Evening Star Newspaper, November 25, 1934, Page 61

News of Markets Pages 1 to 4 FINANCIAL AND CLASSIFIED he Swunday Stae Part 5—12 Pages TRANSIT STOCK UP 10 §2850 A SHARE OND.C. EXCHANGE Price Rises as Result of $1 Dividend Voted by Di- rectors Recently. PAPER COMPANY ELECTS TWO NEW DIRECTORS * Acacia Mutual Life Creates New Positions and Makes Impor- tant Appointments. BY EDWARD C. STONE. Capital Transit Co. stock sold at $2850 a share on the Washington Stock Exchange vesterday as a result of the §1 dividend declared by the directors during the past week. This was a gain of $2.75 per share since the last previous sale. Four sales were recorded during the Saturday session, involving a turn- over of only 28 shares, indicating that holders were not anxious to part with their stock. The week closed with $28 a share bid for the stock and $29 asked. Before the dividend was voted, Capital Transit shares had sold around $25 and $26 a share for many weeks. Other issues were also strong on the exchange yesterday. Potomac Electric Power 5'; per cent preferred sold at 112, while the same corpora- tion's 6 per cent preferred moved at 109';, Riggs National Bank common stock appeared on the board at 210, same as the last previous sale. The stock has recently advanced 5 points. Bonds were neglected. The Transit dividend was still a lively topic of conversation among the exchange members and especially the stock- holders. The shareholders insist they are entitled to the $1 payment, in spite of some claims to the contrary, on the ground that the money shouid be put into improvements. They have waited long and patiently for some return on their money. Owners of the old Capital Traction stock which was exchanged for the Transit stock, have carried their in- vestment for five years without getting a cent in the way of dividends. The fact that the North American Co. will get 51 per cent or more of the $240,000 distribution makes no difference, the local shareholders believe. The North American is entitled to a return on every share the company holds. The stockholders point to the fact that the Transit Co. still has ample funds with which to make improvements, due to the splendid earnings during the past 12 months. Paper Firm Adds Directors, Directors of the District of Co- lumbia Paper Co. have elected two hew members to the board, according to announcement made yesterday by President G. L. Nicolson. J. B. Wyckoff, manager of the Nation's Business magazine, was added to the board and John Harrison Davis, manager of Judd & Det- weiler, Inc, was also elected. Both are business men of long and suc- cessful experience and are considered to add much strength to the present directorate. The new members take the places of the late Robert D. Weaver and his brother, William M. Weaver. After the death of his brother, William Weaver expressed a wish to be re- lieved of further duties as a di- rector and his request was granted with regret, The District of Columbia Paper Co. s located in Georgetown and has| been in operation for many years. Like many other corporations, the firm was hit hard by the depression. Officials now express encouragement over the outlook. Acacia Mutual Adds to Staff, ‘William Montgomery, president of the Acacia Mutual Life Insurance Co., yesterday announced newly created positions of general controller and chief agency accountant. The position of general controller will be filled by Ralph E. Heitmuller, associated for many years with lead- ing firms of public accountants. That of chief agency accountant is to be occupied by Otto Hammerlund, long a member of the Acacia organization. Mr. Heitmuller was educated fin local graded and high schools and was graduated from George Washington Law School in 1921. He attended both Columbia University and New York University, receiving the degree of bachelor of commercial science from the latter institution in 1925. Shortly thereafter he was admitted to practice as a certifiad public accountant in New York State, and in 1928 became a member of the American Institute of Accountants. He also has been admitted to certified public account- ant practice in the District of Columbia. In 1922 Mr. Heitmuller entered the public accountancy firm of Price, | ‘Waterhouse & Co., and later became associated with R. G. Rankin & Co, Since 1932 he has been manager of the Washington office. Bills Paid More Promptly. Washingtonians are paying their bills more promptly, according to the latest report on retail store collections from the Federal Reserve Bank of Richmond. During October 29.1 per cent of the receivables due Washing- ton stores were collected. Up to Oc- tober, collections had been running around 25 per cent for several months. ‘The average for the whole fifth dis- trict in Oc{gber was 30 per cent. For the first 10 months of this year ‘Washington stores reported a stock turnover of 3.208 times, while stocks during October were turned 0416 times. Stocks on hand at the end of Oc- tober were 14.3 per cent lower than at the same tibe a year ago, but 8.8 per cent larger than at the close of Sep- tember this year. Retail sales were 28.6eahead of October, 1933. OIL LEADERS TO MEET NEW YORK, November 24 (P)— Meetings of various representatives of the major oil companies will be re- sumed on November 28 for the pur- pose of taking up again the questions ©of margins to dealers on gasoline and - differentials between branded and un- branded gasoline. Several sessions were held at which this subject was discussed prior to November 8. WASHINGTON, D. C, Head Associated Exchanges OFFICIALS ELECTED AS OFFICES ARE MOVED HERE. W. W. Spaid (left), partner in W. B. Hibbs & Co.. who has just been elected president of the Associated Stock Exchanges, and Eugene E. Thomp- son, named vice president, secretary and treasurer under the reorganization just completed. Head offices have already been brought from Detroit to Washington and the organization includes 100 per cent membership of all the big exchanges in the country as well as the smaller ones. Head- quarters were opened here in order that the association might keep in closer touch with matters of vital import before the Security Exchange Commission. Mr. Spaid has been in Mr. Thompson, one of the founders the brokerage business 30 years, while of Associated Stock Exchanges, has been president for the past seven years, WEEK'S TRADING IN BEST AVERAGE HIT SINCE AUGUST Market Moves Out of Nar- row Range, Prices Gen- erally Advancing. BY CLAUDE A. JAGGER, Assoclated Press Financtal Eaitor, NEW YORK, November 24—The stock market pushed out of its narrow trading range to record the best av- erage level since August this week. Corporate bonds generally were re- actionary early in the week, but later joined the advance in shares. Gilt- edged issues remained firm through- out the period, and United States Governments recovered to the best levels since Summer. Commodities were mixed, but corn managed to push up nearly 3 cents a bushel for some deliveries, to the highest price in four years. Wheat nd cotton moved narrowly, the former showing declines of % to 1 cent a bushel for the week, and the latter gains of 15 to 45 cents a bale. | Reports Encouraging. Wall Street was cheered by further reports of expanding retail trade, and | additional slight gains in _industrial production, notably steel. Uneasiness over the position of the utility issues | subsided somewhat after last week's slump, and they recovered moderately after further selling, particularly in bonds. The ordering of another regular quarterly dividend of $2.25 by American Telephone was a reassuring factor. The flurry of uneasiness over the position of the European gold stand- ard currencies appeared to have sub- sided rather definitely for the mo- ment at least, and exchange rates showed little change during the week. Gold, however, continued to pour into New York from abroad. Railroad stocks and bonds had a sinking spell early in the week, giving rise to further discussions of the pos- sibility that a few more heavily in- debted carriers may be reorganized. Jesse Jones. chairman of the R. F. C., however, in New York to urge cred- itors of the already bankrupt Mis- souri Pacific to draw up a reorganiza- tion plan, said that he did not know of any further plans at the time to put railroads through the wringer. Center in Industrials, The activity in shares centered in the industrials, and much of it was regarded as of a distinctly profes- sional character, but, nevertheless, more than two score issues were pushed up to the highest levels for 1934. The Standard Statistics Co. index for 90 representative shares rose 2.0 points during the week to 74.6, the best level since late August. Of the 90 shares, the 50 industrials taken alone advanced 2.5 points to 89.1, the best level since mid-July. The 20 rails more than recovered the losses of early in the week, and closed at 374, up 0.7, and the highest in a fortnight. The 20 utilities dropped to a low on Monday, then a little more than recovered, closing today at 52.0, up 1.1 from a week ago. ‘The price index of 60 corporate bonds lost 0.4, of a point early in the week, then recovered as much, finish- ing unchanged from a week ago at 84.3. The 20 utilities, at 88.1, showed a decline for the week of 0.7, while ralls a little more than regained an early sag, and industrials worked slowly but almost steadily higher. U. S, MAY REQUEST POWER RATE LAW OF NEXT CONGRESS Legislation Expected to Curb High Cost in Interstate Transmission. By the Associated Press. Influential Government experts | studying the electric power situation may recommend some Federal rate legislation. They do not feel they can go far on rates, as that is largely a matter | for the States, but where power is transmitted across State lines, they believe the Federal authority may | enter by establishing what are known as “gateway” rates. High Prices Paid. This would be where power is moved from one company in one State to an | affiliated company in another State. | In some cases. an expert pointed out | privately, it appears that the company | receiving the power will pay a high price for it, thus requiring similarly higher rates to consumers in the re- | ceiving State. Federal supervision might be called upon in such a situa- tion. The problem develops when both companies are controlled by one hold- ing company. The transmitting com- pany, for reasons of State legislation, may sell its power comparatively | cheaper within the first State, and | then charge a high rate to its affiliate | company—since the earnings of both | companies go into the holding com- | pany pool. Lower Rates Pressure. The setting up of yardsticks, how- | ever,. ih Government-owned power operations is expected by this expert to be much more important. The theory is that the mere public knowl- edge of the comparative rates would arouse sufficient pressure to force lower rates. The entire problem awaits an au- thoritative determination of what | utility rates are throughout the coun- try. This information is expected | from the Federal Power Commission’s survey. A prime difficulty in finding whether rates are high or low is the fact that some companies have much greater debt burdens and therefore need the higher charge. TIRE EXPORT: TRADE MOUNTS 23 PER CENT The share of fhe United States in | the world's tire €xport trade increased | to 23 per cent in the first nine months of the current year, compared with 21 per cent and 22 per cent, respec- tively, in the correésponding periods of 1933 and 1932, the Commerce De- | partment reports. Shipments of this commodity from principal manufacturing countries in the January-September period of 1934 totaled 4,110,000 units, against 4,155,000 and 3,835,000 units, respec- tively. \ Principal exporting countries listed in order were: Great Britain, the United States, Canada, France, Bel- glum and Italy. NEW YORK LIVE STOCK NEW YORK, November 24 (&) (State Department of Agriculture re- port of New York and Jersey City Live Stock Market).—Sheep and lambs, 3,520, all direct; markets ! nominal. Advance of Corn and Decline Of Wheat Bewilders Traders By the Associated Press. CHICAGO, November 24—With corn prices kiting end wheat prices tumbling, many grain traders just now are a bit bewildered. Vast shortage of feedstuffs in the United States owing to crop failure west of the Missouri River and be- cause of relatively small yields to the east, leading authorities assert, go far to explain the action of the corn market. Most observers say the opposite behavior of wheat values here is largely due to the fact that Liverpool wheat quotations have de- clined every day for 13 sessions ex- cept only two days. Unusual selling pressure from France, together with evidence that surplus stocks of old wheat in Argen- tina and Australia are much larger than supposed, give at least some clue to what is happening at Liverpool, where measured in gold wheat has this week reached about the bottom- gut level for many years. Compared to a week ago, wheat in Chicago wes 173-27 cents a bushel lower this morning, with corn varying from unchanged figures to a rise of 2 cents, oats 3; off to % up, and provisions 10 to 15 cents down. Dollar-a-bushel corn in Chicago accompanies persistent scantiness of | receipts, as well as decreases in visible | stocks at a time when usually ter- minal supplies®are rapidly piling up. Meanwhile, rural feeders continue to pay above terminal prices for corn in most parts of the corn belt, de- spite some imports of feedstuffs pene- trating from Canada to Chicago and from Argentina to St. Joseph, Mo. | Danger of speculative air pockets resulting from such imports arouse only derision among numerous traders. Domestic primary arrivals of oats are pointed to by traders as being pitifully small. Provisions have been weakened by enlarged receipts of hogs. 5 IDLE MONEY AIDS GILT-EDGE ISSUES 10 PEAK LEVELS Foreign Capital Is Branch- ing Out to Investment in Industry. FIVE LONDON ELECTRIC CONCERNS CONSOLIDATE France Settles Under New Gov- ernment, but Other Factors Are Influencing Business. By Cable to The Star. LONDON. November 24.—This week the plethoria of idle money pushed gilt-edged securities to peak levels and even overflowed into industrials. If company reports continue to be as en- couraging as they have recently, money is likely to seek investment in industry. Humber (automobile), Sus- I sex Brick and Durham Steel were the companies issuing optimistic reports in the last few days. The opening of -Parliament caused only a small sur. Business in the present session is likely to be confined to the India question and to the bud- get. It is generally believed in the city that the treasury is endeavoring to force gilt-edged rates to 2': per cent when, after a few smaller con- versions are completed, a big slum- clearance loan will be floated. Five London electric distributing companies have formed a Central London Electricity Distribution Com- mittes for unification of the com- panies and, possibly, to bring about a merger at some later date. This is regarced as very significant in view of other unification moves in steel, rail- ways, cotton. PARIS —France has calmly settled down under the new government, but other factors are influencing business Rentes, after booming to new highs following the organization of the Flandin government, reacted this week on the rumors of German armament totals and (he realization that the new French cabinet, no matter how eager to cut expenses, could not re- duce military expenditures. Looming over the future, also, is the Saar ques- tion, which will be a shadow over busi- ness until in January, when the voting takes place. French business shows no sign of reversing the slow downward trend of recent months. Iron and steel pro- duction are down, with the decline in pig iron production for the first nine months 4 per cent below the same period of last year. Steel output in the same period declined 8 per cent this year. The chemical and woolen industries continue to carry on at reasonable levels, but other textiles and the automobile industry are bad. BERLIN.—The relapse of industrial activity in Germany has been con- firmed by the release from the Bureau for Business Research of “revised” in- dustrial production indices for July- September, 1934. They show a con- tinuous decline from the peak figure 86.3 in September. Influenced by re- striction of textile production, con- sumers’ goods industries showed a still greater decline, the respective figures for the three months being 97.9, 93.3 and 89.7. If the general production index did not decline more than by 4 per cent, this was due chiefly to continued brisk building activity. The building index jumped from 77.6 in August to 85.3 in Sep'emoer. In line with the up- swing of building activity the produc- tion of household goods also showed substantial gains. Public construction contributed materially toward the ab- sorption of adaitional labor. The number of workers employed in road and canal construction rose from 367,000 at the beginning of July to 424,000 early in October. More than 75,000 men were engaged in the con- struction of Hitler's super-auto roads. ‘The fact that the revival of building activity played such an important role in preventing a more rapid fall of the general volume of industrial produc- tion suggests that a sharp setback might reasonably be expected when the cold season sets in. Anticipating this vossibility, the federal unemploy- ment board has raised the amount of daily subsidg paid to municipalities for each worker engaged on emer- gency works from 2!, to 3 marks. Business is increasingly scared by the stubborn policy of price deflating under pressure from the “price dic- tator.” The pessimistic appraisal of jts adverse influence on corporate earnings is reflected in the depressed stock market. Most noticeable this week was the sharp drop in brewery shares following the drastic cut in beer prices in Bavaria. SCHARF IS HONORED FOR LONG SERVICE Second National Bank Staff Gives Testimonial Dinner to Vice President. Jacob Scharf, executive vice presi- dent; of the Second National Bank, was tendered a testimonial dinner ! last evening at the Hotel Continental, in honor of 40 years service in bank- ing. The affair was in charge of the Second Na- tional's Employes Club. Among the speakers were Victor B. Deyber, president of the bank; William M. Hannay, another vice president, and E. F. Colla- day, the bank’s trust officer and attorney. The chief speaker was William S. Tor- | bert, a local attorney. | Mr. Scharf was felicitated for his long and effecient service to the Sec- ond National Bank. The hope was also expressed that he will serve the same institution many years longer. At the conclusion of the progrem, he was presented a secretarial desk by his associates in the bank, for which he expressed deepest nwncm*m. Jacob Scharf. of 89.7 in July to 87.4 in August and SUNDAY MORNING, NOVEMBER 25, 1934, 54 i\2 J A\ W7/ , VY. 2 d/ Classified Ads Pages 5 to 11 ! T Half of Loss in Depression Said to Have Been Regained By the Associated Press. | NEW YORK, November 24.—Indus- | trial production indices show that “nearly half the ground lost during| | sion has been shorter working hours, depression has been regained,” Max- well S. Stewart, associate editor of the Nation and a former economist for the Foreign Policy Association, | declared today. While industrial gains approach 50 per cent, Stewart told a conference of the International Industrial Rela- tions Institute, “the total of world unemployment has not been dimin- ished by more than 15 per cent.” “Labor not only has suffered more than its own share in the depth of the ecrisis” he said. “but has In- variably lagged behind other groups in enjoying the fruits of recovery.” Labor's only gain through depres- Stewart said. but he looked upon | that as a mixed blessing. “To a certain extent this un- doubtedly represents a net gain,” he said, “for there is little likelihood that any nation will return to a long working day. But for the time being it not only means a serious loss of income to the working class as a whole, but has greatly added to the anxiety and uncertainty of the pe- riod.” GAINS MODERATE IN 0. S, BUSINESS Favorable Volume of Trade With Industrial Activity Slightly Better. By the Associated Press. Available data assembled by the Commerce Department revealed fur- ther moderate gains in domestic busi- November 17. Retail sales reports showed the maintenance of a rela- tively favorable volume of trade; in- dustrial activity was slightly better, and the construction industry pro- vided some evidence of renewed ac- tivity. A broadening of the industrial de- mand for electric power is evident from the statistics for the week, as | the gain over the preceding week was substantially above the usual seasonal | increase. Power output was 4.6 per | cent higher than a year ago, with the Southern area reporting an in- crease of 16 per cent. operations have advanced to about 28 per cent of capacity, with additional support anticipated from the auto- mobile industry when activity is re- sumed on a broader scale next month. Automobile assemblies held steady as one of the leading producers con- tinued to turn out 1934 models. ton cloth production has been main- tained close to 125,000.000 yards a week for nearly a month. This repre- sents the highest rate of production since last Spring. Bituminous coal production increased during the week | ended November 10, while lumber pro- duction was lower. Wholesale prices averaged slightly higher than in the preceding week, according to the Bureau of Labor Statistics’ index. Prices of farm prod- ucts continued to improve, while food prices declined. Increases were re- ported also for the fuel and lighting, chemical and drug and miscellaneous groups. AUTO MAKERS EXPECTED TO AID BUSINESS MOVE By the Associated Press. NEW YORK, November 24.—From now on the motor industry is expected to give business more support. Auto- mobile manufacturers are getting into swing on production of 1935 models. The move to stagger introduction of new models, as announced recently by leading companies, will tend to iron out the usual sharp year-end upturn in automobile output, according to motor observers. Nevertheless, motor sources have béen increasing their demand for steel and other materials for 1935 manu- facturing programs. Such demand should grow into the Spring months, it was pointed out. Steel mill | Cot- | UNUSUALREACTION INCOTTON MARKET Prices Advance, Althoug Notices of Delivery Are Posted. By the Associated Press. Although notices of actual cotton to be delivered on December contracts | | were posted on the New Orleans mar- [ ness activity during the week ended | ket at the week end, prices advanced in an unusual reaction to close the December option at 1232 cents a pound, compared with 1230 a week ago. Notices will be issued at New York on Monday, but if they are as com- paratively small as at New Orleans it will appear that previously heavy December liquidation has left the mar- ket buoyant and ready to absorb of- fers. Wind Up With Same Price. The trade said the switching of De- cember futures into later months pro- vided a large percentage of the trad- ing, and the contract wound up the week at 12.29 cents a pound, the same as the week before. The average cash price of middling 7¢-inch cotton was 1245 cents a pound, compared with 12.48 last week and 9.80 a year ago. According to the Federal Division of Cotton Marketing the principal factors tending to sustain prices included the continuance of holding movement among producers, the small crop this season, a continued rate of mill ac- tivity at levels above a year ago and reports of higher prices for Indian cotton. Counterbalancing Influences. Counterbalancing influences were restricted purchases for domestic and foreign mills, lessened activity in cot- ton cloth markets and some weaken- ing in gray goods prices, and con- tinued low exports along with a de- cline in prices of other commodities and securities. OPERATING BANKS - WILLSHOW LOSS 1873 Are P]aced in Either Liquidation or Receiver- ship for Year. BY CHAS. P. SHAEFFER, | Assoctated Press Financial Writer. | Statistics show that a sharp reduc- tion in the number of banks operating |in the United States has occurred | during the present year. | Up to the end of October, 873 banks | were placed in either liquidation or in | receivership, while a total of 275 were described as “not licensed.” This lat- ter category includes those institutions operating on a restricted basis, Banks in Operation. | At the present time there are 15489 banks in operation throughout the | country. of which 15.214 are licensed to operate on an unrestricted basis. Broken down into the various classi- fications, it is found that there are 5,472 national banks operating 100 per cent with 15 in the unlicensed class; 973 State banks operating unrestrict- edly with 6 on the unlicensed list. and 8.769 non-member banks other | than mutual savings operating fully | with 254 unlicensed. During the first 10 months of this year, 378 national banks were placed in liquidation or receivership. For the purposes of comparison, there were operating in this country |a total of 19,163 institutions of all classes at the close of the fiscal year | 1932—a far cry from the peak total of 130,812 at the close of 1921. Rural Banks Mostly Fail. ‘The American Bankers’ Association | declares failure problem has been | chiefly one of small rural banks. Official studies over the last decade discloses that a very heavy majority of all the banks in the United State are in small towns and have an aver- age capital of about $44,000. Tt is imong these that most of the failures have occurred. M0ODY’S INDEX SHOWS | RISING BUSINESS TRENDS | By the Associated Press. NEW YORK, November 24.—Statis- tites appearing during the past week | indicated a rising business tendency, accordingito Moody's Index figures for | | production. and steel ingot output. | These index figures are adjusted for | seasonal variation—that is, if the change from the previous week should coincide with the normal seasonal change, the index figure would be un- changed. Stock Exchange Has Problem In Establishing Low Prices. By the Assoclated Press. NEW YORK, November 24.—The Stock Exchange has discovered it has a tough nut to crack in the matter of approving sources of low prices to serve as a basis for calculating mar- gins under the Federal Reserve re- quirements. The exchange never has accepted responsibility for the accuracy of the quotations appearing on the ticker. Recognizing the human tendency to err occasionally, it thus has avoided the possibility of suits growing out of ticker es. .In with Federal regulations, the exchange may, however, without accepting re- | sponsibility for accuracy, approve | sources to which brokers may lock for | their lows. Thus far three lists compiled out- side the field of the daily newspapers have been accredited. The exchange has taken the stand the newspapers may receive similar approval by pub- lishing monthly tabulations. The three agencies f accredited lists have been settling differences among themselves to arrive at a uni- form low price. 2 | freight car loadings, electric power | CHANGE OF MOOD, NEW CONFIDENCE REVIVE BUSINESS Really Increased Volume of Trade, However, Not De- clared Reached. WILL TO GO FORWARD IS DECLARED EVIDENT Retail Trade Ahead of Last Year and More Spending Is Cited. BY CHARLES F. SPEARE. Special Dispateh 1o The Star. NEW YORK, November 24 (N.A. N.A.).—The important thing going on in the business life of the country today is the change of mood and the reawakening of confidence, Except in a few instances, this has not so far been translated into larger volumes of trade. It is true that this week iron and steel production is at the highest level since June, but it is still so small that the industry can only be described as “depressed.” Elec- tric power output for the week ended November 17 was in excess of any week since January, 1931. It does not cover a typical week, however. On the other hand, car loadings are dis- couraging to traffic managers, employ- ment lags, relief totals rise and higher taxation to meet emergency expendi- tures is inevitable. However, there is the will to go for- ward. which contrasts with the un- willingness before election to move at all. Those who cannot or will not see any change in the national psychology term all the activities to promote re- covery “ballyhoo” and predict a speedy return to the condition of doubt and * l distrust that obtained before elec- tion. But they cannot challenge the figures of a retail trade that is run- ning 15 to 20 per cent ahead of last vear—all of which is not by any | means due to Government doles. More people are now spending because they jare more confident of their future, and more business men are preparing to start up in the face of recognized uncertainties and in spite of the fact that they may not make an accepte able profit on their turnover, Trade Charts Show Rise. The banking and merchandising in- terests are in closer co-operation with the Government than they have been since March, 1933. They have reason | to believe that the administration is primarily concerned with creating and maintaining recovery and will re- sist all political trends that tend to defer it. It is significant that the charts of business reflect a slow growth of volume, week by week, and that the total of new building con- struction is steadily rising under the influence of intelligent promotion of the housing program. The prospect of an extended period j of low interest rates and the lack of new supplies of acceptable securities have forced institutions again to enter the market for listed bonds. Conse- quently, the average price of this group is approaching the level of last June. It is a condition that has its duplicate abroad, where trustee issues | are quoted at such small yields that an overflow into the market for indus- trial shares has developed. This may | be the final outcome here. For there is an increasing discrimination against lmmhc utility and railroad securities, | although both are actually nearer their | intrinsic values than in years. The debenture bonds of the power and light holding companies this week have been under pressure, as well as | their preferred shares. Junior mort- gages of such railroad systems as Chi- cago & Northwestern, Chicago, Mil- waukee, St. Paul & Pacific, New York Central and New York, New Haven & Hartford have touched the low of the year. The utilities that produce, in contrast with those that manage, are not to be denied the right to earn the legal return on a fair investment in plant. It is not strange, however, that the question arises as to the ne- i v for present rates for service when these rates pile up such a large surplus in normal times. Telephone Dividend Problem. From what may be termed a politi- { cal point of view, the continued pay- ment of the 9 per cent dividend on American Teiephone & Telegraph capital stock appears unwise. “If." the utility commisisoner argues, “this company can afford this payment dur- ing a depression of great length and intensity, why cannot it reduce its rate: This is a logical question. It covers other situations in the utility industry. Payment of a dividend from surplus to the extent of about $100,000,000 in three years is a matter to be deter- mined by business practice. Some think it should be considered entirely from the stockholders' standpoint. But his status is that of an equity holder, not that of a creditor. The American Telephone & Telegraph Co. has direct obligations of $455,000,000. Bonds are 20 per cent of total A. T. & T. capitalization. The United States Steel Corp. re- duced its preferred stock dividend from 7 to 2 per cent. It has only 7 per cent bonds to 93 per cent stock. It is interesting to note that this week its preferred stock, paying 2 per cent, has been selling at 77 per cent of par compared with a price of par for the 9 per cent telephone shares. Perhaps corporation managements have developed a more sentimental in- terest in their stookholders and feel that if they are tc provide unemploy- ment insurance for their workers, they should also pension the owners of their properties. This involves no incon- siderable business risk. After all, the investor who is asked to take even 6 or 7 per cent on his stock in these times is lucky and should not com- plain. Anxiety Over Gold Bloc, { That there is deep anxiety here over | the position of the gold-bloc countries of Europe is undeniable. Their status is not accurately interpreted by the amount of gold held in their cen- tral banks. Prom this standpoint they appear invulnerable, The political and social currents in which the French, Belgian, Dutch and Swiss people are involved will, in the end, determine whether devaluation I8 (Continued ons‘nml Page.)