Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-12-31
freely in settlement of its outside obi
cations.
No Boom in Bonds Expected.


buying and rising prices for bond.
and stocks of the higher grades. In
the present instance, however, therd
is the competition of foreign issues
put out on attractive terms. Thu
loans TO German enterprises have beer
one of the features of the last sis
months. Italian borrowings. now that
the Italian war debt question has been
disposed Of, will probably be heavy.
What France will do depends en-,
tirely upon the outcome of the efforts,
which so far have not been success.
full, to fund what il owes TO thu
United States. The Washington Gov,
eminent has not officially stated, still
has made its mind known, that there
should be no further advances to coun-
tries which have not ARA nged to taxa
care Of their war Indebtedness. Also
there will be the ordinary domestis
re-ffnancing and other demands for
new capital for home uses. All this
Will tend to hold the investment
market in check. It Will not neces-
sarily exert depressing influence.
but 1t will be an opposing intiuene.
TO any further advance in Investment
prices.
The French franc went as low q.
3-42 in March, 1924. Then came tie
500 900 600 American loan, which was
a powerful element of support, even
though it was not used by am
means entirely. Toward the middle Il
December the French franc started
going down again. There was fresh
Imitation of the paper currency which
carried the total to the largest IN his
tory. At the same time there was
| cuttins-oh of further American aa
yances. The whole discussion was IS
TO whether in order 10 properly bal
ance the French budget, there should
| be an increase in direct taxation OF
| whether the obligations should be met
! by the giving up Of the various Gov,
| eminent mOnopolies and the mOrtga1
ing Of other French industries.
Europe Still Problem.
AS the year ends the Europe..n
| situation has become more and more
! interesting. Germany has liquidated
| its internal war debt, appears equal
to carrying out the provisions of the
| Dawes plan and is facing an industrial
expansion the keynote Of which is low
wages and low cost of living. In these
| respects it compares favorably with
other European countries Great
Britain has the enormous problem II
| unemployment which is being only
! slowly solved
| It's financial position is strong IN
| comparison with the years following
the war. But it has a lot still TO go
! through. Trade has increased, but
the gold holdings of the Bank of Eng
land have come down over 500, 900 900
! from their top of the first week Of
August. The gold exports have been
| heavy because, in order to put the
country definitely back on a gold basis,
| debts have had TO be met.
Some of these obligations have II
| volyed Africa and South America
! others Canada. The rise in the @
madam currency TO above the dollar
mark has been one of the incidents O.
| the second half of the year The
United States has been taking in gold
| from England and shipping it across
! the border.
Automobile Stocks Popular
The big rise in the automobile
| shares was the feature of the stocE
market during September and October
| 1t was due to an increase in produC.
| ton greater than any that had oc-
! CURED in similar periods of former
! years. 1t meant increases of div
| dends, both in stock and cash, and
capital split-ups which in the end
would work out to the advantage of
the shareholder One of the main
| points in the 1926 situation will be TO
| see whether Wall Street has been
right or not in its judgment regarding
! this class of stocks. SO far there has
| been no suggestion of oVerprodUCtion,
| but rather an extraordinary demand,
not involving higher prices, but re
! curing capacity output. The al
vance in the automobile group has
been one of the principal happenings
of the year. 1t has attracted a great
deal of outside participation. but more
SO it has been an affair Of rich, So
called inside spectators" who have
known what was going TO occur with
regard to dividends and have made
their commitments accordingly.
Developments in the copper meta
have scarcely come up to expectations
1t was supposed that the adoption last
year of the Dawes plan would lead to
a much larger demand from Germany
and other buying countries. These
anticipations have so far not been
realized, although with the remark
able improvement in German economic
conditions, they may be fulfilled dur
ing the coming year. Copper prices
went up close TO Is cents pound. but
then came down. The copper con-
panies are making money, but not like
they were in old times. when Euro
pean consumption was normal and
before the big expansion in South
American output had occurred.
! sugar Prices TO Remain Low.
The outworkings of the sugar stu
alton are going to be one of the most
| interesting incidents of 1926. The
| latest estimates are for a Cuban crop
OF over $4,000 tons. which Of course
Is very high. considering the very
large outurn of 1925. The Cuban
producers have been reporting much
smaller earnings. The outlook for the
coming year for the sugar producers
seems to be one of comparatively low
prices. Sugar is VIGOROUSLY slower
to respond than most other products
to the economic law which calls for
reduced production when prices go
| down. On the other hand, the sugar
| stocks in their severe decline have
| able earning results.
The general retail trade of the
| country continues very large, as
shown in the railroad tonnage figures,
| which are well up TO the top for all
time; in bank clearings, and in the
unusual business being done by the
| mail order and other merchandising
concerns. There appears to be no i'm
mediate change in prospect in this
direction.
What the great rise on the Stock
Exchange in the Autumn was work
| ing up to was the various capital
split -ups and dividend increases, many
Of which have been announced. and
more of which are still anticipated
| The capital readjustments involve the
multiplication of units, facilitating
higher dividends, and making 1t
easier for the wealthy shareholders to
distribute to the public. This distri-
hut will INV he IN