Evening star., 1929-12-08
STRONGER MARKET
DEVELOPS IN WEEK
Hoover Conferences and
Message Tend to Restore
Lost Confidence.
By CARLES p. SPEARE.
cial Dispatch to The Star.

special Dlspeteh 70 The Star.
NEW YORK, December T.-Leader-
ship in business and in financial affairs
has been transferred this week from
New York to Washington. Out Of the
national capital has come most Of the
news on which stronger markets for
stocks and bonds have developed.
Dating from President Hoover's an
nual message to Congress on Tuesday,
there has been a broadening of inter-
est In securities reflected In daily
transactions nearly double those Of the
week previous, and quite extensive
lie utility groups. Following the mes
sage was the conference on Thursday
Of several hundred prominent busi-
ness men, who listened to q frank talk
by Mr.. Hoover on the current Situa-
ton and who were able to check up
among themselves as 10 the actual ef-
feet of the Wall Street panic in the buy
ing power of the country.
Then came on Friday the announce
ment from the Treasury Department
that 1t had decided to offer its new
figure Of 3He pre- cent for q nine
months maturity, which clinched the
argument that interest rates for q con-
Siderabl period will be at q level where
all classes Of borrowers may readily be
accommodated. -?
Brokers Loans HaIved.
Eupplementing these events were the
strictly financial ones Of q further
reduction In brokers' loans Of $5S, ,oo0,-
600, with the toal now exactly one-half
that on october 2, q drop in the Fed
eral Reserve rediscount rae in San
Francisco to AZ per cent, which carries
the readjustment from coast to coast,
and time money rates at q parity with
the rate on call. A slight offset to
these conditions took the form of the
highest exchange quotations of the year
In most of the leading European money
markets and further gold exports from
this country.
The first statements coming out of
Washington after November 13 were
inclined to minimize the effect Of stock
losses on business. The organ Of one
Of the national organizations stated
that Wall Street was isolated from
the rest Of the country and that trade
and industry would 60 on as usual.
Gradually there has been 0 franker
attitude toward what has taken place
and its consequences and, with this,
the conferences have gained in respect.
While admitting that the business re-
eeSSion was under way early In October
and was probably an influence in cauS-
ing holders Of stocks to sell them, It is
no less certain that in volume business
has dropped OF materially in several
directions since the country woke up to
the fact that 1t had lost many billions
Of paper profits and consequently felt
poor. This Is quite apparent in the sta
tistics Of the iron and steel trade; in
the unwtlltngneSS OF consumers Of cop
per TO contract at the offlcial price for
the metal; in the drop In railroad car
loadings, which were on more in per
cent in the second week Of November
as compared with O year ago than in
the first week and stil more in the
third week than in the second week,
and in the evidence of reduced sales
that come from all Of the luxury ana
near-necessity trades.
Sound Foundation Shown.
The important contribution that
President Hoover and his advisers have
made in this emergency has been to
steady the wavering lines in the buSi-
ness world and TO make clear the fact
that fundamentally the United States
Is In the unique position today OF
emerging from the most severe stock
market crisis In It's history with no
defaults, no mercantile troubles and
with corporations showing the highest
rate Of current assets to liabilities In
their history and minimum inventories
Commodity prices that have steadily
been tumbling have begun to stiffen,
which will increase buying by those
who have deferred to falling market.
1t Is just such q foundation as this that
Is essential to the beginning Of any
healthy business boom.
The main difference Of opinion now
Is whether there Is to be a brief and
rather severe trade reaction or one of
character. The weight Of evidence
seems to favor the former 1t will take
the country some months TO recover
from the shock Of q crisis that came
near to being q national calamity and
for business to readjuSt its policies to
new situations. Given, however, O set
Of conditions 80 sound aS those which
Mr.. Hoover has emphaSized in all Of
his utteTances recently, it would seem
logical 70 expect . return to normal
business by next Spring or early Sum-
mer. It would certainly be unfOrtu-
nate IL any attempt were to be made
and to force an increase in production,
where already there exists the elements
Of disturbance because Of overpFoduc-
ton.
A Lesson for Congress.
Some good features are likely to come
out Of the recent miSfortunes OF the
market. 1t should, for instance, be clear
to Congress and to regulatory bodies IN
Washington that 1t Is Of little value to
try TO encourage business while at the
same time Furnishing business through
legislation and endless investigations.
One may not subscribe to the argument
that the delay in passing tariff bill
was one OF the prime reasons for the
panic. At the same time one may feel
that the inepitude of such bodies as the
Senate, the Interstate Commerce Com
mission end the Federal Trade Com
mission has been damaging to business
morale. The country, therefore, has
the right to expect of Congress that 1t
40 lts part In re-establishing confidence,
OF the Interstate Commerce Commission
That It stop pickering over petty mat
ters and get down to brass tacks on
the railroad consolidation question, and
OF the Federal Trade Commission that
II separate its political activities from
It's legitimate work,
In another way improvement NAV
also follow the unfortunate episodes in
wan Street anairS. President Hoover
indicates the direction this should take
When, In the final sentence of his ad-
oress 10 congress on Thursday, he rec
ommenoeo as the best antidote for pres
enG llls-Work. To this might be added
fhrifE ThpfA oil =.