature of the Government's emergency program. It is not unreasonable to look for a broadly higher bond market within the next two months, but the | slower its pace the more permansnt will be its impr-vement. (Copyright. 1932 00 Even with all the restrictions, which seemed watertight when decreed, the government still is not successfully collecting the amounts of foreign ex- change due from payment for German exports. Industrial activities are de- clining rapidly, due especially to the falling off of export orders. The coal and steel industries are showing in- creasingly less resistance to depression. CREDIT AID PLAN WATCHED. British Are Interested in . S. Move to Aid Business. Special Cable to The Star LONDON. February 13.—There is a keen interest in the American credit expansion plans, which are favorably regarded here. though their reception on the Continent apparently is dubious, as shown by today’s sales of dollars in this market by Paris and Amsterdam. The tariff bill list of exemptions on raw materials is better than the worst fears, but real objection remains to the institution of tariff-building machinery capable of erecting in a few months a high protective superstructure from the general 10 per cent basis. Money this week end is easier at 41; per cent. but today’s treasuries were al- Iotted at 4 13-16. compared with 4 5-16 a week ago, the market interpreting the deflationary decline in the Bank of England’s portfolio to mean that Gover- nor Norman has decided to reinforce the existing bank rate by stringent de- pletion of market resources, The firm opening of the stock mar- ket in New York yvesterday improved sentiment here appreciably before yes- terday's close, and today there was a much firmer tone, unaccompanied, how- ever, by an increase in the volume of business. Gilt-edge securities were bet- ter on cautious foreign buying, espe- cially by Paris. Germans were higher on the Anglo-French report. Japanese and Chinese bonds had a point re- covery. Industrials were harder, though the details on the import duties bill had no effect. There was continuing firm- ness in oils, but weakness in tea shares on the great disappointment at the in- clusion of this commodity on the free import list. (Copyright, 1932.) & boiling market today. Hanover, 143, up 4: Chase National, 39, | 531, up 3%; Commercial, 155, up 13; Ex First National, 1640, up 120; Guaranty, For the first time in the hi‘iory of Oxford, Engl:nd, a woman, Miss Tawney, presided at & recent meeting of the Gify Caunetl. NEW YORK, February 13 ( 1). —Bank and trust shares rose n Bankers' Trust, at 62';, was x LicH Brooklyn Trust, 235, up 20 1 up 2':: Chatham-Phenix, 21%, up 13; | Chemical, 333,, up 1'2; National City, ! Continental. ‘16, up 1%; Comn change, 65, up 2: Empire. 25, up 11;; 303, up 15; Irving, 20, up 4: Man- Hattan, 38, up 1l4; Manufacturers’, 32. up 1; New York Trust. 83 up 5%: Public, 36, 2%, and Title Guarantes & Trust, 61%, 49 M ¢ ]