Evening Star Newspaper, December 31, 1934, Page 16

B e ST BUSINESS REVIEW, FARMER SURPLUS REMAINS DRAG ON MARKET 26,000,000-Bale Excess Not Likely to Be Cut Down Materially. (Continued From Page B-1.) of milk per cow, but the number of milk cows on farms did not decrease largely. It is pointed out that a de- crease is not necessary; that the de- mand should be increased by reducing the spread between farmers and re- tail prices, by distributing milk free to undernourished school children, and by Government propaganda to stimu- late greater consumption. The pos- sibility of declaring the milk industry & public utility has not yet been ex- ploited, but the trend of public opinion is not far from giving it support. Briefly, the outlook for the dairy in- dustry for 1935 appears to favor a con- tinuation of the moderate upwacd trend of the last two ycars. Prices of butter and cheese have improved, and the surplus milk situation of a ‘year ago is now non-existent. Income from meat animals and grains was naturally greatly restricted in 1934. Forced sale of live stock be- cause of the inability to furnish food and water did not yield large profits, both because of the glutted markets and because of the poor quality of the live stock slaughtered. Grains showed wide gains in price, and greater public participation in the commodity exchanges was evident than for many years. As Secretary Wallace pointed out, however, the drought proved a blessing in disguise for the grain and live stock farmers. reducing the enormous surpluses in one bold stroke. Mr. Wallace would like to see the 150,000,000-bushel carryover of wheat stepped up to 200,000,000 bushels next year, also a corn surplus of nearly 1,000,000,000 bushels to avoid a recur- vence of the feed shortage of this Winter. But live stock supplies are not so flexible; it will take years to build herds back to meet the demand. The poultry and egg industry standing somewhere in between the grains and meat industry in flexibility, has proved itself capable of working from over- supply to scarcity in three years. At present the statistical position of these branches is favorable to slightly larger incomes in 1935. Fruits and vegetables were not greatly hit by the drought, although some fruit trees were damaged in the previous Winter. A large de- mand for canned goods has been re- ported and canners are at present preparing for higher levels of activity in 1935. Greatest Problem Is Cotton. The cotton situation is the big fly in the ointment. Least important of the group in total income, the cotton farmer’s prosperity means a gerat deal to the South. In spite of the drastic reduction in cotton crops in 1934, it appears at present that the 26,000,000-bale surplus which has been hanging heavily over pres- ent prices will not be materially cut down. With 9,500,000 bales pro- duced in 1934, compared with 13,- 000,000 bales in 1933, domestic markets have shown re- luctance to absorb supplies at Com- | modity Credit Corp. supported prices. | Cotton is our most important export, normal foreign demand approxi- mating 7,500,000 bales yearly. But, since we refuse to lower our standard of living by selling at world prices, we must accept a reduction in our export business. There are large areas in India and Brazil which could be developed to produce cotton greatly in excess of present production. In fact, both countries have already made inroads on our markets. Forecasted production for in effect, is 13,000,000 bales; with the help of the Bankhead act the crop might be cut to 12,000,000. The most important problem we face at the present time is to determine at what price level the gross income to cotton farmers is largest, and to be content with that price. For instance, if we could dispose of the entire 13,000,000-bale crop at 10 cents per pound, the total income would be larger than that from 9,000,000 bales at 12 cents per pound; so much larger that the net income after production costs would be breater, and the South would maintain its position as the preferred area for cotton growing. Chart III shows the decline of consumption of American cotton here and abroad. Production relinquished to foreign nations does not come back readily. Once the facilities for growing are created, production will be continued at a loss for a considerable period before the land will be retired. There- fore it is in the interests of American agriculture to hold foreign markets for cotton as long as it can be sold at a profit. In his annual report, Secretary Wallace recognized this fact, but at the same time declared that the American farmer will not foreign and | 1935, | with the cotton crop control plan | (Continued From Page B-1.) number of Government employes in Washington, has increased buying | power, which will be reflected in the growth of the business of our mer- chants. “Real estate, particularly with re- spect to rentals, is in good condition, and during the year 1935 there should be a resumption of building activity, which, if accompanied by a demand for the purchase of real estate, should | do much to restore our general situa- tion to more normal proportions. “Assuming that the investigation which is being made at the instance of the President looking toward an adjustment of the Federal Govern- ment’s share in maintaining the ex- penses of the District government will result in a proper apportionment of such expenses, it is my belief that the year 1935 will see our city well on the way to a recovery to what might be termed more normal conditions.” Siddons Sees Slump’s End. Frederick P. H. Siddons, president of the District Bankers' Association, and secretary of the American Se- curity & Trust Co., made this fore- cast: “The people of ‘Washington, I am certain, are look- ing forward to even better times in 1935. As far as this city is con- cerned, the de- pression is near- ing its end. The final records of business for 1934 should show good results as com- pared with the past few years. F. P. H. Siddons. “The Benks in the city are prepared to co-operate in every possible manner in serving the individuals, firms, organizations and corporations. Credit is available to meet the demands for sound financ- ing. “If the general improvement no- ticeable in the last several months continues, I am confident that when the year 1935 ends, and we review its results that further improvements will have been made, but to accom- plish this requires the usual co-opera- tion in all lines of endeavor.” Faith in Banks Restored. Harry G. Meem, president of the Washington Loan & Trust Co., ex- pressed satisfaction with the progress that had been made during the year and confidence that the co-operation of industry and finance with the Government promised continued im- provement in the future. “One definite achievement,” he said, “js the restoration of faith in the banks as the depository of the peo- ple’s money, evidenced by the great increase in the depesits of the banks here and all over the country.” Mr. Meem said this could be ascribed to the Federal deposit insurance plan, which, with its present $5,000 maxi- mum, serves all practical purposes. “The prime advantage of this in- crease in deposits,” Mr. Meem added, “is that the banks are now in good position to extend credit to all quali- fied applicants and to ald business in its_efforts toward recovery.” Ord Preston, president of the Union Trust Co., in commenting on the outlook, said: “Probably there is no area in the country at this time as fortunate as the District of Columbia. Conditions in and about Washington are far better than a year ago due to the many and increased activities of the various Government agencies. The influx of new people has produced a healthy real estate situation and an increased volume of retail trade. “Unfortunately general business re- covery over the United States has been slow and disappointing. This is not difficult to understand when it is realized the Federal Government is now borrowing more than during the ‘World War, is spending more and that cut prices in the world markets in order to maintain production. This is one of the most burning questions of the day and a question on which there is & natural and honest dif- ference of opinion between indi- viduals. Balance Is Favorable. To summarize the prospects of agriculture for 1935, then, we can expect moderate improvement in prices and total farm income. Sup- plies, barring another calamitous drought which hardly seems likely, will be nearer to the normal figures, but short of the peak. In the case of cotton, there will be a large oversupply, which will create the greatest problem of the year. Domestic demand for agricul- tural products will improve through- out the first half of the year; beyond that it is impossible to predict with certainty. Foreign demand will be smaller. The American farmer in 1935 will approach nearer to his proper place in the economic pic- | ture. But the troubles of the Ameri- can farmer are not over. Petw Pear Message NATIONAL SAVINGS #* TRUST COMPANY desires to express to its thousands of customers sincere thanks for their valued patronage dvring the It joins them in past year. the hope for greater achievements during the year 1935, and to this end offers the services of the modern, fully equipped departments of this Institu- tion and tenders itself ready to undertake even greater responsibility and service in their behalf. Oldest Savings Depository in Washington 15th Street and New York Avenue bes 4T Capital Bankers Cite Gains ' In Real Estate Outlook Here the great tax-paying corporations are continually being regulated.” Edwin C. Graham, president of the Hamilton National Bank, called at- tention to the vast improvement that has taken place during the past year in business in this city, then added: “Bank deposits have increased quite considerably and the majority of the business houses report very substan- tial increases in volume and profits. “A survey of the real estate market discloses the fact that practically all apartment houses are filled and that there is a shortage in small homes. This would seem to indicate a revival in building operations in the Spring, and if this happens it would, of course, result in increased business for the building supply houses and the em- ployment of a great many people.” George L. Starkey, president of the National Bank of Washington, de- clared that “next year will be a bet- ter year than 1934. President Roose- velt is doing everything he possibly can to help recovery, but no one man can do it all. No sudden change is likely in the coming 12 months, but steady progress seems assured. I have sufficient faith in the American people to believe that the marked recovery in many lines in the last year will not be allowed to halt. The banks have am- ple credit for all of Washington's needs and are doing their part well.” Other Financiers Cheerful. Floyd E. Davis, president of the Lin- coln National Bank, is another opti- mistic financier. “If any one is doubt- ful that real progress is being made toward recovery he should check back over ,1934. Let him check back two years. His findings will end all argu- ment. This city is going ahead.” Francis G. Addison, jr, president of the Security Savings & Commer- cial Bank, is one of the most enthusi- astic financiers on the outlook for the Capital. With the present increased Ppopulation and broad gains in buying power, as well as real estate advances, he can see nothing but further ad- vances in 1935. H. Prescott Gatley, president of the National Savings & Trust Co., said: “In the past few months I have no- ticed many evidences of improvement. ‘There has been a notable return of confidence. With many others, I share the hope and belief that 1935 will see a continuance of these brighter conditions.” GAINS MAINTAINED BY LUMBER FIRMS Sure Foundation for Prosperity in Home Building Has Not Appeared as Yet. The lumber industry climbed out of the valley of economic destruction in 1933; during 1934 it held its gains, but did little more, declares Wilson Compton, general manager, National Lumber Manufacturers’ Association. “It is true that the production of lumber in 1934 was 16,000,000,000 feet as against 14,000,000,000 feet in 1933, and 10,000,000,000 in 1932 (record ‘low’ since 1869), but this increase was a contribution to economic under- balance rather than a real busi- ness gain. “The sure foundation of prosperity building, particularly residence build- ing—has not yet emerged from the morass of the depression. What build- ing there is beyond the barest require- ments of the feeble existence of the lumber trade is Federal Government work, direct or indirect. Private hous- ing reached the lowest third quarter level of the depression in the third quarter of 1934. “Attention must be directed to the fact that the lumber code has pro- vided a steadying influence. “Our industry, principal source of lumber-built), has the prospect of a great deficit of shelter to make up, be- sides a higher average amount of ad- ditional building than for years past.” SUSPENDED FROM CURB. NEW YORK, December 31 () — The New York Curb Exchange has suspended dealings in the old con- vertible preference and common stocks of Wayne Pump Co., due to the changes in capitaljzation and pending the filing of application for listing of the new capital stock. e e THE EVENING STAR, building material for housing (80 per | cent of all detached residences are | St OF fgures of trade revival. AMERIGA ESGAPES DANGERS IN 1934\ FOR ADVERTISING ¢ Inflation, Communism and Fascism Seen Averted Last 12 Months. (Continued From Page B-1) it had feared as a complement of the anticipated slump in Government bonds. Its problem has been to find a sufficient supply of good corporation mortgages to meet the demands of its many portfolios. Interest rates have been the lowest in 30 years. There is every expectation that they will re- main low for an indefinite period. The problem of the banks today, therefore, is less with their security investments than it has been in years. The thing that plagues them is the lack of earn- ing power on such funds as they have employed and the inability to put to work a portion of the $2,000,- 000,000 excess reserves of the Federal Reserve member institutions. Eleven months ago the dollar was devalued to 59.06 per cent of its former level. It has remained close to this value ever since. It is today the most stable of the world'’s currencies. There is frequent talk in Europe of further devaluation, but not in Washington. The banker, therefore, now has a pretty good idea of what his money is worth. Instead of losing gold to Europe, we have gained nearly $1,100,000,000 in 1934, including $200,000,000 in the last two months. This is a threat to Europe but not to the United States. Our foreign trade has not collapsed—in fact, it has progressed. The excess of exports over imports for the first 10 months of 1934 was $395,000,000, against $110,000,000 in the similar period of 1933. Controlling National Debt. As to Government finances. These have been admirably controlled, con- sidering the demands on the Treasury for emergency relief. It is true that the direct national debt now is over $28,000,000,000, a high record figure, with $3,000,000,000 of contingent lia- bilities in the form of Federal Farm Mortgage and H. O. L. C. loans and R. F. C. debentures, but the totals do not realize what had been predicted for this date. The deficlt is large. It could not be otherwise, if social disin- tegration is to be avoided, but neither the one nor the other constitutes an impassable impediment to recovery. The war debt in 1919 was nearly as great as now existing and it was re- duced to less than $10,000,000,000. Unfortunately, the one difficulty from which we have not escaped is unemployment. This is approximately as large as a year ago. It is esti- mated by the F. E. R. A. adminis- trator that there are 18,000,000 per- sons still on relief. The problem.of how to care for them is the one on which the philosophies of the admin- istration and of business groups dif- fer. It is the question whose deter- mination will most affect the immedi- ate trend of Government spending. It may prolong the period of a large Government deficit. As to recovery. This may be charted in the form of various statistics, none of them very convincing, though they exhibit a definite upward turn in many aspects of business life. More convincing, however, is the recent change in the attitude of both in the Ilumber industry—-extemivefthe business and banking worlds toward the purposes and policies of the administration. This has come since thr November election, which gave President Roosevelt proof from the people that they supported his major efforts and wanted them to continue. Consequently, individuals and groups of bankers and industrial- ists have gone on record as willing to te—in other words, to go along with the Washington tide in- stead of bitterly bucking it. This is the first great step that has been taken toward realizing recovery, and its significance is far greater than any A S S ESTIMATES OIL RESERVES. NEW YORK, December 31 ()—E. B. Reeser, president of the Barnsdall Corp., reported to stockholders that on November 30, 1934, the company's proven recoverable oil reserves in the midcontinent area were estimated at 33,000,000 barrels. Its California re- serves were estimated at 17,000,000 barrels. e Italy is the chief market for Ger- man medicines. VITAL ROLE HELD Guenther Stresses Impor- tance of Increased Budgets to Spur Business. Advertising will do its part in 1935 %o improve sales and earnings of indi- vidual industries, declares Rudolph Guenther, Albert Frank - Guenther Law, Inc. “General advertising, as it concerns the principal divisions of merchandising, has shown a respon- siveness to increased purchasing power during 1934 which is altogether en- couraging. “An indication of the confidence that is developing is the extent to which many corporations have in- creased their advertising budgets within the last year for advertising in 1935. “Probably no line of business bas been more severely affected during the past four years than the steamship companies, and yet they provide an outstanding example of energetic ac- tivity to obtain business in spite of the handicaps arising from decreased trade between nations. “Railrcads will probably do more ad- vertising in 1935 than for a number of years. The public must be edu- cated up to the fact that high-speed streamline and air-conditioned trains offer many advantages and that the former are safe. “After what has been said and printed about bankers in the last few years one must admire their patience and fidelity to the job which is theirs both by tradition and neces- sity. They must be expected to do more educational or institutional ad- vertising in 1935 than in 1934 to de- velop good will or counteract radical legislative efforts. “Further modification of the secur- ities act is desired in respect of ad- vertising. There is no reason why newspapers and magazines should be deprived of advertising due to restric- tions imposed by the securities act which today result in the public hav- ing less information about securities I'h"l it had before the act became aw., PROSPECT IN SECURITY MARKETS IS CHEERFUL By the Associated Press. NEW YORK, December 31.—The greatest chance for appreciation and income return on invested capital lies in the United States during the com- ing year, in the opinion of Floyd B. Odlum, president of Atlas Corp. “Prospects for 1935 in the American securities markets seem somewhat more promising,” Mr. Odlum observed. “There is evidence of a tendency to facilitate new capital issues. Many companies in every line of business need reorganization of capital struc- tures and working capital. Herein lies an opportunity for investment com- panies.” Best Wishes for the Coming Year Lincoln National Bank Seventh Seventeenth | | and and D Streets H Streets Serving the Public Since 1890 New Years Greetings from the entire personnel of BANK 'COLUMBIA NATIONAL As we enter the new year, it is with a sense of renewed responsibility, in maintaining a record of dignified, courteous service, established in 1887, and consistently fol- lowed, year by year. May we therefore express, at this time, our appreciation for past patronage, and ex- press a hope for renewed mutual benefits, between our clients and ourselves, during FRANK J. STRYKER 1935. President WASHINGTON, D. C, MONDAY, DECEMBER 31, 1934, 10 Per Cent Jump In Activity Likely Textile Mills ‘There should be at least & 10 per cent increase in textile mill activity in 1935 over 1934, declares Douglas G. Woolf, editor, Textile World, New York. “This is & conservative estimate. If it proves reasonably correct, it will mean that 1935 will be about & ‘nor- mal’ year, based on the 1923-25 average, “Textile mill activity in 1934 was some 15 to 18 per cent below that of 1933; final statistics are not yet avail- able. 1933, it must be remembered, was an unusual year, due to the first effects of the codes and the process- ing taxes. “At the beginning of 1934, I pre- dicted a decrease of 10 per cent from 1933; the difference between my esti- mate and the actual performance was due to the effect of the strike and to a certain amount of unanticipated buyer-resistance. “Likewise, profits in 1934 were below those of 1933. This is explained by the fact that inventory profits played & large part in 1933. 1935, in my opin- ion, should be a fair profit year.” COCOA STOCKS DROP. NEW YORK, December 31 (#).— Cocoa arrivals in the United States during 1934 totaled approximately 3,150,000 bags or about even with the movement of 1933, according to the New York Cocoa Exchange. New York warehouse stocks show a net de- cline of about 60,000 bags for the year. The price of spot cocoa advanced about four-fifths of a cent during the year to 5 cents a pound. New York Stock Exchange New York Curb Exchange Boston Stock Exchange B. DEYBER esident. M. M. HANNAY Vice President VICTOR Pri JACOB_SCHARF Executive Vice President GEORGE M. EMMERICH Becretary of Board Counsel and Trust Officer 'W.B.Hipps & CoM Philadelphia Stock Exchange Washington Stock Exchange New York Cotton Exchange Chicago Board of Trade American Bankers Association District Bankers Association Hibbs Building—725 15th Street Washington, D. C. TR TR T TR AR 11 R R '.'_'JS Cordial Greetings for the NEW YEAR SeEcoND NATIONAL BARK ©ORGANIZED 1872 EDWARD F. COLLADAY WAS;,“NGTON BUSINESS REVIEW. GETS PREFERRED PLACE BUT COTTON IS NEW DEAL INSURANGE HEAD FEELS CONFIDENT Stresses Large Gain in New Business and Fewer Loan Applications. “The encouraging improvement which has taken place in the general business situation during 1934 leads me to look forward to 1935 with con- fidence,” Thomas A. Buckner, presi- dent of the New York Life Insurance Co., declared in reviewing life insur- ance development of the last year. “During 1934 substantial gains were made in new insurance written. Lapses and surrenders continued to decrease, and applications for policy logns declined in number and volume. At the same time there was an in- crease in the repayment of policy loans previously made. “Cash income was high, reflecting in part the heavy demand for an- nuities. No doubt the chief reason for this was the fact that people recognized that well-managed life in- surance companies had demonstrated during the depression that they merited public confidence. “Owing to the more restricted sup- ply of conservative investments yield- ing a satisfactory return, a number of companies reduced the interest rate basis for future issues of annuities.” . France will spend 1,300,000,000 francs to electrify railways. | I S O o . 8 f < HIBBS SPAID W. CORBY CIAL _ PARTNER J. T. HENDRICK W. B. w. W K. BPE! ;g H WALTER_W. MARLOW ier Cash! J. K. SEYBOTH Assistant Cashier FREDERICK S. BEYER Assistant Cashier JOSEPH R. FITZPATRICK nt Cashier Assistas §. OGILVIE STU. Assistant’ Cashier RALD E. KEENE Assistant Cashier PUZZLE Drug Sales Likely To Be Best Since 1929 in Next Year Special Dispatch to The Star. NEW YORK CITY, December 31.— Sales of household remedies and toiletries in 1935 will be the best since 1829, it was predicted today by Robert E. Lee, secretary of the Vadsco Sales Corp., in discussing the outlook for business in the coming year. The Vadsco Sales Corp. through two of its subsidiaries, the American Druggists’ Syndicate, Inc., and V. Vivaudou, Inc., is a large factor in both industries. Preliminary reports indicate, Mr. Lee sald, that business in 1934 was equal to that of 1931, and there is every reason for believing that it will be even better in the coming year. “The holiday trade was encouraging in the extreme, and proved that the public has money to spend and will spend it {if properly approached nn:;vulh merchandising and advertise HARDWARE ACTIVITY PREDICTED IN MARCH By the Assoclated Press. NEW YORK, December 31.—The hardware outlook fz: ii.e Winter sea- son, says Dun & Bradstreet, does not indicate any material change over pre- vailing conditions, but an active mar- ket is expected to develop early in March, with some new peaks to be recorded for the trade during the last half of 1935, provided the planned building programs be inaugurated. Season’s Greetings Every Banking Facility ¥ 15th & Eye Sts. N.W. IN ONE HUNDRED YEARS, 76,000 DEATHS IN MARINE DISASTERS IN THE WHOLE WORLD! IN THREE YEARS, 96,300 DEATHS IN MOTOR VEHICLE ACCIDENTS IN THE U.S.A. ALONE! Published in the interest of street and highway safety by