Evening Star Newspaper, April 10, 1932, Page 57

News of Markets Pages 1 to 4 Part 6—12 Pages LARGE ATTENDANCE SEEN AT CONCLAVE OF LOGAL BANKERS Tuesday’s Spring Meeting Will Draw Nearly 250 Finan- ciers to Country Club. JUNE CONVENTION PLANS PUSHED BY CHAIRMEN! Delegation at Hot Springs to Settle Details—Murphy Chairman of Kreuger Committee. BY EDWARD C. STONE. More than 230 Washington bankers and guests will attend the annuali Spring conclave and dinner at the Co- lumbia Country Club Tuesday evening, according to Lanier P. McLachlen, pres- ident of the McLachlen Bank and chairman of the dinner committee. It s believed this will be & record attend- ance for one of these Spring gather- ings of local financiers. Practically all the senior bank officers and many bank directors will be present. All the invited guests but one have accepted the summons. Another record. Thomas W. Brahany, chairman of the entertainment committee, has ar- ranged an unusually interesting pro- gram. The guest speaker will be Dr. Robert Thompson of the National Edu- cational Institute, New York, who is an author, newspaper correspondent and lecturer. Perhaps the record at- tendance has been drawn by his sub- Ject, “Looking Twelve Months Ahead.” In addition to telling what is going to happen in the next year, Dr. Thomp- son will present word pictures of some of the great men in finance whom he has met. Chairman Brahany has also provided other special features. The usual golf tournament will take place during the afternoon, with awarding of the prizes during the difmer. Another program feature will be a detailed announce- ment regarding plans for the coming annual convention of the District Bankers' Association at Hot Springs, Va., in June. D. C. Bankers at Hot Springs. Claude H. Woodward, chairman of the general committee arranging for the 14th anntal conclave of the Dis- | trict Bankers' Association, and other local bankers are spending the week end at The Homestead, Hot Springs, in order to make complete arrange- ments for the many-sided activities for | the coming parley, expected to be one of the most important yet held. Pro- visions are being made for transporta- tion of the delegates, their housing, the business sessions, entertainment, sports and sightseeing trips. Hot Springs was selected again this| year for the meeting place because of | the resort's gzpullrny among a major- ity of local bankers, its seclusion, ideal setting for the business session and | outdoor surroundings, which lend them- selves so well to the recreative side of the occasion. Accompanying Mr. Woodward are C. 'H. Pope, acting president of the bankers' association and vice president Munsey ‘Trust Co.; George O. Vass, first vice president of the association and vice resident and cashier, Riggs National ank; Frederick H. Cox, chairman ‘Transportation Committe and cashier, Commercial National Bank; Thomas J. Groom, chairman Hotel Committee and vice president, Bank of Commerce and Savings; Charles H. Doing, chairman | Program Committee and vice president, | ‘Washington Loan & Trust Co.; Barnum L. Colton, chairman Entertainment Committee and trust officer, District National Bank: Robert H. Lacey, vice chairman Sports Committee and \'iCE‘ gesldem. Columbia National Bank; W . Spaid of W. B. Hibbs & Co., Robert S. Stuntz, vice president. Park Savings Bank; R. F. Garrity of the same bank and Nathaniel Mountford, director, Munsey Trust Co. Exchange Trading Quiet. Stock of the Bank of Commerce & Bavings sold in a small amount on the | Washington Stock Exchange yesterday | at §325 a share, the same price as the | last previous sale. i In the bond division, Washington | Gas_Light 6s, series A, figured in five small transfers, all made at 997%. When the unlisted securities were called off, the bid price on National| Press Building first 51,5 was reduced | to 33, the bid on Chapin Sacks 8 per cent preferred stock was raised to 101, and 80 was asked for Park Savings Bank stock. Capital Traction, which has been quite active during the past few days | in small-lot sales, closed yesterday at 17'; bld and 19 asked, but no sales. Several local corporations paid divi- | dends during the week Sales of the Western Electric Co. in| 1931 amounted to $228,956,000 This was 367 per cent less than the sales for 1930 Earnings declined 234 per cent last year, as compared with the previous year. Lost-time accidents were materially reduced and thrift substantially in- creased among the 44.613 employes of the company last year. Since 1924 President Edgar S. Bloom reports to stockholders, accidents have been re- duced from' 63 for each to less than four in 1931 1,000 people Will Preside A. B. A. HEAD TO ATTEN] SPRING MEET. HARRY J. HAAS Will call the Sprl?g meeting of the executive council of the bankers' na- tional organization to order at White Sulphur Springs, W. Va., on April 25. Several local financiers will attend. The sessions will be compressed into three days this year, but the reports are ex- pected to be of greater importance than | usual because of present financial con- ditions. IVESTHENT BOKD PRCES IRREGLAR U. S. Group Gains During Week, but Corporation Issues Decline. Special Dispatch to The Star. NEW YORK, April 9—Two years and & half after the crash on the stock exchagige—after a period of liquidation and ation unparalleled in economic history—the investment market this week pursued more emphatically than ever two widely divergent paths. United States Government and prime municipals—descriptions that give the maximum in safety and offer an escape from increased taxes—pushed ahead to new high prices for 1932, while cor- poration bonds, no matter what their grade, were sacrificed at the lcwest prices that have prevailed in this group since war days, Standard Statistics’ index of 60 rep- resentative bond issues was forced under the low of last December, with scarcely a pause at what has long been consid- ered a definite level at which important support would be met. As a matter of fact volume was not large and the ease with which the corperation list de- clined was chiefly due to the almost entire absence of bids from the market. In the face of this pressure from forced selling, Governments and munic- ipals did not hesitate on their up- ward path. Liberty and Treasury loans | were all marked up to new highs for the year. But the popularity of these bonds, which are only tax-exempt to| an individual to the extent of $5,000 of | income, was small compared to the de- mand for municipals, which are entirely tax-exempt. The market had confidently expected that the New York Federal Reserve Bank rediscount rate would be reduced, as bill raves and time money have for some weeks been out of line with the rediscount rate of 3 per cent. The obvious determination of the Treasury authorities keep Government bonds at high levels was taken as assurance of a continued cheap money market, and a lower rediscount rate would be a logical development in this direction. ‘The New York ratc was not cut, nor did the Hank of England reduce its rate, which is also out of line with the Lombard Street Money Market However, the Federal Reserve added Government securities, and at the week a result of liguidation of stocks, there was heavy purchasing of Treasuries and Liberties by these institutions. On Fri- day the surplus funds of the large com- mercial banks were going begging, and the bankers were publicly admitting their inability to find “safe borrowers.” Such a situation naturally resulted in pushing Governments and municipals up to levels at which their yields, for the first time since the Fall of 1930, approximated the income to be derived from funds in the money market. (Copyright, 1932.) FARM PRICES TREND [ Downward Move in Several Whole- sale Charges Also Shows Recent Check. Special Dispatch to The Star The Western Electric Co. is the sup- plier of telephone e Chesapeake & Potomac operating in Ma Telephone Co., nd. Virginia, West | Virginia and the District of Columbia, | wholesale prices are the most important ' and other associated ccmpanies of the Bell System | Thrift during the year increased with 135 per cent of the company's pay roll, or $12,630,000, applied to this pur- | pose as compared with 11.9 per cent of the pay roll Heads Kreuger Committee. Word was received at the local office yesterday that Grayson M. P. Murphy, head of the New rk Stock Exchange house by that name, has been made chairman of the Kreuger & Toll Deben- ture Protective Committee. He was urged to take the chairmanship by sev- eral Gotham bankers, The committee faces a long and im- portant task in trying to untangle the complicated financial status of the late Swedish match king and his immense corporation, in order to save as much as possible for the debenture holders. Following Kreuger's suicide in Paris, all the Kreuger & Toll bonds and stocks took a sharp drop, because of the un- certain position of the company's af- fairs. Quite a little of the stock was held in Washington at the time of Kreuger's death and some holders are still carry- ing it. It was quoted on the London Exchange the of day at zero. On the New York Stock Exchange yester- day the stock sold at % and % cents @ share. It is the bond situation, however, to OTTAWA, April 9.—A decided upward pment for the | trend in wholesale prices for farm prod- ucts in March and a marked slowing up in the downward trend of several factors in the improving economic con- dition of Canada, according to a re- port of the Dominion Bureau of Sta- tistics. Continued activity in the radio in- | dustry as indicated by the increasing | number of new radio licenses, increased purchases of Canadian-made footwear and rising production of automobiles nd trucks and leading minerals are other favorable factors noted in gov- | ernment statistics during the last week. “Industrial operations measured by production indices showed moderate improvement in February compared | with the rrecedmg month,” reports the Bureau of Statistics. “A slight better- ment in the primary iron and steel in- dustry, a more than normal seasonal Igain in the production of automobiles, a strengthening of demand in external markets for Canadian lumber and in- creased imports of cruds rubber and raw cotton for use in Canadian indus- | tries are among the component factors responsible for this improvement.” Factory Pay Roll Increased. MARTINSBURG, W. Va. April (Special) —Heavy demand for a par- ticular type of men's hose here forced Interwoven Mills, Inc., manu- Tacturers, to place two eight-hour shifts on machines cing type, it was said today. At the same time a num- ber of machines are being replaced by hugely to its holdings of United States | end, with banks calling market loans s | JUMP IN CANADA |: FINANCIAL AND CLASSIFIED Che Sunday Star WASHINGTON, D. @, SUNDAY MORNING, APRIL 10, 1932. SECURITY MARKETS AT W LOW AR INWEEKS TADI Deferred Hopes of Revival in Business Cause Dis- couraged Selling. VALUES ARE SACRIFICED IN URGENT LIQUIDATION Kreuger and Insull Situations and Confusion Over Taxes Becloud Outlook. BY CHARLES F. SPEARE. | Special Dispatch to The Star NEW YORK, April 9.—It is useless to conceal the seriousness of conditions reflected in the most demoralized week in securities since last December. What they indicate is a loss of confidence on the part of investors and the deferred hope of business men in a rev in industry. Liquidation has been on an ascending scale as to volume, with an utter lack of recognition of the sound values of many common and preferred stocks and bonds thac have been thrown into the market. Even after a shrinkage from the 1929 levels in all listed stocks of between 80 and 85 per cent, it has been difficult to prevent holders from turn- ing them into cash or into Govern- ment obligations. Fortunately there is no banking crisis as there was a few months ago to aggravate the mood of despondency 50 widespread. While the statements of those institutions that made their reports for the March quarter show a substantial loss in deposits, when com- pared to the end of December, there is no indicated decrease in their surplus item, and in some instances an increase in their undivided profits. The Recon- struction Corporation has been success- ful in stabilizing the banking pasition and in quieting the fears of depositors. It has not yet, however, accomplished as much in the way of improving senti- ment toward railroad securities. It has a fresh problem in furnishing aid to those real estate companies that have issued large amounts of guaranteed mortgages. Factors in Unsettlement. The changed mood in Wall Street and of the investing public in the past month is due to three separate circum- stances. The first of these, and the one that has been most responsible for | a loss of confidence, was the suicide of Ivar Kreuger and the disclosures that have followed, involving a huge mass of securities in which Americans had invested and whose value today is questionable. This has been the great- est single shock the market has re- ceived during two and one-half years of declining prices. Nearly equal to it, in its effect on the public, has been the rapid dis- integration in the issues of the so- called Insull group. as illustrated by a decline in the stock of an investment trust associated with this name from about $150 a share to a few cents, To this latter situation may be charged a great deal of the loss of faith among investors in the shares of other pub- lic utility holding companies, as exem- plified in the collapse of prices in near- v all of the members of the Electric Bond & Share group, in spite of the known fact that the earnings on both its holding and operating company stocks and bonds are ample to pay in- terest and dividends and that there are no insurmountable financial problems facing these managements. The fact that the consumption of electric power is receding at a more rapid pace than | few months ago is of much less con- ic(‘rn to the holder of public utilify securities than that pyramided struc- tures, based on strong operating: prop- erties, but tapered off with combina- tons of little merit, have begun to topple. Taxable Securities Sold. The second stage for the turnabout | in the markets is the departure by Con- gress from a co-ordinated and non- partisan body, which met the emergency in banking world last Winter and qui passed the Reconstruction Finance Corporation and Glass-Steagall bills, to one that was disorganized and leaderless during the debate on the ales ta This alarmed the capitalistic elements here and abroad. It suggested two things: One, that the Government budget would not be balanced, and that, therefore, the United States might go off the gold basis; the other that, if surtaxes were to be imposed, the t policy would be to liquidate taxable securities and reinvest in Federal ob- those of municipalities that This has been done to erable extent latest phase of alarm over the s of Congress is that in which trument of a pro- le Street has beaten y and spread the uency. Figures is week to show more times than breast alarm among its c presented graphically how ma the total tax to be raised to cover the deficit is the loss in the value of securi- Ues since the stock tax was first pro- This will 1ot impress many out- the ranks of the pre ts who have compiled them, © PR Trade Statos T nsatisfactory. Th~ third influence in dispelling the confidence that had been generated by control of t ing crisis, and the intimations t there would be no more negative the failure of business to improve after the various welghts bad been lifted from the finan- cial structure and greater credit facil- fties had been ded through the Glass-Steagall Without _doubt, much of the discouragement and loss of confidence created by the Kreuger and the Insull situations and by the confusion over taxes would be modified were there indications of even a sea- sonal revival in industry. This, how- ever. is not in sight, Rl?l” of the heavy road car loadings, which ex| d slightly during the- ¢old \2u:hs:n?::t month, have again lapsed back into the contracting phase that has pre- valled for over two years. Even in the automobile industry significant postponement from week te week of contracts for materials. One of the largest of the national distribu- trades are dull. there is &/ tors showed a loss of 20 per cent in its March turnover. While the commodity index varies little from month to month, it does not encourage the con- sumer to buy. His timidity is increased by the reluctance with which the bank- has | &F: Whose policy is still one of maxi- mum liquidity, consi for a loan. S i Because of the delay in business fe- covery, more corporations and institu- | past tions are adopting the policy of con- This is which the new protective committee others which will turn out the heavily- S€rVing their cash resources. demanded will devote its energies. 3 (Continued on Third Page.) THE SECRET OF SUCCESS IS NOT HARD TO FIN 'l mlm;rr }‘J]n, i I”n“' T nnj@lll}}fl!lfi!l}mfllh T Il[[llfl UL T Ui, ] anq“ [Ty Lk |11} “hflm w;’,pm;"uumln \ d muihn U n hn“fl‘llrh‘l \ H A ‘lr ldllfllfllmll - BUT, OH BoY? AFTER, YOU GET IT LOOK QUT / Q W R " S ) WE WANT ;“f > \‘1 BANK REFORM IDEA LIKELY T0 SPREAD Private Institutions May Get Attention as Result of Study in Congress. BY CHAS. P. SHAEFFER, Associated Press Financlal Writer Rehabilitation of the banking struc- ture of the United States now under way in Congress is expected in Govern- ment circles to be the forerunner of a | the lending charges on certain active | of its work and now hopes for steady movement to subject bank organization to rigid tests. Much criticism has been leveled at incompetent banking practices, which Controller of the Currency J. W. Pole declares to be in no slight measure re- sponsible for bank failures. In like measure, many rumblings are heard in substantial business and financial cir- cles that the matter of private banking administration is a subject that might well be gone into for the economic health of the country as a whole Among the latest of these are four suggestions advanced to the Wharton School of Finance and Commerce at the University of Pennsylvania by Col. Louis J. Kolb, vice president of one of Philadelphia’s largest bankmg institu- tions. In the first place, he suggested bank- ing should be a professionalized busi- ness wherein those occupying positions of responsibility should be compelled either by such institutions as the Amer- ican Bankers' banking authorities, their knowledge of sound banking theory and practice before being al- lowed to occupy positions of responsi- bility. Secondly, he suggested the functions of banking institutions be redefined, so that the commercial banking depart- ment of a banking tnsmunur‘\l will L;n- gage primarily and practically exclu- sively In commercial banking, and the savings department of a commercial bank should segregate its assets from | the commercial department, and should really treat the deposits therein as sav- ings deposits, requiring notice on the part of the depositor before he can withdraw his deposit. In the third instance, he suggested that all banks should be compelled to join the Federal Reserve system, so | that there would be a greater unity of action on the nart of our banking sys- tem. Lastly, he said the question of branch | banking should be studied intelligently, | and branch banking be encouraged | wherever communities are suffering from a lack of banking facilities because | they are too small to afford a sound banking institution, but where a small | branch of a larger neighboring institu- | tion could function profitably. OFFICE SAFES GIFTS IN BERLIN STREETS By Cable to The Stor. BERLIN, April 9—Office safes are now being given away in Germany, and anybody can have them by paying the cost of transportation. In fact, if one is lucky, he may find a safe in the street. This remarkable fact, which speaks volumes for the German situation, is | literally true. Since the end of last year, 12 large office safes have been removed by the police from public high- ways, where they had been thrown by | their owners, who had gone bankrupt. 151 NEW YORK, April 9 (#) —New | by the Stock Exchange, the shorts per- | Association or by the| to demonstrate | Short Interest Grows, Despite Fight on Bears Special Dispatch to The Star. NEW YORK, April 9.—Despite the | power of a large body of public opin- jon and in spite of restrictions imposed sist. After a year of close supervision and mild discipline, the short position is still active and—considering the lev- | els to which the market has fallen—as powerful as ever. A week ago the shorts received their hardest test when the exchange gave the trading public the opportunity to | say whether they believed short sell- ing to be destructive of values. The | answer, in the form of customers' per- | mission of brokers to lend stocks, was | “No.” Except for a brief increase in | stocks, the change in the lending prac- | tice was effected smoothly. | On November 12, 1929, the day be- | fore the big crash, the short position amounted to about 1,700,000 shares. To- day it amounts to about 3,279,000 shares. Shares today are worth only a third of what they were valued at in the November, 1929, low (Copyright. 17 'SHARP WHEAT CROP REDUCTION IS SEEN| | 98,500,000-Bushel Yield Predicted for Kansas Winter Belt by Official Observers. ) | By the Associated Press. | TOPEKA, Aprii 9—A 98 500,000~ | bushel Kansas Winter wheat crop this year—only slightly more than two- fifths of the State’s record preduction of 239.742,000 bushels in 1931 — was officially forecast today on the basis of April condition. The indicated vield for this year | would give the country's chief wheat- producing State its smallest crop since 1925. It compares with 166,185,000 bushels produced in 1930 and 148,018,- 000 bushels in 1929. Condition of the crop on April 1 was rated 64 per cent of normal—the low- est since 1925. While the Federal and State Agri- | culture Departments reported the full extent of abandonment because of Winter killing, high winds and other causes was not known at this time, they said correspondents estimated ap- proximately 20 per cent of the acreage wn last Fall would not be harvested. Farm stocks of wheat on April 1 were estimated at 40.778,000 bushels | compared with 55170000 bushels on | March 1 this year and 15,003,000 bushels on Avril 1, 1931, GENERAL FOODS ADOPTS . NEW PRODUCTION PLAN | Special Dispatch to The Star. NEW YORK, April 9—A new plan permitting closer production control, which involves the company's 18 prin- | cipal plants and the creation of two | important new manufacturing positions, is announced by Austin S. Igleheart, | vice president in charge of production, General Foods Corporation. | _Under the new arrangement R. R. | Central and South America. AVIATION INDUSTRY HOPES FOR GAINS Pioneering Work of Various Companies Is Now Be- lieved Completed. BY FRANK H. McCONNELL, Associated Press Financial Writer. NEW YORK, April 9—Leading avia- tion executives report that the indus- try has completed a pioneering stage vrogress in commercial development. | The two-year ordeal of business dull- | ness, they say, has touched the financial fiber of those companies which survived and has helped, rather than harmed, in | the necessary work of hewing down costs to actual needs. Waste is now at a minimum. Four of the five largest groups in the aviation business ¢id substantially bet- ter in 1931 than they did in 1930. Tak- ing them as a unit, it can be said that the industry reduced its previous losses by millions of dollars and, in the case of United Aircraft Co. showed a sub- stantial net profit for the year. Aviation Corporation of Delaware, which controls the American Airways System, reported after writing off a $2,022,000 loss on sale of securities, a deficit of $3,205,000 against one of $4,- 703,000 the year before. Transconti- nental Air Transport, Inc,, which con- trols the Maddux Air Lines and Western Air, reported net loss of $90.000 against a loss of $895,000 the year before. Cur- tiss-Wright Corporation reported net loss of $4,126,000, or less than half its 1930 less of $9,012,000 Pan-American Airways and its sub- sidiary companies operating in the Latin American field, reported net in- come of $105,000 against a deficit of $305,000 the year before, marking the first time in its history that the system had returned a profit. United Aircraft came through the year showing net income of $2,907,000 against $3,302,000 the year before. These figures show that the four companies went through 1931 with a combined net loss of $4,409,000, which compares with a combined net loss of $11,613,000 the year before. American companies operating In this country now have over 40,000 miles or regular air routes and the Pan- American Airways Co., which represents a joint effort of the American indus- try to concentrate its activities in the foreign field now operates over 20,000 air miles, linking North America with This com- pany is now working on the project of tying the United States to Europe via a commercial air route. NEW ENGLAND SHOWS BUSINESS ADVANCE | following plan is herewith submitted. Manufacturing Plants More Active With Increase in Building Contracts. | Thomson, who has been in charge of several manufacturing operations in the | West, with the title of general super- intendent, will continue with the same responsibility as manager of eight West- | ern plants, one of the newly created offices. Udell C. Young, New York, who has been neral superintendent of the Maxwell House Coffee division, becomes manager of leading Eastern plants. State and municipal financing sched- uled for next week by 37 muncipali- ties totals only $5,906,685, as com- pared with $45589,223 during the week, according to the Daily Bond Buyer. The weekly average of new bond offerings for the year to date is flzu‘,m. . Stock Exchange Seat $80,000. NEW YORK, April 9 (/).—Arrange: ments were made today for salé of a New York Stock Exchange membership | at $80,000. This was $1,000 under the previous transaction and & new low Special Dispateh to TheStar. BOSTON, April 9.—For the second consecutivé month this year, conditions in New England improved more than seasonally ‘over the previous month, according to the March Summary of New England Business just released by the National Shawmut B nk. The bank reports that not cnlv were the New England manufacturing plants more active in ary but the number of wege was' lerger in Massachu-~ setts manufactories’ and average weekly ea 25 mge #arner also increased slightly. WAS more than a sea-: sonal_in in the value of building contracts:. ed in New England in February, 2 Pages 5 to Classified Ads 12 DEBT SETTLEMENT BY LATIN AMERICA IS DECLARED VITAL Economist Presents Plan for Payments Based on Pres- ent Financial Status. EXCHANGE OF SECURITIES FOR NEW LOAN IS URGED Clearing Up of Defaults and Re- sumption of Services Would Be Assured. BY DR. MAX WINKLER. Special Dispatch to The Star. NEW YORK, April 9.—Latin Ameri- | | ca continues to be misunderstood. Anglo-Saxons almost always have looked upon the republics south of the | Rio Grande with a certain feeling of supertority. i Nothing has been more distasteful than this to these Latin American countries, which, like the rest of the world, find themselves in the midst of a crisis, the like of which they have never witnessed before. Their plight is rendered even worse by propaganda malevolently spread, or by the sudden | rise of friends and allies who, beyond handing out platitudes, do nothing on behalf of Latin Americans. For the time being their credit is gone. They were permitted to accumu- | late a debt far beyond their capacity to meet unless commodity prices again reach absurdly inflated levels. Even then, it would be difficult for some of the nations to meet obligations in ac- cordance with the terms of the provi- sions of original contracts. Why Latin Americans were permitted to overborrow, or why they were in- duced to pawn with feverish haste all their assets, the bankers may be able to tell. Holders of Latin American bonds are entitled to know. What do they learn? Committees inform them calmly to retain their bonds and not to sacrifice them. What splendid ad- vice after bonds have reached levels where they represent hardly more than souvenir value! Loans Were Large. American bankers are partly to Llame. If there are among them such experts as can tell in advance what cne may do with securities, why did they remain silent when millions, tens and hundreds of millions of dollars, were poured into Latin America? Why did they remain silent when they saw these bankers permitting Peru to bor- Tow in two years, two and half times | T as much as the republic had borrowed in London within 68 Why & o#‘. sllent when Bolivia was , i 11 years more than three times as much as Bolivia could borrow in Great Britain and France over a period of 41 years? Is there any won- der that these two republics are hope- lessly insolvent? Latin Americans never have been, or at least rarely, willful repudiators of contractual obligations. They have as high a regard for contract debts as| their Angio-Saxon friends. They have, | however, the misfortune of succumbing more readily to the pretense that, in extending loans and credits, only the | welfare of Latin America is what the| lenders are aiming at. Fundamentally honest, they accept at face value what- ever is laid before them. Herein lies the tragedy of the southern half of the Western Hemisphere and of 110,000,000 people who, too, have desires and ambitions like unto their more powerful brethren north of the Rio Grande. The stigma of default must at all cost be removed from these nations. This must be done speedily. It must be done by those who are partly responsible for the present state of | affairs. The task is a hard one, but the results should make worth while whatever labors it may entail. The It is somewhat along the lines proposed oy the writer in the course of an address last Summer at the Institute of Politics of Williamstown. Plan Is Suggested. Latin America’s creditors must face conditions and not theories. It is not a question of what America’s southern | neighbors must pay, but what they can pay today. Each country represents a problem in itself. A careful examination should, therefore, be made as to the amount which each government could | pay and transfer annually, without any indue hardship. Assuming the country in question is in default with respect to an external debt totaling $100,000,000—assuming further that the nation could create for debt service $1,000,000 yearly—this is 5 | per cent on $20,000,000. Let this sum constitute the total debt of the republic, into which would be exchanged existing wbligations. Special consideration might be given to bonds enjoying the benefit of specific security and guarantees. These would have to be waived in favor of the new loan. For the balance of the debt, let there be issued income bonds, bearing interest on a graduating scale, begining 4t one-half of 1 per cent and rising to a maximum of 5 per cent. The amount of interest to be paid will be determined by a so-called pro: perity index, to be constructed by who- ever will be charged with working out the above problems. In each case a genuine representative of the country in question should participate in the discussions and the working out of the plans Debt service could then immediately be resumed, the default cleared up, the stigma of repudiation removed, the credit restored, and each country in turn could once again enter the so- ciety of nations. Thus, and thus alone, will the United States be able to de- rive all the advantages from its con- tact with the southern republics, at the same time enabling the latter to regain the position in the world which is fully warranted by their resources and the industry of their people. (Copyright. 1932. by the North American Newzpaper Alliance, Inc.) DOLLAR BUYS MORE P!OW THAN IN 1926 The investor's dollar today buys 125 per cent more asests, 132.5 per cent more surplus and 17.6 per cent more earnings than in 1926, according to an analysis of 30 high-grade common | stocks made by the Administrative & Research Corporation, New York. A comparison of the above figures with the investment purchasing power of the dollar in 1929 shows that at IBRITAIN MAINTAINS OPTIMISTIC VIEWS ON TRADE OUTLOOK German Conditions Reflect Continued Business De- cline on Continent. BELATED SPRING UPTURN IS REPORTED IN FRANCE National Deficit of $600,000,000 by 1934 Now Seems Likely, However. Special Dispatch to The Star NEW YORK, April 9—Cable and radio dispatches to the Business Week glve the following survey of business abroad for the week ending today London.—The business tone in Britain is still good, but the prebudget lull is bound to affect volume during the first weeks of April Domestic factors support recent op- Umism. The London Stock Exchange is confident and buoyant, and there is still a deal of optimism over the budget surplus. A further change in the bank rate is anticipated at an early date. The present level of 3% per cent is at least 1 per cent too high for the market relationship. The vagaries of sterling continue to occupy the business mind. Profit-tak- ing and slackening in the flight from the dollar have sporadically checked the fise of the pound, but the upward trend is expected to continue Budget Action Watched. Commodities have reacted to sterling, the depreciation being a serious matter for shippers and merchants, with fears that dealers might cancel orders. Wash- ington is regarded as the key, and Lon- don is as keenly interested in the United States budget as America her- self. A solution to the Congress dead- lock is expected to result in a relapse in sterling without further official in- tervention. Berlin.—The progress of disintegra- tion which is evident in most oountg:ln on the continent is reflected in Ger- many. Domestic industrial production has contracted further, and the prospect of declining foreign demand is most discouraging. The Boerse is depressed. Money is easier following quarter-end payments. The private discount rate is down 2 per cent, Industry is urging the government to open negotiations with foreign long- term creditors to set up a standstill on the long-term obligations similar to that arranged by the Wiggin Commit- tee for short-term interests last Decem- . _Germany is inevitably approach- l’f‘ a ml;:plete transfer L oW soon it may come may well be sur- mised after the March trade returns are known. There were two cheering develop- ments during the week. Industry re- ceived a share of the big pipe order from the Iraq Petroleum Co. which is now going ahead with plans to pipe the famed Mosul ofl to the Mediter- ranean. Exporters saw the first peace ray in the almost universal tariff war in the announcement that Germany and Poland had reached a new trade agreement restoring the foreign trade of the two countries to the December status quo. Paris.—Last week’s feeble signs of a belated Spring revival continued this week. There was another slight decline in unemployment, and some fresh im- provement in the textile and metallur- gical industries. Construction showed slight improvement; rail receipts vere up. Business Anxiety. Business, however, is showing distinct anxiety as to the future. It is now taken for granted that the present ma- jority in the government will be swept away at the forthcoming elections, set now for May 1, and that a Socialist- Liberal coalition will dominate the f; ture Chamber. The treasury is well- nigh empty, the budget situation is serious. According to authoritative re- ports, the 1930-31 budget will show a final deficic of $80,000,000. The current 1931-32 budget, one of $100,000,000 to $120,000,000, and the 1932 budget bill has here «nd now an actual deficit of &t least $120,000,000. By 1934 it séems France inevitably will face a national deficit of at least $600,000,000. The “exchange compensation surtax" of 15 per cent ad valorem has been extended to apply to Japan, despite the latter's protests, due to the deprecia- tion of the yen. is would tend to deny the opinion tfiat Franco-Japanese relations are extremely close. BRITISH WELCOME MELLON, New United States Envoy’s Counsel Will Be Sought. BY LEONARD J. REID. Associate Editor of the London Econcmist cial Cable to The Star SD;D April 9.—The financial district welcomes the arrival here of Andrew W. Mellon, American Ambassa- dor, whose fnancial experience and prestige opportunely are reinforcing the ranks of London’s diplomacy at a criti- cal juncture Though failure of the four-power conference this week means that the problem of Southeastern Europe is complicated by French versus German and Italian antagonisms and that the prospect of the new deliberations at Geneva is not so promising, the real obstacle to recovery is the unwilling- ness of all countries to accept the necessity of painful readjustments. Copyright, 1932 UNFILLED U. S. STEEL ORDERS SHOW DROP Decrease of 73,216 Tons, Revealed for March, Is New Low Record. By the Associated Press NEW YORK, April 9—Unfilled orders of the United States Steel Cor- poration decreased 73,216 tons in March to a total of 2,472,413 tons, a record low since the corporation has been report- ing monthly fgures. In February there was a decline of 102,521 tons, Few attempts to estimate the shrink- ag: had been made, although some forecasters believed the backlog would fall to around 2,400,000 Steel operations were disa iting last month for the industry falled to ex- perience a seasonal gain. In March, 1931, the steel corpora- year end prices. a dollar would pur- chase 79 cent in assets, 90.2 per cent iIn surplus and 90 per cent earn- has been ings, as compared with 1926. tion’s unfilled tonnage rose 30,136 t6 3,995,330, but ‘i’:u that: month an_uninterrupted decline the figures,