Evening Star Newspaper, December 31, 1936, Page 18

FINANCIAL. FUROPEAN NATION CALL FOR INPORTS All Consumers in U. S. and Entire World Watch Sharp Advances. (By Cambridge Associates.) Closing the year on an extremely bullish, but somewhat disconcerting note, agricultural news for 1936 was replete with high points and continues to command attention from all con- ‘sumers in this Nation and through- out the world. Despite heroic attempts to stimulate production of farm commodities in almost every important nation, sev- eral European countries were forced to admit in December that they would be forced to call upon major grain- producing nations to an extent that threatens to reduce carryovers to dan- gerously low levels. As a result, food costs threaten to arise alarmingly throughout the world, and the farmer promises to be in the ascendency for the first time since the World War. Prices have not yet fully reflected the shortage, but judged from stand- ards of 1929 they are already out- distancing industrial commodities and causing expressions of concern from representatives of the New Deal, who only a short time ago voiced deter- mination to lift commodity prices to the “normal” levels of 1926. Comparisons Offered. ‘The tabulation below shows prices of several of the commodities most affected, in comparison with prices nt! their peak in 1929: December July, 1929. 21,1936, $1.39 prices from one-fourth to one-third | of the 1929 levels during the depres-| sion, giving ample justification for the stand taken by the present adminis- tration (and the one preceding it) | that the agricultural situation needed special attention. Agriculture un-| doubtedly still needs attention, and is being given it in the shape of soil conservation checks totaling over $400,000,000, now in the process of | distribution. But if prices such as the | above hold at their present levels for | any period, the industrial population will need a “breathing spell” to catch up with the farmer. Cotton Prices Still Low. Such prices do not represent the | whole farming picture, however; cot- | ton prices are still only two-thirds of | their 1929 levels. The domestic boom | in the consumption of cotton is not | accompanied by a corresponding de- | .mand for American cotton in foreign | ‘markets. | Heavy steers are selling today for approximately $11 per hundredweight, as against over $16 in 1929, and sugar now sells for 4.8 cents per pound in- stead of 5.5 cents. Cotton and sugar are still far from shortage levels, ex- cept those artificially induced for the latter by import restrictions. Looking at the immediate past in- stead of the possible future, the United States farmer continued to burrow his way out from under at | about the same rate as in the previ- ous three years. But with the important exception that the increment of income added | in 1936 was less important to his very | existence, and more important to his | ability to invest in new capital equip- | ment, than in any of the three previ- ous years. Total income from the sale of farm products, according to the Bureau of Agricultural Economics, rose by ap- proximately a billion dellars, bringing | total receipts from benefits and sales to about $7,800,000,000, an increase | of 11 per cent over 1935, 78 per cent‘ over 1932, Gross income for 1929 was | in excess of $10,000,000,000. U. S. to Regain Export Markets. These figures point to the forest Instead of the trees. Drought condi- | tions in many areas restricted ingomes of individual farmers and enriched | more fortunate ones. The natural hazards of agricultural pursuits are not conquerable, but partial allevia- tion of the distress caused by these hazards has been construed as the obligation of the Federal Government. This policy has possibly delayed re- adjustments in the system to meet new conditions, but it has greatly re- lieved the shock of sudden change and the human suffering entailed. ‘The Department of Agriculture does not- contemplate pursuing a policy which will discourage production of grains in the coming year. With the resumption of more normal trade re- lations between countries, there is little doubt that the United States will regain her former position as a major exporter of agricultural com- modities, since, in the last analysis, the agricultural lands of this country are better suited to such production than much marginal land now being devoted to the purpose at great cost to foreign governments. Furthermore, mechanization of the farm is more advanced in this country ‘han in ady other nation producing for the world’s markets, ’ AVIATION PRODUCTION AND JOBS UP SHARPLY By the Associated Press, Substantial increases in employ- ment, wages and production of the air- craft manufacturing industry is re- ported by the Census Bureau. The industry’s products last year, exclusive of engines, are listed at $45,347,000, an increase of 71 per cent over 1933, the preceding census year. ‘Wage earners numbered 11,384 last year, an increase of 45.6 per cent, and wages totaled $14,892,000, a rise of 44.5 per cent. WHEAT EXPORTS CLIMB FAR ABOVE 1935 MARK Br the Assoctated Press. ‘Wheat exports between July 1 and December 19 are reported by the Commerce Department at 1,674,000 bushels, compared with 74,000 bushels for the same period last year. Im- ports of wheat from Canada for con- sumption during the period this year totaled 22,939,000 bushels, compared with 17,977,000 bushels last year. 0il Output Jumps. N:num nn"w.od‘ncflu'x‘h atas new § [ WHEAT CroOPS BELOW OUTPUT. NORMAL | 'CARRY_OVER ».flfifi' s Ta ~11i11t 18944 altity atitiiiny ~Ittitiit EACH SYMBOL=100,000,000 BUSHELS METALS BOOSTED BY HUGE DEMAND Climb Sharply as Best In- dustrial Year Since’ 1929 Closes. BY A. A. PATTON, Associated Press Statistician NEW YORK, December 31.—Fodder for the hungry maw of fast-stepping industry, non-ferrous'metals climbed sharply in price as the best industrial year since 1929 came to a close. Copper, late in the year, touched 11 cents a pound, a rise of 10 per cent from the year's opening quotation at 9.25 cents. Lead had an 18 per cent HEAVY DEMAND 10 5 ' UNIT CENTS PER POUND‘ AT N ¥ 1929730 3132 "33 °34 '35 36 Copper’s persistent price ad- vance indicates swelling de- mand throughout the world. Electrolytic prices at New York were used in the chart, gain. Tin and antimony followed with 8 and 9 per cent gains respec- tively. Zinc was 4 per cent ahead. Heavy demand from corporations hard pressed to fill the biggest back- log of orders since recovery got under way was the key factor to this upturn. ‘War Scares Lift Prices. European war scares and incidental armament manufacturing caused large buying abroad. Price boosts followed each other in rapid succession in for- eign markets, and soon were reflected here. The fact that most of these metals, other than iron and steel, were mined under agreement, tacit or written, among key producers abroad to keep output down was a contributing factor. The spurt in heavy industry—elec- trical equipment manufacturing, building, automobiles and parts—also gave quotations an upward shove. Copper Trade Cautious. Copper was boosted cautiously by domestic producers, who permitted quotations abroad to soar far above prices here before making an upward adjustment. Trade sources advanced two potent reasons for this move; it permitted some testing of demand at the higher level so that no markdown would be necessary; and producers shied from higher prices, being somewhat fearful that they would cut into sales and stimulate competion from other metals. Early in the year tin suffered twin ills—slower demand from can manu- facturers, the principal users, and ru- mored disagreement among leading world producers, principally Siam, over allotments. With the trouble ironed out by Mid- summer, however, tin snapped ahead for a 30 per cent gain in the last six months. Lead forged ahead steadily through- out the year, demand expanding apace with industrial activity. Zinc nudged forward moderately. - BUILDING MATERIALS MARKET SEEN FOR U. S. B> the Associdled Press. Saying that the United States “should sell more construction and building materials to South Africa,” the Commerce Department adds that British traders have the advantage in that market at present. Although the British have “culti- vated this market for many years,” the department says, “American ma- terials are well and favorably known because of their superior quality.” 1935 * ) § 1934 *’! wa TERR 1929-32 **! 1923-28 ’ - WHEAT SUPPLES AT IOYEARLON Short Harvests and War Scare Send Quotations Steadily Higher. By JOHN P. BOUGHAN, Associated Press Market Editor. CHICAGO, December 31.—With grain harvests of the world below nor- mal and war-worried nations hoard- ing every available bushel of cereal, prices of the principal grains pushed steadily higher throughout 1936. ‘The world’s supply of many cereals dropped to record low levels. Wheat | stocks, for example, were recently re- | ported shorter than at any time dur- | ing the past decade. Wheat, corn, oats and rye quotn-i tions swept to the highest point since early 1929 as the year closed, de- mand from every section of the globe contributing to the upturn. Farmers Profit. Robert P. Boylan, president of the Chicago Board of Trade, said that | farmers received the major portion of the higher price level. “Although a disastrous visitation of drought over large areas of normally productive farm lands,” Boylan states, “again reduced yields of several cereal | crops to a severe extent, increased | prices have made up for this to a ! large degree. Improved general busi- | ness and the expansion of buying | power resulted in fair prices for farm | products during the early months of | 1936. And drought damage later stim- ulated activity both in futures and in | cash grain. | the fact that in all grains and at all times the cash markets have domi- | second, and perhaps more important nated the situation rather than any speculative activity. Regardless of substantial advances in futures con- tracts, the cash markets have kept ahead. “Highest prices, for all grain fu- “A notable feature of the year u{cununued growth of buiding activity | tures were registered late in the year, the general average reaching top levels since 1933, the main incentive being the persistent absorption of cash grain at material premiums over futures.” Marked Change Over Past. President Boylan especially points out that the grain markets of Chicago and the country have functioned smoothly so far under the commodity exchange act, which became operative the middle of September. “There has been an absence in 1936,” he says, “of spectacular market tactics, which in other years and under conditions simi- lar to those which developed this year because of drought damage would un- doubtedly have caused violent price fluctuations, disturbing to market equilibrium, “In the wheat trade, there has been a marked change from condi- tions prevalent for the past several years. As the result of small crops in some of the important producing na=- tions for two or three years, the tre- mendous surplus that hling over world markets has been reduced to a point of the closest adjustment of supply and demand since 1926-7." Losses in Corn and Oats. Heaviest crop losses of 1936, as out- lined by President Boylan, were in corn, oats and barley. The corn crop was estimated at 1,527,000,000 bushels, compared to 2,292,000,000 bushels in 1935; oat§ made a yield of 784,000,000 bushels, a reduction from 1935 of 413,000,000 bushels. The pro- duction of barley was cut from 282,- 000,000 bushels in 1935 to 144,000,000 bushels this year. Despite heavy losses in the north- west—Spring wheat yield being only 108,000,000 bushels compared to 159,- 000,000 bushels last year—the total 1936 United States wheat crop was 627,000,000 bushels, or about 4,000,- 000 bushels more than in 1935. High and low prices for 1936 grain futures were: Wheat $1.36% and 85 cents, corn $1.103% and 52} cents, oats 52% and 26%, rye $1.16% and 54%. A conspicuous 1936 development, which President Boylan says promises to result in increasing benefit to farmers, was the establishment on the Chicago Board of Trade of the world’s only futures market for soy beans. @rntingfi for the New Year 1937 Laidlaw and Co. 727 15th St. N.W. Washington, D. C. Members New York Stock Exchange ,» WASHINGTON, D. C., THURSDAY, DECEMBER 31, 1936. FARMER IN SADDLE AS SHORTAGES BOOST COMMODITIES SHARPLY.: PACKERS RUSHED BY BIG RECEIPTS Drought Forces Marketing. Supply of Meat Larger Than Expected. BY G. F. SWIFT, President, Swift & Co. The meat packing industry has had & busy year. The supply of meat was larger than generally thought possible 12 months ago. The crops of 1935 had provided large feed supplies, so that the cattle and hogs coming to market in the early part of 1936 were heavier than in the preceding year, and the shortage of feed which followed the Midsummer drought forced farmers to market a much larger number of their animals than would normally have been ex- pected. The United States Department of Agriculture anticipates that there will be a marked decrease in the number and weight of live stock coming to market in 1937, Owing to the reduced feed supplies, it is expected that fewer fat cattle will be available; also that the number of cattle, calves and hogs coming to market will be smaller. On the other hand, the marketing of lambs may not be greatly different from that of the past year. On the whole, the meat supply is expected to be less than it was this year. Business conditions in general have continued to share in the world eco- nomic recovery which has been under way since 1932. Y Economic trends through 1936 have been toward a better balance between the parts of the world economic ma- chine. The outlook for 1937 is favaroble, but 1t is no time for letting optimism | carry us away from the course of rea- son, since there are still many sources of maladjustment to be disposed of. IN EXPORT COPPER Year Marked by Expanding Pro- duction — Building Gains Prove Main Factor. (By Cambridge Associates.) A year of expanding copper pro- duction kept prices steady for most | of the year, but a fresh spurt in the | foreign markets in mid-December brought export copper a new six-year high. Further adjustments of the do- mestic price appear likely, as the red metal occupies the best statiatical posi- tion in years. The strong demand for copper, which has featured the year, stems | from two sources. The first is the/ coincident with world recovery. The factor, is the need for copper in the vast armament programs being car- ried on by every European country. These demands brought stocks of refined copper in the United States down to 178,018 tons, in comparison with the 226,691 tons held a year previous. The world situation had improved equally. World stocks were estimated at only 356,785 tons on that date, against the 496,521 of 12 months before. The firmness of the price level | throughout the yeay has automatically stimulated produetion, but each month shipments have totaled above the amount produced. | to threaten the statistical strength. Since both continued building ac- tivity and war preparation demands show no signs of abatement, further strength in copper prices will probably be evidenced in 1937. A. A. A. SUGAR QUOTA REGARDED “BULLISH” (By Cambridge Associates.) ‘The 1937 sugar quota has been set by the A. A. A. at 6,682,670 short tons. This compares with 6,434,088, the original 1936 quota, and 6.812,687 the revised quota. Since this latter figure includes some 127,000 tons that was “borrowed” by 1835 the result is that, as it now stands, 1937 starts with virtually the same quota as ruled in 1936. Growing purchasing power will naturally be reflected in higher per capita sugar consumption. Then, too, it is expected that domestic beet sugar producers and the Philippine pro- ducers will fail to make their allot- ments. On the whole, the quota plans as announced are regarded as bullish, GRAING ARE LED BY CASH MARKETS Boylan Says Steady Gain in 1936 Made Growers Chief Beneficiaries. BY ROBERT P. BOYLAN, President Chicago Board of Trade. Fortunately for our great farming areas, price upturns in all grains were substantial and steady throughout the harvesting periods and grain growers, as a result, were the prin- cipal beneficiaries. A notable feature of 1936 is that in all grains, and at all times, the cash markets have dominated the situation rather than any speculative activity. 5 Regardless of substantial advances in futures contracts, the cash mar- kets have kept ahead. Highest prices for all grain futures were registered late in the year, the main incentive being the presistent absorption of cash grain at material premiums over the futures. It is important to the future oute look of agriculture and industry as well to note that in the wheat trade there has been a marked change from conditions prevalent for the past sev- eral years. As a result of the small crops in some of the important producing na- tions for two or three years, the tre- mendous surplus that hung over world markets has been reduced to a point of the closest adjustment of supply and demand since 1926-7. The soy bean crop, from the stand- point of both agriculture and indus- try, is increasing steadily in impor- tance. The value of the new soy bean futures market on the Board of Trade met prompt recognition from the trade. A great part of its activities is due ! to hedging, or price insurance, which | it makes available to processors. We | feel the facilities offered by its future market will be a strong factor in| popularizing soy beans, and that theJ exchange has taken a long stride for- ward by demonstrating its market leadership with a new product of agriculture, LEAD PRICES GAIN, CONSUMPTION RISES November Figures at Highest Level Since 1930—Market Due to Stay Firm. (By Cambridge Associgtes.) Following 11 months of expanding production, but even faster expanding demand, lead prices late in November reached the highest level since Octo- ber, 1930. = Currently, partly under seasonal | influences, demand appears to be falling off slightly, but the statistical | position of lead is such that it is be- lieved prices will remain firm at pres- ent levels well intc at least. Buy- ing in anticipation of the increase also, of course, tended to bring up the inventories of consuming estab- lishments, but this appears only as & temporary factor, since lead is now rapidly entering consuming channels. In spite of the greater 1936 produc- tion, lead stocks in the last quarter dropped to the lowest point attained in a corresponding period since 1933. The important question now is whether the recent price rise is sufficient to bring in enough marginal producers Earlier in the year price increases stimulated production substantially. The expectation that the market will continue firm is based on the belief that consumption will continue to ad- vance with production. PAPER AVERAGES 10 PCT. PRICE GAIN (By Cambridge Associates.) Paper prices averaged gain of nearly 10 per cent in 1936, but are still far from pre-depression levels and, for that matter, still below hllh mark set in the late months of 1933. The chief factor in keeping paper prices in check is competition. Producing costs are higher all along the line. Chemical pulp, rosin and casein prices have advanced and sub- stantially higher labor costs are in the offing. The prospect is that, with these considerations, increasing firmness in paper prices will be shown in 1937. Consumption is growing, but there is still excessive productive capacity. On the other hand reserve stocks are although currently no marked activity is being shown. Rail Investment Huge. ‘The total property investment as of December 31, 1935, of Class I rail- roads in the United States was $25,- 714,360,000, not high and forward buying in antici- pation of price increases might well cause stringency in certain types dur- ing the early part of 1937, Duty on Apples Cut. Norway has reduced the duty on apple imports. ResioentiaL BuiLoing FoLLews NATIONAL W MAT'L IncoMe (S ResioenmiaL = [ is29 190 ko3 st 1> k4 Ke5 16 | | SHARPCAN SEN I HOME BULD $800,000,000 Total Still Less Than Half Level Set During 1929. BY CAMBRIDGE ASSOCIATES. Forecasts of a general building boom in 1937 to rival that of the 20s should be taken with & bit of salt. The salt, however, should not be spread so lib- erally that there is no taste of the | sure, steady revival that residential | building is bound to enjoy within the next few years. Both history and current facts con- firm this prediction. In the normal course of progress from depression to prosperity revival reaches consump- tion goods (clothing, furniture, etc.), goes on to semi-durable goods (plant extensions, etc.). The effect, if it were not 5o slow after & deep depres- sion such as we have been through, | is something like touching off a string | of firecrackers. Trends Intermingle. Obviously, too, developments inter- mingle. But it can be definitely de- clared now that the durable goods stage has been reached. Approximate- ly $800,000,000 will be spent for build- | ing homes in 1936, against the $479,- 000,000 of last year and the $248.840.= 100 in 1934, the building industry's | depression low point. | During the last year rents have cent months the upward trend has | been less noticeable; therefore it seems | | wise to expect that the 1937 increase | will be somewhat less, probably in the neighborhood of 7 to 10 per cent. Attempts have been made to show ' the correlation between rents and home building, but it is not exact. Building activity ordinarily drops much faster than rents and rises more abruptly. Much more striking is the comparison between residential build- ing and the national income. Only in 1933 and 1934 does the building index fail to correspond with . income figures, and even here there is a very minor difference. Still Far Below 1929. ! For its bearing on the progress of | recovery in general and the building | industry in particular it is important | to note that even though residential | building is now more than three times its 1934 low, it has not yet reached the halfway mark toward the 192 building figures. In addition it should 1 not be forgotten that not only ui obsolescence far more a factor than in 1929, but a population growth of | 5,000,000 or more to be housed. ; Will a sharp increase in bmldlng| costs stifle the growing urge to build? | That does not seem likely. The low | cost of money and tite rise in national income are influences potent enough to overcome any likely increase in building costs during the coming year. | ‘The 1937 gain in residential build- | ing is not likely to prove so emphatic percentage-wise as that enjoyed in 1935 and 1936, but a conservative pre- | diction would place 1937 requirements | beyond the billion mark. TIN PRICES IRREGULAR THROUGHOUT PAST YEAR (By Cambridge Associates.) On January 1, 1936, the price for tin stood at 472 cents. Price action over the past 12 months has seen some interesting developments. Thei price now is in the neighborhaod of .52 cents in striking contrast to the low point near the 40-cent level in midyear. A great wave of speculative buying was the chief factor behind this sud- den price rise, a wave of buying, which in turn came with the renewal of con- trol agreements. The high price point for the year was reached on November 9 when the level was .535 cents. ‘The proposed production schedule should have no difficulty in coping with world demand. This is true even though there has been a generally in- creasing rate of consumption that will, in all likelihood, continue, W. B. HIBBS & COMPANY MEMBERS 'WASHINGTON STOCK EXCHANGE Telephone + National 0540 NEW YORK STOCK EXCHANGE PHILADELPHIA STOCK EXCHANGE NEW YORK:CURB EXCHANGE CHICAGO BOARD OF TRADE BOSTON STOCK EXCHANGE NEW YORK COTTON EXCHANGE HIBBS BUILDING * WASHINGTON, D.C. FINANCIAL. INcoME Paip Qur ~ Seare Lerr BUILOING & SCALE RIGHT ggy, PRVATE BULDING AGAIN N FRONT Decreasing Dominance of Public Projects in Total Likely to Continue. (By Oambridge Associates.) ‘The most significant development of 1936 was the decreasing dominance of public financing in the general construction figures. It is a trend that can be expected to become more manifest. * ; That does not mean that govern- ments, other than Federal, are likely to spend less for building than they have in the recent past. Probably | they will spend more. But the in- crease in private building, m\demhl.‘ | ¥] {BUILDING GROUPS GET LARGER SHARE Receive Increasing Portion of Mortgage Business During Year. BY MORTON BODFISH, Executi Vi t, O Buniine and Loar Lessee. Tihte Currently, savings, building and loan associations are doing a greater portion of the total home mortgage lending in America than at any time in their previous 106 years of activity, The other billion-dollar years in their lend- ing history, 1923-1929, were periods in which residential contracts hovered around the $1.500,000,000 mark. This year it is estimated that some $860,000,000 in new residential cone tracts will be the full count, but save ings, building and loan activity is at its billion-dollar level. The explanation is, of course, that the refinancing of existing mortgages and the transfer of mortgages on ac- count of the sale of homes to new owners is bringing more business to the savings, building and loan asso- ciations than it ever did before, and in the meantime they are doing prob- ably a larger portion of the new resi- dential financing than at any previous time. This is the most startling fact or figure in regard to this thrift and home financing business today. It presages a future of expanding service and importance for these institutions, unless something entirely unforeseen looms up. And it arises directly, we feel, from the efforts which have been made in the past five or six years to modernize w and non-residential, is returning US| (he methods of the business to meet Ito something like the old predepres- | sion relationship. So much discussion has centered on public building activities that it| has been the _eneral impression that | expenditures were far in excess of | normal. Such is not the actual case. While Federal expenditures have been increased, State and municipal spend- | ing has fallen off sharply, leaving the public works total far below the 1928-29 averages in spite of all the to-do about them. | modern demands. The old fundamentals of the monthe 1y repayment of the loan and a suf- ficiently long period for the loan to b> paid off have been retained and around them have been centered new devices and attractions to serve the borrower. accounted for only 40 per cent of the total. Even more than in the case of resi- ential building, there is vast room During November, 1936, for ex-|for expansion of industrial and public ample, 58 per cent of the total build- utility construction. In both cases, ing contracts were awarded on pri- and particularly the latter, extensive - | vate jobs; 42 per cent on public. In productive facilities were built up in risen about 11 per cent. During xe- |, " e month of 1935 private jobs 1928, 1920 and 1930, STOCKS — BONDS — COMMODITIES Our facilities for executing orders in Security and Commodity Markets include Direct Private Wires to each of our offices and to the principal markets AUCHINCLOSS, PARKER & REDPATH i 718 Fifteenth Streot, Washingten Members Niw Year Srecx Brcmawes Naw Yeax Correx Excmawes N. Y. Cvas Bxcuanos(Amoc.) Naw Yeax Prosves Bicmawes New York Baltimore Wilkes-Barre Cuteaee Boans o7 Taans Cumianse Mazearrns Ezcuawos Cowwuesrrr Excuawes, Inc. Wanreoren Srecx Ezcmawes 56 Years of Hoinfz Financing 'HOME LOANS NO COMMISSION Prompt Service 33 Million Dellars advanced on homes LOANS MAY RUN WING. Over 58 Y WITHOUT EXPENSE ‘ears_of Home Financing. OF RENE Federal Home Loan Bank System District of Columbia Building & Loan League United States Building & Loan League American Savings, Building & Loan Institute Washington Permanent Building Association 629 F STREET N.W. ASSETS OVER $9,000,000 i ization. AT ov I";:‘Ylm OVE! r U. 8. rament Supervision A FLYING START Once 2 year (and this is an opportune tims) cvery man and every woman should re- view their resolutions about saving. Start 2 savings account now at this Bank if you wish to get away to 2 flying start for 1937. Then save regulatly every Month during the year. McLachlen Banking Corporation S Since 1891 TENTH AND G STREETS, N. W. S.W. Branch, 12th and Maryland Ave. S.W. Member Federal Deposit Insurance Corporation LN