Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-04-28
HIGH MONEY FAILS
TO SHAKE MARKET
Holders of Stocks Apparently
Waiting for Ease in
Credit Situation.
BY CHARLES F. SPEARE.

special Dispatch TO Inc star.
NEW YORK, April 27.-The end of
April finds money rates high, though
with funds not so scarce as they were
y month ago and the STOCK market
Complacently watching the situation
and apparently little disturbed by
credit conditions.
Those who have stocks are not will
ing to sell them. In the background
is an army of potential buyers i'm
patiently awaiting the advantages OF
a decline that somehow never comes.
This accounts for the resistance Of
stocks this week to unfavorable con-
ditions and to the serious financial dis
turbances in Europe as result OF the
reparations deadlock in Paris and
measures adopted by various central
banks to protect their gold and pre-
vent their nationals from exporting
capital.
The average price of industrial stocks
this week has risen to within 4 points
of the level of March /. from which
there was a decline of IS points end
ing on March 26. This steady up
ward movement at a time when the
obvious intent of the Federal Reserve
was to keep prices down by limiting
accommodations to speculative bor-
rowers. and particularly Fridays re-
markable resistance to II per cent
money, has converted many who looked
for a period of sagging prices to a
belief that the decline has run its
course and that another broad. rising
market is only little way ahead.
Call Money Stays Up.
Undoubtedly much of the speculative
chat was winnowed out of the market
last month when its structure was
greatly strengthened by the withdrawal
Of element sthat were leaning on it too
heavily. It does not appear, however,
that there has yet been sufhcient I'M
provement in the credit situation or
enough change in the investment value
of securities to warrant the public IN
swallowing the bait which the profess
sional crowd has been dangling before
its eyes.
The average of cell money renewals
this week has been 8A per cent ana
for the month 1t will be between 8H2
and ga per cent April is not one
of the periods of heavy money demands
for commercial purposes; May / ais
bursements compel a moderate turnover
of funds compared with those OF jan
uary and July and April and OCTOBER.
The Government is out of the market
both in the form of refunding opera
lions and in tax collections. This ought,
therefore, to be time of comparatively
low rates But fridays maximum quo
tations on call money was higher than
that during December or in the early
part of January and nearly euualed
the high rate in March out of which a
near panic developed. This may be al
artificial situation and represent pro.
test or reproof by the Federal Reserve
to the latest increase Of $4,000, 900 in
Sc that
unless the pyramiding OF loans ceases
the end of June will bring money rates
even higher than those SO far quoted
or in the year 1920.
Initiation Signs Ignored.
There Is the same skepticism over for
eign money rates as those obtaining
here, especially the rate of ia per cent
established on Thursday by the Bank OF
Germany. One hears 1t stated that this
is all part Of great international bank
ing conspiracy and that the foreign
phase of it Is simply an element in the
trading tactics of the Germans to OBJ
tain lower reparation annuities. The
unwillingness of a large body OF the
public to accept the well established
facts of credit imitation in this country
and of gold Withdrawals from Europe
Is one of the strange aspects OF situa-
ton that has no parallel in financial
history.
loans, the necessity for dozen foreign
banks to raise their discount rates from
l to III per cent since January and the
break in the German mark this week to
the lowest level since German currency
was stabilized in 1924, constitute q
group of facts that should cause specu-
lators to pause before taking on addi'
tional commitments.
The explanation of our markets re-
fusal to become panicky on the second
money scare Of the year lies In the COM
paratively small amount of weak specu-
latige holdings. AS one broker states
it.: THE market has become almost
an investment market, for the greater
part of our customers have paid ST
per cent or more on their stocks. Thu
Is q much higher equity than you viii
find in any other form of security nor
n1ally carried on borrowed money. TIT
average man buys house and pays q
to IS per cent down on the cost Of 1t
He is considered TO be an investor In
real estate. But the one who has ~
equity of so per cent in stocks Is char
acterized as a speculator."
Commodity Average Declines.
While the trend In prices of stock
and more recently in those Of bonds
has been upward, the average Of com
n1odities has been declining. This weel
cotton has broken through 10 cents
pound. All grain prices have been mucl
lower than they were two motnhS age
Z Wheat Is IS cents TO Al cents bushe
cheaper than 1t was last year, corn l
TO about 20 cents. oats to 16 cents an
rye IS cents to As cents hushel unde
the prices in April. 1928. Metals ar
of: also other prominent commoditie;
The wholesale price of farm products
l0iz per cent below that OF year agt
and for all commodities Siz per cen
less.
There has been a persistent declin
in the commodity index since the earl
part Of February. At the same tim
there has been slight elevation
the average Of wages with quite fu
employment for this season throughol
the country. in contrast with the url
employment crisis year ago. This
one Of the sustaining factors in til
general situation. although there al
many serious local disturbances CROWN
out fdetiating commodities.
Business Prosperity Shown.
There have been a number of stril
ing indications of business this wee
such as the reports Of the oil compani,
for 1928 and for the March quarter
this year. the quarterly statement
Bethlehem Steel Corporation, the ii
crease in the Pennsylvania Railroad
vident TO 81 share and the larg
"a gross and net earnings reported
steam transportation lines in near
every section OF the country Caref
estimates Of probable earnings by co
porations In the June quarter indica
that while these may not be quite
high as for the three months ends
March 81. they will be greater than
any similar period since 1925. The ia
of business in the second half of 49,
rests with the money market.
One Of the most significant develo