Evening Star Newspaper, June 19, 1932, Page 55

News of Markets Pages 1 to 4 Part 6—12 Pages FINANCIAL AND CLASSIFIED - Che Sunday Sta Classified Ads Pages S to 12 W SHINGTON, D. (., SUNDAY MORNING, JUNE 19, 19 32, GLASS BANK BILL ANALYSIS IS MADE ATD.C CONELAVE Federal Aid to Depositors Will Not Prevent Losses, Lawyer Says. LAUDS BRANCH AND GROUP PROVISIONS IN MEASURE Removal of Officials Disregarding Sound Financial Practices Is Also Held Wise Step. BY EDWARD C. STONE. In a comprehensive discussion of the merits and demerits of the Glass bank- | ing bill, which he balieves will be en- acted into law in the not distant future, Charles W. Collins, authority on bank- ing law, pictured before the District Bankers' Association at Hot Springs seven fundamental principles co in the bill, as follows: (1) The' control by the Federal Re- ! serve system of the use of Federal | Reserve funds with respect to specula- | tion in securities. | (2) The intensification of control of | the Federal Reserve Board over Federal | Reserve operations. (3) The protection of commercial banks from the undue influence of cor- | porations engaged in buying and sell- ing securities. (4) Supervision and regulation of group banking through the mechanism | of the voting permit. i (5) A further extension of branch banking by national banks. (6) A general tightening of bank supervision by the Federal authorities. (7) The creation of a Federal liquidating corporation to aid depositors in closed banks. Powers to Halt Speculation. Mr. Collins analyzed every one of these seven points in a highly informa- tive manner. Giving the Federal Re- serve Board power to suspend a_mem- ber bank from further use of Federal Reserve facilities. if it is found that | such bank is making undue use of bank | credit to finance speculation in secur- ities, is clarification of authority al- ready granted the board. he said. The | other leading Rescrve Board feature relates to closer open market super- vision of open market transactions and recognition of the responsibility of the board in negotiations with foreign | bankers on central banking policies. | Ir. Collins then turned to the subject of security affiliates which certain metropolitan banks seek to amend. This has been one of the most controversial points in the bill. It is not of great in- terest locally. as no Washington banks have any affiliates znd take no part in the marketing of vast new security issues. Turning to the vitally important yroblems of group and branch banking, the speaker said, in part: Rules For Group Banking. “The next major subject of legislation | in the bill involves the supervision and | Tegulation of group banking. I think| it can be fairly said that these provi- sions are satisfactory to the best type of group banking in th> United States. Group banking as you know is carried on through means of a holding company organized under State laws which con- trols through stock cwnership a number ©f operating banks, “Since these holding companies are | not under the jurisdiction of the| Federal Government supervision over them had to be attained through the channel of the national bank act and | the Federal Reserve act by means of the | device of a voting permit. Under the bill the permit must be issued by the Federal Reserve Board. but as a condi- tion precedent the holding company must meet certain requirements set up in the bill. “Briefly stated these are first. submis- #ion to examination by the Federal ex- aminers; second, the publication of re- ports of their financial condition as re- quired; third. the establishment of a liquid reserve against shareholders’ liability, and fourth, there is vested in the Federal Reserve Board the power to revoke any such permit for violation of the terms of the permit. Public Interest in Branches. “We come mnext to the question of branch banking, which has been for a number of years a subject of acute in- terest in the banking fraternity. It scems to me it has been unfortunate that the discussion of it has been con- fined almest entirely to bankers because 3¢ is not primarily a banking question, but one of general publi~ interest, in which business men and the depositors generally have as much interest as the bankers. “The Glass bill however, makes no radical departure in branch banking. The bill as now before the Senate authorizes naticnal benks under strict Government control to establish branches potentially to the extent of State boundary lines and 50 miles be- yond in certain cases of close proximity of the parent bank to a State line. “Senator Glass indicated on the floor of the Senate that he was willing to favor an amendment withdrawing the authorization for crossing State lines thus leaving the strictly State-wide feature. Would Remove Unsound Bankers. “Fer a long time there has been un- der consideration a proposal to confer upon the Federal authorities the power to remove from office habitual offend- ers of the banking laws and of sound banking practices. Several controllers of the currency have recommended such a procedure and the proposition was strongly supported before the subcom- mittee which drafted the Glass bill “This section is operative with re-: spect to all benks doing business in the District of Columbia and all member banks of the Federr] Reccrve System. ‘This section appears to have the ap: proval of bankers generally as well as of Government officials. Public Must Siand Losses. “Tho bill contains an emergency feature designed to benefit depositors in closed banks. This is the Federal Liquidating Corporation. It may be briefly described as an instrumentality to hasten the dividends of depositors in closed banks upon their proven claims. “PFrom a public stan¥point there is some danger that the benefits of this provision of the Glass bill will be un- duly emphasized particularly since it is regarded as an emerg>ncy measure. The danger of this over-emphasis is in Enn duc to the introduction of two ills designed for a similar purpose but each bearing the name of “Depositors Relief Bill" The public should clearly understand that neither of these bills nor the provision of the Glass bill pro- viding for a liquidating corporation is designed to pay any losses which de- ors may have suffered through the vency of banks, national or State. outstanding financial measure of this mand previously, sold only in limited ntained | 24th Election BANKERS HONOR LOCAL FINANCIER. ALBERT S. GATLEY, !Who was again made_ treasurer of the | District of Columbia Bankers' Associa- i:ion at the recent annual convention. He is_ejecutive vice president of the Lin- coln " National Bank, having been con- nected with the institution cver since it { was founded. His annual reports to the {assoclation always reveal a balance, per- | haps this being the reason he has been kept in office almost quarter of a cen- D.C.STANDSTHRD | N NSURANE LS Sales Off Only 15 Per Cent in May—Average for U. S. Down 27 Per Cent. Sales of ordinary life insurance in Washington during May, with the ex- | ception of Nevada and Texas, made the | best showing of any section of the | United States, business being off but 15 per cent, while average sales for the whole country were down 27 per cent. Nevada came within' 1 per cent of last | year's record, while Texas was off 10| per_cent. Maryland was only a little lower than the District of Columbia, sales being 19 per cent lower than last year. Florida reported a 25 per cent decrease, Georgia, 23; South Carolina, 32; West Virginia, 24, and North Carolina, 39 per _cent. ! Virginia tied with Arizona. Montana | and South Dakota for last piace in the | whole list, sales in these four States being 40 per cent under the figures | for May, 1932. Many more States were below the 27 per cent average for the | whole country than were above that t. The Life Insurance Sales Research Bureau at Hartford reported yesterday that in every working day during May people in the United States purchased about $25,000,000 in new insurance. Assuming an average policy of $3,000, | this means that over 8000 people | bought new insurance, the reports as- | serts. The group includes those taking out their first policies, as well as old policyholders. The Hartford Bureau | claims that many people are putting i their money into insurance instead of the stock market. Detailed figures show that insurance written in Washington in May totaled $4,635,000. Maryland reported $7,386,- | 000, Virginia, $5,135,000 and West Vir- ginia, $3,925,000. GAIN IN EMPLOYMENT NEXT YEAR IS SEEN| Statistics Company Predicts Con- tinuance of Downtrend Dur- ing the Summer Months. Special Dispatch to The Star. NEW YORK, June 18.—Generalizing upon the basis of current statistical trends and the undercurrent of political and economic thought, the Standard Statistics Co. of New York currently | draws the following conclusions re-| garding the prospect for employment and wages: “Employment will resumie its down- ward trend during the Summer months in reflection of seasonal slackening in industrial volumes. Predicated upon possibilities of a gradual and irregular recovery in the final months of the year, however, cmployment should stabilize near present levels, but reabsorption of those now out of work will be slow, and Teal progress cannot be expected before the Spring of 1933. “The trend of wages is still downward and will continue so, especially in those industries most recently affected by de- { pression. Wage rates will stiffen at the first signs of improvement, but will lag behind prices in the upswing in general values. “The cost of living has fallen more sharply than wage rates. Further down- ward readjustment is in prospect, both through closer alignment of finished goods with raw material prices and through lower rents. The latter will come as a result of belated revision of real estate values and through develop- ment of low-cost housing. “Farm purchasing power in 1932 will fall well below pre-war levels, due to low prices for agricultural products and smaller crops. Government aid will as- sist loan renewals and marketing of products at home end abroad, but will not prevent distress conditions in many | e Dividend Meetings. NEW YORK, June 18 (Special). — Some cf the important dividend meet- ings to be held before the first of July are those of Brooklyn-Manhattan Transit. next Monday: Gold Dust on Tuesday, Liquid Carbonic on Wednes- | day, Corn Products and Great Northern on Friday, Atchison and American Can on June 28, Delaware & Hudson on June 29 and Allied Chemical on June 30. well as under these other bills the de- positor will simply receive that per- centage of his deposits which the assets of the closed bank justify. “In conclusion I feel safe in saying that the country will in the near future see the enactment of an important banking measure. The time appears ripe for it. Many banking bills have already been introduced in both houses of Congress and there is a great deal of unrest and uncertainty in financial | not be expedient or wise for this coun- SECURITY MARKETS |CHILEAN DEFAULTS | REFLECT IMPROVED| GAUSE LARGE LOSS | STATUS OF DOLLAR Steadier Tone Also Attributed to Better Outlook at Lau- sanne Parley. RECENT GAINS SUGGEST DEFINITE PRICE UPTURN Recovery in Markets Now Appears Much Nearer Than It Does in Business. BY CHAS. F. SPEARE. Special Dispatch to The Star. NEW YORK, June 18.—The impor- tant cvents this week had to do with intcrnational credit policies rather than | with domestic politics. The former have been positive and influential in their effects; the latter indefinite and likely to be the subject of controversy for the next four months. The net gain has been a substantial one on the constructive side of the situ- ation, as it includes the check to the foretgn raid on our gold supplies and an agreement between the major powers assembled at Lausanne not to enforce reparations payme ts due in July and solution of the entire war debt question. Markets a week ago had begun to re- flecs the improving status of the dollar, but it was not until announcement was made on Wednesday that the last of the dollar balances of the Bank of France had been witi@™w.a frem this country that the financial and busines:; world realized a crisis had been passed and that there was no longer occasion for fear over the gold standard. Since the middle of September, 1931, over $1,000,000,000 gold had been exported, of which nearly half had gone out in the past two months. In less than three years $2,300,000,000 of tne short-term funds credited to foreigners had been liquidated. Gold Reserve High. In an admirable paper presented by Dr. Benjamin M. Anderson, the econo- mist, on Friday, he referred to the gold recently shipped abroad as ‘“nervous money.” It represented tne same effort on the part of its owners to seek a place of safety as the gold, amounting to $850,000,000, that came into the United States from June, 1928, to June, 1931. With gold liquidated, so to speak, this authority estimates 'the present gold ratio in the Federal Reserve banks and in the Treasury, to paper money in cir- | culation, at 75 per cent, compared with | 451, per cent in June, 1920, when we were approaching & financial and com- mercial crisis instead of having experi- enced cne for nearly three years. This incident synchronizes in time with the growing conservatism in Con- gress toward measures that would have unsettled the credit of the Government and accounts for the strength this week in all Treasury obligations. A certain amount of it is due also to the steady accumulation of Government obligations by the Federal Reserve Board, which has taken over $950,000.000 of Govern- ment_paper into its portfolios since it | first began to consider, as a practical | measure, a policy of moderate inflation | through the creation of excess bank re- serves. The developments at Lausanne have been prompt and generous on the part of Germany's creditors. They have realized that they were dealing with a crisis greater than any “that ever af- flicted the world in tim: of peace” and that they must at once consider the| realities of the situation rather than how | much more each nation could get from | it than its neighbor. So the conference | immediately arrived at a decision to suspend payments due from Germany in July, and with this emergency meas- ure taken. to attempt soberly to draft a program that would avoid the threat- ened economic collapse in Central Europe. ‘This first step in what may eventually be the most important constructive de- velopment of the year 1s in line with intimations from the Americ-n Govern- ment that European nations must settle the reparations question among them- selves before taking up the subject of war debts with the United States. It must now be obvious, however, that with | the sacrifices the foreign creditors of Germany have offered to make, it will try to refuse to consider relative con- cessions and by such refusal extend the area and intensity of chaos in Europe. Increasing Price Stability. ‘The defeat of the bonus bill, follow- ing the passage last week of the tax me3sure, has brought a sense of relief to Wall Street that it has not felt over Washington affairs since March. As with other favorable happenings this month, it has not so far had a positive effect on security prices, though their increasing stability reflects an improve- ment in sentiment as well as the with- drawing of offerings by individuals and institutions that were unsettled by de- lays in balancing the budget, by the fear of payments to veterans and by the possible effect of a continued drain on our gold supplies. Markets have been indifferent to the Republican con- vention in Chicago and have not jndi- cated their approval or disapproval of the main features in the party plat- form. It is impossible to view the series of favoring _incidents of the last four months without coming to the conclu- sion that we are approaching the turn- ing point in the depression. There are some who believe that the turn has come, but ihat it is not yet generally sensed. This is truer perhaps of se- curity markets and of certain commodi- ties than of business. ‘The forces that have been created to combat deflation are steadily becoming more aggressive and more effective. ‘The inertia that characterized most of 1931 is being repiaced by the elemem.sl of co-operation and initiative. The defeatist mood of the public is passing. It is recognized that prices of both se- curities and commodities have been forced down to levels that are out of all proportion to the cost of production and to intrinsic values. (Copyright, 1932.) GOLD STOCKS GAIN. NEW YORK, June 18 (#).—Another moderate gain in the country's mone- tary gold stock was recorded today. Imports of $1,189,600 from Canada, added to a net decrease of $5,503,900 in gold earmarked foreign account, made an increase of $6,693500. There were no withdrawals for export. Wholesale Hardware Sales. NEW YORK, June 18 (#).—Business in wholesale hardware markets was less circles over what the outcome will be. ‘With due respect to the proponents of other bills the Glass banking bill is the active in the past week due to adverse weather conditions, dealers report. Gar- den products, which were in good de-! T0U.S. INVESTORS Total Stake of $300,000,000 Has Shrunk to About $15,000,000. EXTENSION OF CREDITS GRANTED AT RAPID RATE Debt Accumulated in the New York Market at Annual Figure of $36,000,000. BY DR. MAX WINKLER. Special Dispatch to The Star. NEW YORK, June 18.—The Chilean situation continues to cause appre- hension to foreign interests in Tespect to their investments in the southern republic. Investors in the United States have especial cause for worry, because their , stake in the country is very much larger than that of other creditors. A total of about $300,000,000 has been | invested by Americans in the cbliga- tions of the Chilean government, muni- cipalities and government-guaranteed bonds. At prevailing prices, the aggregate { market of a $300,000,000 investment is | hardly in excess of $15.000,000. In other words, almost a complete loss. American investors paid a rather dear price for the dubious privilege of play- ing the role of Chile's banker! Ranked Highly by Bankers. Of foreign countries whose credit standing was very much overrated, Chile ranked first. When the nation firs, appeared in the American market for funds, bankers identified with the financing pointed to the perfect fiscal record of the republic. Chile, so at least the investor was told, obtained her first external loan in Lcndon a century ago, and, throughout that entire period, the country has promptly and faithfully met all its engagements. ‘This was contrary to the facts. Dur- !ing that pericd, Chile defaulted twice, |one with respect to interest, and one with respect to sinking fund payments. { The American investor was told noth- {ing about these irregularities in the country's fiscal record. It is difficult to state whether he wculd not have been just as eager for Chilean bonds even if he had been told of the na- tion’s defaults. Be that es it may, United States in- vestors hold today 'Chilean bonds to | an amount of $289,921,000, the result of 16 years of borrowing. Exclusive of a privately-placed municipal loan of only $229,000, Chilean bonds outstanding at present in the American market total $280,692,000, equivalent to an average annual rate of well over $36,000,000. This compares with an annyal average of only $3662,500 for Toans outstanding in the European markets, which hold today bonds to an amount of $168.477,500. the result of borrow- ing over a period of 46 years (1885- 1930). Within nine years the Chilean gov. ernment was permitted to accumulate a debt in the United States of more than one and one-half times the debt created in Eurcpe over a period of 46 vears. Reduced to a per annum basis, the rate at which the debt accumulated on the New York stock market was about nine times that of Chile’s ac- commodaticns in Europe. The borrowing rate for Chilean mu- nicipalities amounts to less than $1.- 500,000 for the United States, against less than $400,000 for Europe. Amer- |ican investors are now being called upon to pay dearly for the feverish haste with which their Southern neigh- bor was being accommodated. Chilean bonds are in complete de- fault and the outlook is anything but promising Private Investments. The above refers exclusively to the obligations of the Chilean government and political subdivisions. The status of private investments is not much dif- ferent. What measures foreign powers will take to protect the investments of their nationals in the Southern republic is too early to state, although it is worth calling attention to the fact that Great Britain. although her stake in Chile is smaller than that of the United States, has given specific instructions that “a warship be prepared in case of need for protection of British interests in Chile.” The French, whose investments in Chile are merely nominal, compared with those of the United States and Great Britain. have lodged a protest with the new Chilean government against measures affecting French in- terests. The protest was laid before the new Chilean administration by the French Ambassador to Chile. The Bel- gians and the Swiss have formed pro- tective committees which have the sup- Pport of the governments. The official attitude of the United States is awaited with a considerable degree of interest. (Copyright. 1932. by the North American Newspaper Alliance, Inc.) CHANGE IN COPPER SELLING EXPECTED Two Markets for Metal May Be Created as Result of Tariff. Special Dispatch to The Star. NEW YORK, June 18 —Copper com- panies have under consideration reor- ganization of Copper Exporters, Inc., the Co-operative Export Association of the industry, to meet changing mar- keting conditions created by enactment of a 4 cents a pound tariff on foreign metal, but have taken no definite ac- tion yet, it was learned today. The present organization embraces all important copper producers, both domestic and foreign, whether they are exclusively engaged in production in the United States, produce only abroad or both. After the tariff goes into ef- fect & sharp line of cleavage will be drawn between the American companies engaged solely in domestic production and those which also have foreign prop- erties, as well as the foreign com es. The foreign producers will be shut out of the American market by the tariff, while the purely domestic companies will be protected from cg‘r?)etmon with foreign copper by the ta: 1 As a result of that change it is ex- pected that two markets will be created. One for domestic copper will exist in this country, while another for foreign copper will exist in all countries outside the United States. It is assumed that each market will have its own price level, with the result that foreign pro- ducers will have exclusive possession of the foreign market, while domestic pro- ducers will have the HELP AT HAND! (Copyright, 1932) 5 SN RN BAANSSNS W RODENBERS CHOSEN Convention Hall Co. Reports Good Business and Votes $3.50 Preferred Dividend. The annual meeting of the stock- | holders of Washington Convention Hail | Co. which controls the new Center Market, was held at the office of the | corporation, Convention Hall Building. | Pifth, K and L strects northwest, and the following directors were elected: William A. Rodenberg, chairman: C. Chester Caywood, secretarv; Thomas { P. Gore, Frank E. Ghiselli Fred A. Spicer. G. W. Forsberg, H. K. Burtner, Samuel R. Mullen, Wootton E. Young and W. H Souder. At its regular monthly meeting Fri- v. the following officers were elected: William A. Rodenberg, chairman; Woot- ton E. Young, president: Fred A. Spicer, first vice president: H. K. Burtner, sec- ond vice president: Frank E. Ghiselli, treasurer; C. Chester Caywood, secre- | tary and general counsel; Samuel R. Mullen, superintendent, and William H. | Souder, controller. | The resignation of John 8. Blick as | president, general manager and direc- | tor, was accepted and Wootton E. dYoung was elected in his place as presi- ent. The directors voted a dividend on its | preferred stock of $3.50, payable July | 15; books for transfer of stock will be | closed July 1. Declaration of the dividend shows the | corporation is doing an excellent busi- ness, successfully ignoring the depres- + sion. |GAIN IN GOVERNMENT EXPENSES IS REVEALED By the Associated Press. Operation of the various department | of the United States Government ggregated expenditures of $2,376,450,- 476 during the first 11 months of the present fiscal year, an increase of $262,000,000 over the corresponding period of last year, and $28,000,000 more than _expenditures during the whole of the fiscal year 1931. ‘This statement, which was made avallable at the Treasury, includes the Veterans' _ Administration, Shipping Board and other independent offices | and commissions. Approximately 30 per cent of the total was expended for the benefit of veterans, the total disbursed in this direction amounting to $718,819,175, as compared with $643,839,071 during the corresponding period of last year, and with $708,608,070 during the entire last fiscal year. New Cooperage Company. WINCHESTER, Va., June 18 (Spe- cial). — Another cooperage company entered the local field this week, in- spired, it was understood, by develop- ment of the apple industry in Fred- erick County. The State Corporation Commission granted a charter to the | Standard Cooperage Co., Inc, of Stephens City. A general cooperage business, including the manufacture of barrels and_related articles, will be conducted. R. L. Long, Middletown, is president, and William M. Reid, Steph- ens City, secretary-treasurer. Reid and long and G. R. Ridgeway, Stephens City, compose the board of directors. Packing apples in bushel baskets has become quite popular among growers here in recent years, and it is expected the company will be equipped to make such containers as well as barrels. els. CHICAGO DATRY MARKET. CHICAGO, June 18 (&) Blll!!l‘—-i Receipts, 16,410 tubs; easy; creamery specials (93 score). 3 14; extras (92), 16%; extra firsts (§0-91), 15%%a 16; firsts (88-89), 14!.al5; seconds (86-87), 12a13%; standari tralized carlots), 16. | ds (90 cen-| creasing ks Eggs—Receipts, 3&:«:9 d consumers held off, A fair mepday prices S Tancmlady | . U. S. Bonds Score | Substantial Gain MARKET PRESIDENT 'n Weeks Teadine, |\DROVE PROSPECT German Dollar Obliga-| tion’s Are Also Higher | on Brisk Turnover. - | Special Dispatch to The Star. NEW YORK. June 18.—Although from the point of price appreciation the | bond market’s performance during the week was not particularly notable, two important divisions of the market had substantial advances. The first of these involved the market for United States Government long-term bonds. In the active issues of Treasuries and Liberties the week saw an average ad- | vance of over 2 points, all of which was maintained in brisk trading. The best gains were in the low coupon issues such as Treasury 3s and 3'is, while there was more ccnservative improve- ment in the Liberty issues. two of which are callable this year and one next vear. This buying revealed a return of | confidence in the outlook for long-term Government bonds. That the movement in Governments | did not extend further was due to the inability of the market as yet to see just what financing may be necessary before the Treasury can look after its, immediate needs and turn its attention | to the matter of refunding at least a | portion of the Liberty Loans. The other division of the market to| improve in a significant manner was the list of German dollar bonds. Ger- | man government 5',s and 7s, which are prior to all other German obliga- | tions, advanced to levels about 13 points | above their 1932 lows. While German corporation and municipal bonds shared | in this advance to a satisfactory ex- tent, it was evident that a considerable premium was attached to the priority | of the Young and Dawes plan loans. As a matter of fact, a_ considerable | amount of the buying of the 5!2s and | 7s was attributed to Scandinavian in- | vestors switching from other German | bonds, such as the obligations of the German agricultural banks and Ger- man industrials, into the government dollar issues. This development, together with the surprisingly good reception of the opening developments at Lausanne, | served to create a brisk inquiry for| many European bonds. (Copyright, 1932.) STEEL PRODUCTION IN FURTHER DECLINE Present Rate of Output Is Esti- mated at 18 Per Cent of Capacity by Trade Authority. By the Assgeiated Press. NEW YORK, June 18.—Decreased | orders for most sieel products in the past weex, attributed largely to un- certainties’ in the political situation, were reflected by further declines ingot production. A trade authority estimated the present rate at 18 per cent of capacity. Hopefulness for im- provement, despite usual seasonal de- clines at this time, is said to be based on & belief that present purchases are below ordinary requirements. With the exception of one manufacturer, buying from the the automobile industry was restricted and structural awards were still principally for public _projects. Prices remained unchanged. Buying of pig iron was restricted at unchanged | prices. Domestic buying of copper, stimu- lated by the imposition of a 4-cent import duty effective June 21, tapered off and the market became quiet, with sellers still asking 53 cents for nearby electrolytic delivered in the Connecti- cut Valley. Unofficial reports of de- reased estic shipments and in- had a restricting in- N | fundamental happenings. BASIC TRADE GAINS Recent Developments Are Analyzed as Signs of Change, in Down Trend. Special Dispatch to The St | NEW YORK, June 18— Statistics | show that withing the last few weeks | basic as well as temporary improve- ments in business have taken place, but these developments have been ob- secured when viewed in relation to busi- ness as a whole. The excise taxes which go into ef- fect on June 21 have brought about gains in both wholesale and retail pur- chases of the articles affected. The upturn has been noticed especially in | the wholesale buying of such lines as | rubber tires, furs, sporting goods and | toilet articles Part of the retail trads gains of the last fortnight were directly attributed to purchases in anticipation of the excise taxes. These temporary developments. how- ever, have tended to overshadow more An instance is the rise in silver metal prices. With the white metail still the basis of pur- chasing power of nearly half of the world's population, any improvement in it is worthy of attention. Last month | silver staged a rise of .19 per cent, while in the first five months it showed a net loss of only 48 per cent. In May. 1931. it was up .19 per cent, but in May, 1930, it was down 2.29 per cent. The betterment in silver recently is more basic than reports of monetary conferences. It s due to a decreased | supply, because of increased commercial and coinage use, as well as declining output of mixed ores. and an increased demand for monetary usage in India and other places where gold has been sold and the proceeds used to buy silver. { Commercial failures are also a part | of the general portrait of business. These were down 7.82 per cent in May and down 3.70 per cent for the first five months of this year. In May, 1931, commercial failures increased .37 per cent and in May, 1930, they were up 1.68 per cent. Fewer bank failures are another highly encouraging factor in the slow! changing business landscape. Borrowings of members of the Fed- eral Reserve System show a highly en- couraging tendency. They were down 12.4 per cent in May and off 11.60 per cent in the first five months, as con- trasted with a rise of 42.4 per cent in May, 1931, and a drop of 3.57 per cent in May, 1930. (Copyright, 1932 FEDERAL RES.ERVE LOSES 804 MEMBERS IN YEAR By the Associated Press. The membership of the Federal Re- serve System suffered a loss of 804 in- stitutions, through suspensions and for other causes, during the calendar year 1931, it was reported today in the board annual report. The reduction, which decreased the roster from 8,050 to 7,246, compares with | a loss of 472 institutions in the previous year. Membership at the end of the year included 6,368 national and 878 State banks, the board said, represent- ing decreases of 663 and 141, respec- tively, for the year. ! e lane New Bond Financing. NEW YORK, June 18 (#).—New State and municipal financing sched- uled for the coming week by 52 com- munities totals $18,867,339, compared with $39,065.012 during the past week, cays the Daily Bond Buyer. Creditors Ask Reorganization. NEW YORK, June 18 (#).—About 76 per cent of the creditors of the Cosden Oil Co., which went into receivership in November, 1930, have deposited their claims in favor of a proposed reorgan- ization of the company, it vun:l!;- FOREIGN BUSINESS PINNING HOPES 10 LAUSANNE MEETING Chamberlain’s Opposition to Further Tax Increases Cheers British Interests. UNEMPLOYMENT DROPS 10 PER CENT IN FRANCE German Exports Unfavorably Af- fected by Trade Barriers. Stocks Are Weak. Spe Dispatch to Thi NEW YORK, June 18—Cables and wireless dispatches to the Business Week give the following survey of busi- ness abroad for the week ending today: London. — Amicable Anglo - French conversations which have led to a more hopeful outlcok at Lausanne, plus the assurance from Chancellor Chamberlain that further tax increases are unlikely has once more developed a spark of optimism on British markets _Stock markets improved early #n the week following a period of irregular dullness Bonds, ~especially foreign covered. Money remained easy. e oversubscription to the Cen- tral Electricity Board issue of 10 mil- lion. 47, per cent stock which was issued | at 96, gave encouragement to pending issues. ~ Central interest continues to be the prospective conversion loan of 2,086 millions of 1917 war loans from their present 5 per cent rate to some lower figure, Industrial activity is still unsatis- . though the iron and steel in- g\:stn is sntouragv:d by the new 33 1-3 T cent duty which has been by the Tarifi Committee on :hegrcfl':: tion that the industry carry out long- considered rationalization plans. Since this is one of the four great British in- dustries, the decision has spread optimism. There is still considerable uncertainty over the labor situation in the textile industry. Cotton weavers will take a new ballot soon which will determine whether or not they will strike or continue negotiations with the owners, Favorable Factors. Britishers are displaying unusual in- terest in the short Summer cruises that are planned by several steamship lines, and bookirgs are heavy. Not a few Americans have signed up for these cruises. Paris.—During the week these factors had a favorable influence on French market sentiment: Unemployment de- clined 10 per cent, pig iron prices firmed on completion of plans for a sales comptoir; rayon lines were more active; heavy machinery and construc- tion equipment were in greater demand; :geu!:onsu;um?n industries were busier he national equipmeni Febttl equipment program got Outstanding unfavorable develop- ments were the lessened demand for coal because of declining industrial ac- twity; the dwindling market for iron and steel and the very glocmy prospect for export sales; the restricted market for cotton and wool, and lcather; and the smaller demand’ for machine tools (though prices are firmer and competi- tion from seccnd-hand dealers smaller). The Bourse was irregular to steady. There is still a plethora of mone: rates are low. Dollar exchange con- tinued to strengtnen on reports from New York that the foreign gold drain was nearing an end. In the foreign trade report which shows that France has reduced the im- port trade balance 25 per cent in the first four months of 1932, it is also re- vealed that the Soviet Union is the only foreign country to show improved trade with France. Soviet goods valued at $7.250.000 entered France in the first quarter. French exports to Russia, on the other hand. were cut 75 per cent, totaling scarcely $230.000. Berlin.—Sentiment was influenced fa- vorably during the week by four major factors: (1) the better outiook for Lau- sanne, (2) the rise of German bond prices’ on foreign markets, and the smooth prolongation of the fifty-million dollar loan by the American banking group to the Gold Discount Banl Dr. Luther's strong anti-deval speech (significant because he is presi- dent of the Reichsbank), (4) the ac- celerated seasonal improvement in the employment outlook (the number of Jjobless decreased 156,000 in May). Germany’s Cash Position. Germany’s cash position is still strained, but it seems likely now that it will not become critical before the end of July. Among the cities, however, the situation is worse daily. Duisburg this week failed to meet intcrest charges on its 1928 loan. This probably marks the beginning of a string of municipal de- faults. Ourrent indicators generally are not fl\'omblc With the exception of the arge Russian orders still to be filled, the steel trade is slack. Exports of half- finished products to England have al- most ceased since sterling depreciated and tariffs were raised. Automobile production reports for the first quarter are just available, show passenger car output is off 46 per cent, trucks 51 per cent. Stocks on the Bourse were irreg- ular and weak. Shipping stocks partic- ularly broke when unfavorable company reperts were released. LAID TO SHORT SALES Special Dispatch to The Star. NEW YORK, June 18.—Brokers who follow the trend of the market state it was short selling rather than liqui- dation that affected prices at the end of the week. Traders were prompted to sell stocks on the lack of response by the market to the favorable do- mestic and foreign news and its in- ability to penetrate the high levels of June 4. From Tuesday until Thurs- day there was an average advance of 4 points, but with a number of indi- vidual stocks weak during this period and a great deal of hesitation shown by both professionals and the public in following up the gains. The action of the market at the end of the week has been a distinct dis- appointment and called forth today in brokers’ letters the general comment that unless it receives support it is likely to drop into a lower level. Exchange Seat Values. NEW YORK, June 18 (#).—Following their rapid descent in May, New York Stock Exchange seat values are back to the relatively high levels prevailing at the end of April. Announcement of the formation of the banking bond pool about a fortnight ago stiffened the mar- ket's backbone and incidentally helped to raise the value of seats from the 13« year low of $68,000. A seat sold toe