Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-03
BY WILLIAM HARD.

Cnlchko, WHICH u the ScpOhu CitS VI wv
United States, but which is not quite
so concentrated upon the stock market
as Is New York, the effect of the recent
and continuing stock market storm
upon the general American scene can be
studied to instructive advantage.
One Of the most surprising elements
in the situation here was the rapid
appearance of the cash bargain hunt
ers." While thousands of people who
had been operating in the stock market
on margins" were bewailing their lot
and appealing to their bankers and
their grocers and their sisters and their
cousins and their aunts to lend them
enough money to save them from total
destruction, thousands Of other people,
with cold hard cash in their pockets,
were thronging to the local brokerage
houses to buy with ready money, out
rightly, the cheap" securities which
their gambling netghbOrs had surren-
dered on the decline.
This showing Of unexpected reserve
financial strength in the community has
produced vast perplexity in the minds
OF the best local observers as to the
ultimate consequences Of the present
stock market situation IN the United
States at large,
On the one hand, 1t had been at FIRST
generally supposed that people now
would be so afraid of stocks that they
would divert their money into what is
commonly called productive enter
prise" The tendency here away from
that sort of enterprise has been in cer-
tain instances extraordinarily extreme.
A small local manufacturing firm here
actually closed down its whole plant
ard discharged all its employees and put
its whole capital into call money" for
stock market operations. In other
one moment totally from being mall
ufacturing firm into being a financial
firm. Within 10 days 1t encountered
the recent market decline and wished
itself back on the dull normal drudging
round Of producing physical commod-
tiles for merchandising sale.
Many business men here have COM
planned that the producing of physical
commodities was being checked and i'm
peded by high interest rates on bor-
rowed money. Local bankers, great
and small, have been able to get eXcep-
tiQnally high rates on money borrowed
from them for stock market purposes
They thereupon have felt it legitimate
to charge fairly high rates to borrowers
engaged in manufacturing and COM
meFce. These latter borrowers have
been paying very frequently as much as
Ga per cent.
1t had been supposed that Q Tecoil
from the stock market would let loose
q flood OF money into manufacturing
and into commerce and into real estate,
and that thereupon the interest charged
upon money going into such efforts
would abruptly and sharply decline.
Local editorial writers and cartoonists
here have joined with certain economic
specialists In picturing a great revival
and expansion of productive enter
prise" due to the withdrawal of peo-
pies savings from stock market adven-
lures and due to the necessary sending
Of those savings theTeupon into new or
expanding developments In manufactur-
ing and In housing and In trade,
1t would seem at this writing that
such anticipatiens may have been
somewhat exaggerated. 1t would seem,
with Difference to the unpredictable
events of next weeks stock market
quotations, that we have not expert
eneed any utter revolution In the
American business situation, but only
q partial shift of balance. The finally
best opinion here is that the stock mar
ket viii be far, indeed, from being de-
serted, and that the supply of money for
what Is generally denominated "ordi-
nary business" will be increased, not
stupendously but only moderately, al
though perceptthly and usefully.
%SS
George NJ. Reynolds, head of Chi
cagos colossal biggest bank, the Con-
tinental- Illinois, with more than one
billion dollars of deposits, expressed to
this writer o view wholly without panic
and wholly without expectation of any
immediate drastic Kaleidoscope changes.
Mr.. Reynolds seems to think that
Yesterdays enthusiasts, If they fall by
the wayside, will be considerably sup
planted by others with fresh resources.
He seems to think that the vitality OF
the country for confidence IN It's future
is substantially uneXhausted. He seems
to think, at the same time, that bit
more money is going to be available for
the prosaic endeavors OF the business
men who operate factories and whole
sale houses and retail shops and real
estate offices, and so on, and that the
interest rate on money for them Is GO
ing to 20 down by bit or more.
In sum. Mr. Reynolds, as Is character
istic of him. takes q balanced and conn-
posite view of our recent experiences
| and OF our immediate prospects. He
anticipates not . new heaven and q
new earth, but approximately the same
old earth that we have known during
the last few years, with some unSpec-
tacular, but nevertheless extremely
desirable, readjustments. The total OF
his conclusions might be expressed by
saying that he expects no earthquake,
but only gradual and welcome sort OF
levsling Of the landscape. Since this Is
| the Judgment of the largest banker out
| side the specialized volcanic intensity
of New York, 1t can perhaps be regard
ed as having a claim tn be In harmony
with the considered normal Judgment OF
| the country.
No great plunge toward any abyss
hart n atflnefa nftaI aUy3n0 inward Ordi-