Evening Star Newspaper, June 30, 1936, Page 15

FINANCIAL, RECOVERY’S STRIDE R TRADE RISE PACED BY STOCK MARKET IN LONG UPSWING Thirteen Months’ Advance: Coincides With Trade Improvement. BY GEORGE T. HUGHES. ®recial Dispatch to The Star NEW YORK, June 30.—The stock market history of the last six months falls naturally into three phases. Pirst, there was a continuation of the long rise that started in March, 1935, and ran roughly for 13 months, almost without interruption, cul- minating in the first week of April, 1936. Neéxt there was the reaction which ‘was very sharp and ran approximate- 1y to the first of May, and finally there was & slow, halting and hesitant recovery which by late June had re- placed practically all the ground lost taking the list as a whole. The market was still in a testing stage, with the indications favoring another upward movement. The 13 months’ advance was one of the most persistent in the history of the exchange. It kept up long after experienced traders had predicted a break. Measured by standards of the past, the rise was accomplished on moderate volume, although compared with the turnover that obtained after the reaction, it was large. Adequate explanation for the appre- ciation in prices was found in the progress of business and the best rea- son that could be assigned for the lack of intermediate setbacks was the effect of Government control. That factor became more potent later on, but it was prominent in the entire period. Market Break Expected. For the break, the commonly ac- cepted cause was simply the extent of the previous rise. The only surprise the professional expressed was that it had not come sooner. Incidentally, as usual, those prepared for it were in the minority. While it lasted, the decline was precipitate. Between April 6 and April 29 the Dow-Jones industrial averages broke more than 18 points and between April 13 and April 29 the railroad averages dropped more than 8 points. Now coming to the third period, that of recovery, the chief feature was the drop in volume. In March, when prices were going up, there were 11 sessions with a turnover of 2,000,000 shares, some of them close to 3,000,000. There were 12 days with volume run- ning over a million shares. In April there were only six days with trading of more than two mil- lion and 16 days with volume between one and two million shares. In May, however, there was no two-million- share day at all and only 8 that ran over one million. In June business dropped off almost to the vanishing point. Control Reduced Volume. These figures on volume, it must be noted, do not have the significance that they would have had in pre- Government-control days. On April 1 margin requirements were jacked up for customers borrowing of bro- kers and, on May 1, they were raised for brokers and others borrowing of the banks. There can be no doubt that the loss of business on the exchange was due in large part to these restrictions. Otherwise the interference would be that the outlook was unfavorable, for such a sharp decline in volume on a recovery would indicate loss of con- fidence and forecast a renewal of the reaction. ‘While the margin innovations had a good deal to do with both the break and the loss of business on the ex- change, there were other factors at work. In early April the European crisis was at its height. Relations between Great Britain and Italy were strained to the breaking point and predictions of another World War were heard on every side. This un- doubtedly had an adverse effect on prices. | Legislation Feared. At that time, also, worry over the political outlook at home began to show itself and finally there was the renewed threat of legislation at Wash- ington adverse to business. One other influence that worked against the market was a slight falling off in business and an uncertain trend in commodities. The interesting thing about all this is that in a general way the London market followed the same course. If the price curve of typical British stocks is plotted on the same chart with that of the movement of Amer- ican equities, a striking correspond- ence will be revealed. The advance on the other side began a month later than it did here. British prices initiated their rise in April, 1935, whereas our market turned in March of that year, The top in Great Britain was reached in late Feb- ruary, 1936. In this country the peak ‘was touched in April. The differences, however, are relatively unimportant; the correspondence is the real feature, ‘The suggestion is, of course, that in both markets world conditions, rather than national developments, were the fundamental influences. Franc Unsettled Market. One particular foreign situation was the cause of perennial anxiety. The periodic crises to which the French franc was subject almost invariably unsettled the New York market. The connection was not perfectly logical for, in the long run, franc devaluation must be constructive. It was a theory widely held, however, that readjust- ment of the gold parity of the franc ‘would mean an abrupt withdrawal of French capital from this country in- volving liquidation of American secur- ities bought for French account. With unfailing regularity this spectre was Taised. It was known that there had been heavy foreiy. buying of our stocks for months past, supposedly for more or less permanent investment, but Guite possibly simply for temporary employment pending the restoration of financial order on the continent. ‘There can be no doubt about the large | amount of: foreign buying, but there is no assurance as to the motive. The best information is that the bulk of it came from Londcn based on the belief that erican equities were under- pri in relation to similar ‘Bfld&h shares taking into account the prospec- (Continued on Sixteenth Page.) i {AP AVERAGE OF 60 STOCKS' 'WEEKLY) Following the 13-month advance of the Associated Press average of 60 stocks—the longest unintgrrupted upswing on record—profit-taking dropped stock prices in April by more than 10 per cent on the average. Recovery since then has brought the price level up to within a fraction of the year’s high. THE EVENING SLUMP RECORDED BY COMMODITIES WITH A. A. A. GONE Drought Conditions Bring Upward Swing Late in Half Year. BY A. A. PATTON, (Associated Press Statistician) NEW YORK, June 30.—The hover- ing threat of increased supplies bore down on commodity prices in the first half of 1936. ‘When A. A. A. was supreme-courted out of existence, removing a prop from farm prices, the logical market reaction was a drop in quotations. The inevitable tendency in that direc- tion was postponed, however, by shortages in some staples resulting from transportation snarls through- out the snow-bound Middle West, bringing sharply higher prices in mid- February. Reaction Comes Late. The Associated Press weighted i dex of wholesale commodity prices | reached a peak of 78.17 on February 14, more than 30 days after the A. A. A. overturn. Largest gainers during the period were eggs, coffee, rubber, | hogs, rye, steel scrap and lumber. | Curtailed production of the Na- | tion’s major staples under Federal | control in 1935 stimulated prices. | With the brakes released by the Su- | preme Court, the high levels then existing led producers to plan larger | outputs for 1936. | These impending supplies resulted in a steady chipping away at val- | ues during the next three months, | driving the Associated Press index to 71.31—the low for the year to date— almost 9 per cent under the year's high. Drought Buoys Market. Prices stabilized from May 11 to June 15, the index swinging between | 7198 and 71.31. Drought conditions prevailing over large sections of the country finally acted to buoy quotations, the index breaking out of its narrow range and crossing the 72 mark June 16. The extent of the rainfall deficiency this year is indicated by the fact that Texas, Iowa, Illinois, Minnesota, ©Ohio, Nebraska, Wisconsin and In- diana—Ilargest farm income producers in the Middle West—all had sub- normal rains. Non-ferrous metals constituted the only group in the index able to chalk up a gain during the first six months. Live stock price indices de- clined 13 per cent; food, 11; textiles, 10; agricultural,9, and industrial, 2. Cattle Prices Off. Cattle prices slumped more than one-third during the half. Underlying the setback was cheap corn for food in 1935 and the resultant large crop of good quality beef that has moved to market this year. Wheat quotations were slashed dur- ing the period. Larger plantings and a better Winter wheat yield outlook foreshadowed a crop considerably above normal requirements this year. The serious moisture shortage in the Dakotas — largest Spring wheat States—has acted to turn wheat prices up in the past 30 days, although this crop normally accounts for less than 20 per cent of total wheat harvest. Other percentage declines included: Turpentine, down 22; hides, 17; flour, 20; butter, 16; eges, 15; silk, 18, and lard, 11. Cotton cloth slipped back 16 per cent- with large mill stocks and no apparent let-up in production sched- ules responsible. Scrap Steel Soars. Steel scrap prices rose to the high- est level in six years during March, with steel mills booming. Quota- tions have been giving ground steadily for three months, however. Also in the losing column were tin, oats, cotton, cement, bituminous coal, linseed oil and burlap. Five of the seven commodities reg- istering largest advances for the pe- riod are imported—cocoa, sugar, rub- ber, antimony and coffee. The prac- tical reason in each instance is that the producing countries have taken a firmer grip on output than pre- viously. Other commodities showing im- provement were petroleum, lumber, rayon, wood, eggs, lamb, rye and corn. VALSPAR CORP. EARNS $66,932 IN HALF YEAR Special Dispatch to The Star. NEW YORK, June 30.—The first financial statement of the Valspar | Co: Corp., manufacturers of paints and varnishes, since the completion of the company’s reorganization in De- cember, 1934, shows net profit after ali charges, including Federal and dominion income taxes, of $66,932 for the six months ended May 31, 1936. This compares with a net loss of $139,954 for the corresponding period of 1935. The profit reported for the first half of the current fiscal year reflects operations under a new management which took charge of the company at the end of last year. : =3 FIRST SIX MONTHS' AUTO PRODUCTION EQUALS 1931 TOTAL |Output at 2,500,000 Mark. Nearly 4,800,000 Likely by End of Year. BY DAVID J. WILKIE, Associated Press Staff Writer. DETROIT, June 30.—The motor car industry crosses the midyear indus- trial meridian with a six months’ pro- duction of approximately 2,500,000 cars and trucks behind it and every indication pointing to an aggregate for the year close to 4,800,000 units. The 1936 six months' output is al- most exactly the total the automobile | assembly plants turned out in the | entire year of 1931. Executives of the industry, review- | ing activities at the half-way point, | see something infinitely more gratify- ing than the return of consumer de- mand that requirea the production of s0 many units in the first six months. TRUCK OUTPUT NEAR PEAK IN FIRST SIX MONTHS EACH SYMBOL = 30000 TRUCKS D «D oD & "D D "% &3 o & P D P & RRRRBRARRARRRANA" IBRAREARANAR 1929 1930 1932 1935 1936 Booming along at the best levels since 1929, preliminary estimates of truck production for the first half of this year total 450,000 units. They claim a substantial success in ironing out the traditional peaks and valleys in factory activity, which in past years produced a shortage of workers at one period and heavy un- employment at another. Replacement Market Seen. A majority of executives are con- vinced the upturn which took on ad- ditional impetus this year will carry | on throughout next year, and while | no authority among them cares to attempt an appraisal of potentialities beyond that point, they count heavily upon the obsolescence of older models to provide a huge replacement market. Coupled with the effort to stabil- ize employment in the motor indus- try was the plan, effectuated last Fall, of introducing new models in No- vember, traditionally the beginning of & “lean” period in automobile as- sembling and distributing. That the plan maintained employment through the Winter months is the most obvious fact about it. Attack Used Car Problem, It was a revolutionary move, and there are those among the industry's leaders who believe something equally drastic yet may come to definitely dispose of the perennial problem of the used car. Already considerable progress has been made by apportion- ing deliveries of new cars on the basis of old car movements by individual dealers. Some idea of what the assembly of two and one-half million motor cars means is shown in the fact that the 2,472,359 units produced in 1931 had a wholesale value of $1,426,- 656,252 exclusive of tires, parts and accessories. Because the industry has concentrated on volume distribution, the wholesale value of the output from January to July this year may be slightly less than that, but it will be a very small difference. e D. F. WHEELER TO JOIN STOCK EXCHANGE FIRM S eclal Dispatch to The Star. NEW YORK, June 30.—Arrange- ments are being completed for the admission of Douglas F. Wheeler as & general partner in the New York Stock Exchange firm of Alexander Eisemann & Co., effective July 1. Wheeler, a retired capitalist, is the former owner of the Wheeler Schebler Carburetor Co., which was acquired from him in 1920 by the Borg Warner Tp. In his new connection, Wheeler will devote his attention principally to investment banking, marking a further extension of the firm’s activi- ties in that field. Sl DIVIDEND IS ORDERED. MINNEAPOLIS, Minn, June 30 (Special).—General Mills, Inc., has announced & dividend of 75 cents per share upon its common stock, payable August 1, 1936, to common stockhold- ers of record st the close of business July 10, 1036, - @ ST. AR,. WASHINGTON, 'D. C. TUESDAY, < STEADY ADVANCE ON BROAD FRONT SEEN N CAPTAL Clearings, Deposits, Retail Sales, Building and Other Lines Climb. BY EDWARD C. STONE. Waghington enjoyed steady and substantial improvement in business and financial conditions in the first half of 1936. Bank clearings, bank deposits, retail zales, building permits and many other busmmess indicators, which climbed higher and higher in the latter part of 1935, have kept up the advance almost without interruption in the first six months of this year. ‘The Capital has experienced more stable business conditions than any other city in the country, the reason as usual being the huge constant Government pay roll. Figures have not been completed on total department store sales in the first half, of this year, but they will be notably ahead of the like period in 1935. In the first five months, retail sales in Washington stores were 12.4 per cent better than a year ago. In May they were more than 13 per cent above May, 1935, Added to these definite reports are weekly summaries for the first three weeks of June. They were all ahead of the corresponding weeks in 1935, enough ahead of last year to indi- cate an advance of about 15 per cent for the six-month period over the first half of 1935. The percentage figure may be even higher when the final total volume is available. Exchange Trading Heavier. On the Washington Stock Exchange the volume of trading in the first half of this year was well ahead of the like period last year. Trading in the bond division in the first half of 1935 totaled approxi- mately $258,400, while the bond turn- | over so far this year has reached more than $329,000. This involving trading in a large number of different issues. The demand for bonds has been strong, prices have also been firm, in some instances higher than at the beginning of the year. | Trading in stocks has made a simi- larly striking showing in the six | months, Here, too, volume has | mounted steadily. A year ago trading !in the six months about 7,200 shares. | |So far this year the turnover on | | the Washington board has exceeded 11,000 shares. Interest in the Ex- change has been at the highest pitch | |in years as attested by attendance | at the daily sessions. Some months ago there was the largest increase in | | membership recorded in a long time. | The new members have proved s | | great addition, as they attend the | noon sessions in the Washington | Building every day. | The largest turnover in any issue in the last six months has been in Capital Transit, now selling at 15'%. Next in share demand has been | Mergenthaler Linotype, which reached 7 in the last few days. Washington | | Railway & Electric preferred has | taken third place in the total share turnover so far in 1936. These broader | and more active markets are held by | Exchange officials to indicate clearly |an improvement in the financial situation in the Capital. Bank Clearings Climb Here. To date in 1936 bank clearings have scored notable advances every month. In April the Washington Clearing House Association reported clearings had passed the $100,000,000 during the month for the first time in several years. RESIDENTIAL BUILDING |936b h h ] wsh B’ 1932 b } FARM INCOME ws MRRRR R 1936 D VEND DEND DEN 1935 R 19328 EACH SYMBOL =7.000 CARS with 1935. tion, Cram’s Reports. EACH SYMBOL = $100.000,000 sl bbbbbbhbbb 1929 [FEED D VNN DNND DEND DEND DEN) BEN JUNE 30, 1936. FINANCIA ® | STEEL OPERATIONS mnlflilflfifll ws N N0 AW o MR R R R R A 1932 8 fl R fi iucu SYMBOL = $500,000,000 e RARRRARRARA FREIGHT CARS ORDERED 1932 S Sam & BUILDING SCORES [ 26 PER CENT GAIN Residential Construction Climbs to Best Levels Since End of 1931. BY RADER WINGET, Associated Press Financial Writer. NEW YORK, June 30.—The unprece- dented peace-time drive for public and private construction during the first half of 1936 produced the greatest ac- celeration of building since the de- pression halted the forward strides of the gigantic industry. Residential building, upon which Government and civic organizations have exerted the most pressure, re- sponded by rising to the best levels since the end of 1931, as measured by the Associated Press index. Percentage-wise, the showing is phenomenal. The estimated volume for the first six months of 1936 is half again as great as for the first of last year and nearly double the initial part of the 1932 depression low | point. Shortage Spurs Home Building. In dollars, however, the building of private homes so far this year totaled about $320,000,000, compared with more than a billion dollars for the corresponding period of 1929, Nevertheless there is a distinct shortage of homes. Real estate au- houses unless building picks up sharp- ly. private enterprise has erected RESIDENTIAL BUILDING ORRECTED FOR SEASONAL VARIATIO * AND MATERIAL COST 1929-30 =100 Each month this year has seen clearings pass the mark set in the | corresponding month last year. To | many merchants and bankers, clear- | | ings are- considered the best known indicator of what business is doing. | Clearings in Washington in the | first half of 1934 were way ahead of 1933. In 1934 they were nbove 1933, and in 1935 much better than in 1934. Thus, the gains in 1936 re- | veal great progress over a four- | year period. Checks canceled by the Washing- ton Clearing House up to the be- ginning of June totaled $446,055,076, against $360,041,780 a year ago. | Weekly reports in June have shown | proportionate advances. Furthermore, these figures do not give quite all the picture as the bonus bonds are cashed at the Treasury, and have little to do with clearing house totals. The bonus money, however, is affecting retail trade in a favorable way. Back 4bills are also being wiped off the slate. Deposits in Banks Also Gain. Deposits in Washington banks in the first half year have also attained marked gains over the same 1935 pe- riod. In the first three months of this year deposits in 22 Washington banks jumped more than $34,000,000 above the aggregate deposits in the banks here on the same date in 1935. In the first three months of this year clearings gained $16,000,000 over the first quarter of 1935. The banks are still loaded with money. The usual June 30 call by the controller is expected shortly. On March 4, this year, bank deposits totaled $310,007,305.89. ‘That high mark may not be reached on the coming call, on account of the personal tax, which always brings about a temporary reduction in ag- gregate deposits. It will be far ahead of last, indicating further recovery progress. Other barometers, such as real estate building permits, indicate the same business gains here. As noted in The Star’s real estate section, build- ing permits so far this year have sur- passed last year's figures, particularly good progress being noted in resi- dential building. The amount of new life insurance and other insurance written so far this year has been much better than last year. With one exception, much more life insurance has been sold each month than in the first half of 1935. Postal receipts at the City Post Office, the number of new telephones installed and number of calls made have put last year's figures in the shade. The electric power output re- ports indicate the same uptrend. Further Advances Forecast. Karl W. Corby, president of the Dis- Booker, president.of the Washington Booker, t ; Thomas C. Montgom- ery, president of the Washington Bond -~ 71 AS After resting in their for- ward movement during the first quarter this year, resi- dential construction contracts stepped up sharply in the second quarter, F. W. Dodge figures indicate. model homes, corporations have of- fered pre-fabricated dwellings. Public building has progressed slowly. Federal projects added to the total. Private industry turned again to expansion programs which include more and bigger buildings. Total Far Below 1929. Estimates show that in first half of the present year contracts were let for buildings valued at $1,100,000,000. ‘That gross is 58 per cent higher than the corresponding period of last year, which in turn was 61 per cent higher than the 1933 comparative. But it stands well below the total of $3,- 012,200,000 registered for the January- June period of 1920. ‘The most encouraging hopes are aroused by residential building. Ex- perts significantly point out that higher rents will make it cheaper to build. _— NEW-HOME BUILDING CLIMBS 114 PER CENT By the Associated Press. Based on permits in leading cities, the value of new residential building in the first five months of this year increased 114 per cent compared with the like period last year, the Labor Department reports. president of the Ticker Club, consider the progress made in the Capital so far this year as highly encouraging. The number of new issues has cheered up the bond dealers to a high pitch. Brokers would like to see vol- ume on the big exchanges increase, but at the same time are pleased with the action of bond and stock prices. It has been a good half year for ‘Washington. Furthermcre, bankers, business men and others say they see no reasons right now why the im- provement shouid not continue, e G L \ thorities have warned that the Na- | tion will face an embarrassing lack of | BY FRANK MacMILLEN, Associated Press Financial Writer. NEW YORK, June 30.—Clockers putting the stop watch on the 1936 economic race at the half-way mark generally felt the country had taken depression lows without a serious break | in the recovery stride. | ‘War in Africa, touch-and-go threats to peace and recurring economic crises in Europe and, at home, the worst floods of a decade, destructions of a | “political” year and prolonged debate | on higher taxes—all flashed past in a | fast moving six months. Yet the end of a potentially disturb- ing period found automobile and steel | operations highest in seven and six | years, respectively, and markers of still | depressed heavy industry like freight car buying up 325 per cent over the first half of 1935, machine tool orders 71 per cent ahead and building con- struction to the good by 58 per cent. Market Off Temporarily. Even Wall Street, its fingers neces- | sarily more accustomed to counting | | the worsd pulse than other sectors, | | came off well in its contest with | threatening outside forces, buoyed by the steady surge of domestic busi- ness life. A generally threatening European | outlook as observers awaited the late April French elections, which resulted | in a swing to the radical parties, increased Wall Street fears of a Frenc] | gold embargo, played an important | part in touching off the first major | share price recession in more than a year. Equally a factor in the short but sharp interruption to rising prices, stock market observers generally | thought, was the duration and ex- tent of the preceding rise which in- SATISFACTORY NETS SEEN FOR CANNERS | | Keep 1936 Pack Below 1935 \Overproduction. Epecial Dispatch to The Star NEW YORK, June 30.—Prospects for the 1936 canning crop point to satisfactory earnings for canners, with no material price declines from now on. This year's late frosts and droughts in various sections of the country, rainfall in others, should keep the 1936 canning pack below the 1935 overproduction level. It is further pointed out in a new study of canning and can manufac- turing, appearing in Poor's Industry and Investment Surveys, that rising increasing consumption trend. “Earnings for canning companies, being dependent upon crop conditions and consumer trends, will continue to show wide swings from year to year,” continues the study. Despite the im- proved methods of providing urban markets with fresh vegetables throughout the year, it is probable that canned foods will hold their own because of the attractive variety avail- able the year around. Given a fair legislative break, the firmly entrenched canning companies, strong financially, should continue to prosper, although earnings will fluctuate with crop conditions.” —_ FORDSON COAL SELLS POND CREEK PROPERTY By the Associated Press. "I’MVILLE. Ky.,, June 30.—The nsfer of part of the Pond Creek Mine from the Fordson Coal Co., a Henry Ford enterprise, to the Eastern Coal Corp. was revealed in a sales agreement on file in the office of the Pike County clerk’s office. ‘The agreement did not specify the amount paid down, but showed that an additional $1,140,000 is to be paid over a period of 15 years. fer to the new concern “all its tangi- ble, visible property in Pike County, Ky, other ‘than unimproved real estafe.” The agreement was dated June 3. ELECTED VICE PRESIDENT. HYATTSVILLE, Md., June 30 (Spe- cial).—Ernest F. Gasch of Hyattsville has been el vice president of the Hyattsville ing Association to succeed Alexander Gude, who died re- cently. Stephen A. Miller of Chillum has been chosen a director to succeed Late Frosts and Droughts Should | | private building and plant modern- business activity should maintain an | wS§I3948898! AUTO PRODUCTION 1936 Sy Sty G Sy Sie Gy 6 1935 iy Sl finwy Glamy Situy S TORG Sy e, gt e, e, gimwe, S, w5 EACH SYMBOL = 400,000 CARS The charts above show some of the factors contributing to the 15 by the Associated Press index of industrial activity during the first hal, The 1936 figures partly are estimated. Sources are: Residential building, F. W. Dodge, Jarm income, Department of Agriculture; freight cars ordered, Railway Age, steel operations, American Iron and Steel Institute; new capital financing, Journal of Commerce, auto produc- rge of Domestic Industry Ignores Floods and Politics some of the toughest barriers since the | out the April break. The reputedly | | showing their wariness chiefly in| | sharply | mobile models in the Fall instead of | | fatter pocketbook, added brisk Spring ! | orders to excellent Autumn response. | a total estimated at $3,200,000,000 | against $2,957.000,000; about a 10 per | cent boost in pay rolls, which brought | | 1932 m m * EACH SYMBOL=10% OF CAPACITY A LL LT EETTT NEW CAPITAL FINANCING EACH SYMBOL = $400.000,000 er cent gain sustained of this year, compared ;) duced many holders to cash paper | profits. Stocks Demonstrate Resiliency. As the midyear approached, how- ever, stock prices had demonstrated | their resiliency by almost wiping shrewd traders of Wall Street were | curtailed activity in the L. EMAINS UNBROKEN AT HALF-YEAR MARK Business in the First Half of 1936 BUSINESS INDEX 5 HIEHEST SINCE 1929 DURING JUNE Exceeds Many Estimates, Appears to Reflect Per- manent Trend. BY CHARLES F. SPEARE. Epectal Dispatch to The Star. NEW YORK, June 30.—If the pres- ent index of business production is compared with either that of 6 or 12 months ago it will be found to have advanced sharply in both periods. ‘The rise in the first half of 1936 has not been so striking as that in the last half of 1935, nor could it have been expected to be in view of the recovery that had gone before. However, it has exceeded the esti~ mates of many and appears to be reflecting a rather permanent trend. It is significant, for instance, that during the sharp decline in the price | of speculative securities in March and April there was no suggestion that this was retarding the volume of dis- tribution in either retail or wholesale trades. During June the business index touched the highest figure since 1929, in spite of the fact that, in several important directions, such as iron and steel, railroad carloadings and building construction, the lag was conspicuous when compared with that of the auto- mobile, the electric power, the retail trades, including department stores, chain stores and national distributors. However, one of the best features of the current situation is the steady regaining of position by the durable goods trades, for with it there is the prospect of reducing unemployment, and thereby bettering that phase of the national economic and social sit- uation which involves the greatest problem before the country. See Era of Recovery. In the past six months there has been a gradual merging of the opinions of people toward the convic- tion that business is in line for a considerable era of recovery. This is due somewhat to the fact of recovery markets. Department store sales topped the same period in 1935 by about 8 per cent and were about 32 per cent . ahead of the worst depression levels, | while some large mail order and chain | merchandisers reported late Spring | volumes as best in their histories. i America apparently took to the| novel system of offering new auto- at the first of the year and, with a | Farm Income Up. These and similar barometers of | public buying cleared rapidly under the sunny influence of a 12 per cent addition to farmers’ income in the first half compared with last year, to itself and to the absence of apprecia- ble response to conditions here and abroad that might be expected to cause either a decline in industry or less inclination on the part of indus- trial leaders to make commitments. The distribution of the soldiers’ | bonus money has, of course, been a factor making for activity in busines This, however, is a passing phase; not one on which judgment of the futurc of industry is to be based. The fundamental fact in the recovery | seems to be that of an unfilled de- mand for goods that have been with- held from the consuming public for a long period of time and which the public now has the ability to buy or is willing to buy after being satisfied that there is no further danger from & national economic crisis. | It has been the history of the ma- | jority of presidential years that busi- | ness is but moderately affected by them up some 84 per cent or more and from the 1932 worst, and a 4 per cent h | calculated increase in factory employ- ment from 1935 to 1936. Unemployment, however, remained. The jobless army was variously set, in the absence of a definite count, at 7,000,000 to 10,000,000, or even more. As an antidote to this, many busi- ness analysts looked chiefly to the quickened pace of the capital goods industries. Automobile buying of steel, which made the first breech in the log jam of the heavy lines, no longer was the only encouraging factor in this picture, Capital Goods Respond. Hopes, in addition, pinned on a real revival of materials buying by the railroads, which were backed by the rising curve of traffic, ization, promoted by better business profits, and the ease with which big industry could obtain funds in a glut- ted money market, The crux of the situation, observ- ers said, was mirrored in Standard Statistics’ index of capital goods pro- duction, the Ilatest compilation of which stood at 71.0, with 1926 being calculated as 100, while the consumers base was 101.9. At the same time, optimism was derived from the fact that the first half of this year showed a lift of 38 first half of 1935 and of 93 per cent from 1933. —_— PORT AUTHORITY BACKS STORE-DOOR PICK-UP By the Assoctated Press. NEW YORK, June 30.—The Port of New York Authority, whose activi- ties include operation of the huge Union Inland Freight Terminal, has indorsed the proposed store-door pick- up and delivery system of freight handling by the Eastern railroads. At a continued hearing before In- terstate Comerce Commission Exami- ners H. M. Archer and Howard Hos- mer, the authority’s counsel, Wilbur Lavoe, stated it favored the plan, “with an allowance high enough to induce shippers to handle their own freight if they so desire.” He also requested that the port au- thority’s freight station be included in the proposed tariffs. MANUFACTURES GAIN IN MAY EXPORT TOTAL Py the Assoctated Press. Finished manufactures accounted for 52.4 per cent of domestic exports in May, compared with 50.7 per cent in the same month last year, a Com- merce Department notes. The value of finished manufactures exports increased to $103,245,000 from $81,042,000 in the 1935 month. —_— ARGENTINA REVEALS EXPORT TRADE BALANCE By the Associated Press. NEW YORK, June 30.—Official for- were being | eign trade figures disclosed Argentina had an export balance of trade amounting to 22,000,000 pesos ($7,330,- 000 at the 6fficial rate of exchange). Mr. Gude and George N. Bowen of University Park has been named to Mr. Gude's place on the Appraisal Committee. 1 for May, cable advices to the Argen- tine Information Bureau said. Exports the campaigns and platforms of those | years. There have been intervals | in many presidential years when vital | political or economic questions have | led to acute disturbances in industry and in speculative and investment markets. This may reoccur for a time within the next four months. However, confidence prevails that, ! after the electian, regardless of which party prevails, there will be a steady | broadeni=g out in the fleld of industry | with sections of it that have been back- { ward becoming more active, banks | giving greater credit accommodations | and, with it all, a rising average of security prices. Europe, the Unknown Quantity. The unknown quantity in this sit- | uation is that of European politics | and European credit conditions. Po- | litically, the outlook abroad is rather | more pacific than it was at the end of 1935. On the other hand, the | growth of radical political factions on the continent of Europe, with ex- amples of it in PFrance, Spain and Belgium, does not make for financial stability. In the last three months France | has lost 15 per cent of her gold re- | serves, following a heavy reduction |in it during 1935. She is close to | goods industries index on a similar | the point of a devaluation of the franc. This naturally would endanger | the gold status of the currencies of | Holland and Switzerland. Unless | Great Britain and the United States | per cent for capital goods from the | 8ITive at some point of agreement on stabilization, there is bound to | be a period of currency chaos which | would temporarily affect all foreign | trade, including that of the United | States. From this angle the European | situation is bearish toward American | business, though not conspicuously so. Federal Debt Debated. The central point at which most national problems meet is that which surrounds Government financing. From this also there radiate the col- lateral aspects of the national situa- tion, which invites so much controversy today. The Nation's debt at the end of the 1936 fiscal year approaches $35,000,000,000. ‘The appropriation for the fiscal year 1937, together with the probable deficit in that year, will bring it close to $40,000,000,000. This figure has been regarded as the danger point to Government credit. It has been claimed that when and if the debt reaches this sum, present buyers of United States Treasury paper will cease to buy and will begin to sell out their holdings. There is not much logic in this contention. For, if at around $35,000,000,000 the institutions which now hold 45 per cent of the Government debt are willing to subscribe to the limit of their capacity for 2% per cent long-term bonds at par, they are not likely to be intensely bearish on Government credit because the debt had been increased by an- other $5,000,000,000. ‘What is more likely to happen is that the use of bank reserves by the end of another year will be more generally employed in their regular fleld and that this will cause liquidation of Gov- ernment bonds in order to release funds for business. Prices consequent- ly wili reflect the higher commercial interest rate. Waste Must Be Stopped. Obviously there is and has been great waste in the administration of relief, The possibility of correcting this is to the advantage of the Gov- ernment and its ctedit. The Repub- lican platform, in its treatment of agri= culture, makes recognition of condi- were valued at $34,440,000 and imports 84.$27,116,000, 4 (Continued on Sixteenth Page.) [ ]