Evening star., 1927-07-31
STOCKS At HIGHEST
THE YEAR
"Country Has More Money
Than Business" Banker
AptIy Sums Situation.
BY CHARLES r. SPEARE.
,natal nispatrh IA Thn Star

NEW YORK, July 30.-"The coun-
try has more money than business" 4"
said banker at the end Of a week
that has witnessed the lowest interest
rates and the highest average price
for stocks this year.
This aptly describes situation
that has been rendered more con-
fused by the brilliant reports OF
earnings of few large corporations
for the June quarter and the first
half of 1927, but against which there
has been fresh evidence that the
general volume Of the country'S trade
Is decreasing. :,
The stock market has been moved
more by the abundance OF money ana
the steady day-to-day decline In
rates, eliminating in a reduction on
Thursday in the discount rate or the
Kansas City Federal Reserve Bank,
than by any other factor.
A few stocks have been bid up
to extravagant heights on rumors
that large interests were buying FOR
control" The majority of them. how
ever have moved in harmony with
the money market and have enjoyed
the ADVANTAGE of a satisfied pubic
which so far has not been induced
to liuuidate any considerable portlon
of it's holdings in spite OF the Iact
that they are today at such hlgn
prices.
Commodity Demand Increasing.
There Ia the symptom in the bust
ness world OF reviving demand Tor
goods and commodities. 1t prooaniy
will he found at the end of the year
u
we're the periods when production was
AT it's lowest and the profits OF busi-
ness smallest.
Aside from the General Motors Cor
poration and the Chrysler Corpora
tion. the first half year in the auto
mobile industry was much less salts
factory than in the recent past. The
profits Of the United States Steel Cor
poratio in the June quarter were
better than might have been expected
after the repetition, week after week,
of the statement that he iron and steel
trades were scraping along the bot
tom with prices for pig iron at the
lowest in five years and lower by
considerable percentage for nnlshed
products than a year ago.
On the other hand, independent steel
manufacturers, such as Republic Iron
& Steel, Bethlehem Steel, Youngstown
Sheet & Tube and Gulf States Steel.
did not do at all we'll in the second
quarter.
Oil Output Still High.
At the end of two months Of effort
to control production of crude Oil in
the Seminole area, it was found that
no progress in this direction had been
made and that the output in this dis
trict. as we'll as In nearly every other
one in the United States, had estab-
lished new high record In the MIS-
tory of the industry.
The Federal Reserve Boards June
review indicated a decline In indus
trial output to about the level Of June,
1926. While wholesale trade slightly
increased and wholesale prices re-
manned the same as during the Spring,
there were a great many Cross-cur-
rents in retail trade as we'll as in man.
ufacturing lines.
Rail Earnings Decline.
The shrinkage in industry as well as
in the movements Of mine products
has had it's effects on railroad earn.
ings along with the slump in the
South, due to the cotton situation and
the collapse in Florida and the flood
in the Mississippi Valley.
About as important railroad lines
have so far published their statements
for June. OF these over 80 per cent
show decreases both in gross and net.
For the six months to June 80 be-
tween Is and 80 per cent have q
smaller net than a year ago.
Only a comparatively few. with
Pennsylvania leading with an in.
crease Of over II per cent. indicated
larger surplus for interest and divi-
Gends than in the same period of
1926. Some Of the others were Atchi.
son, Baltimore & Ohio, Rock Island,
Chesapeake & Ohio, Western Mary.
land and Chicago & Eastern Illinois.
1t Is an interesting commentary on
the current stock market that a large
number Of railroad stocks which sold
this week at higher prices than for
the past 10 or Is years did so follow
ing earnings statements Of the poor
est character Of any month of the
year.
Grain Outlook Improving.
Although the grain crops were very
unsatisfactory in the Spring, they
have all improved tremendously since
July /, and this fact has been given
a great deal of prominence in the
HidfhlHS up oI railroad SndFeS recent
ly. Winter wheat will be short and
corn also. Although in some States,
as Kansas. the improvement in corn
in the last few days has been very
great. the best prospects this season
are in the Northwest
The Minneapolis Federal Reserve
Bank is authority for the statement
that all of the Northwest crop thia
year, with the exception Of corn, will
exceed the 10-year average, realizing
larger cash value for growers than
any since 1924 and exceeding that Of
1925 by $50, 900 900. The professional
grain experts have been trying this
week to create black rust scare, but
without much success. The evidence
Of good crops in Minnesota, the Da-
kotas and in Montana obtained from
banking reports and the activities OF
the railroads in accommodating cars is
much more to be relied en- than that
which is distributed from the Chicago
Board Of Trade.
Discount Rate Unchanged.
Twice this week call money has
loaned as low as per cent. 1t has
renewed several times at 3% per
cent. Time funds have dropped down
to Az Der cent commercial par,or 70