Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-01
STOCKS EXPECTED
TO REFLECT TRADE
Restoring of Public Conf
dence Held Likely to
Aid Market.
BY CHARLES F. SPEARE.
lecial DISPATCH to The Star.

NEW YORK, November 30.-The
point has now been reached in stock
market affairs where prices are more
apt to keep in step with developments
I in the business world than with tech
nical conditions in the market itself.
Securities have realized a substantial
| recovery from their low level of Novem-
Der 10. Offerings of distressed" stocks
are drying up. The volume of daily
transactions has declined to what was
regarded as normal before public con-
troll of the market expanded totals 100
to 200 per cent over those of other
periods. There is still a considerable
amount of cash buying Of common
stocks for appreciation and for yield,
though this is not more than rs per
cent as large as in late october and
early November.
The dramatic aspects of the Wash
ington industrial conferences have now
been presented. The next phase OF this
movement to establish healthy mind
among producers and consumers, and
in the ranks of the employed, will be
followed by definite action toward
stabilizing output. Candor conpels the
statement that in most instances the
figures that have been published re-
garding next years expenditures by
CORPORATIONS
what had been planned prior to Novem-
Der /. The amount of additional out
lay over the original 1880 budgets is
comparatively small What the confer
ence has accomplished, and the thing
for which it deserves most credit, is in
being able to continue programs that
were about to be contracted and thereby
would have duplicated in the industrial
world the unsettlement recently expert
enced in the realm of finance.
Public Regains Confidence.
Already there is a notable change in
public psychology toward recent Wall
Street episodes. The first effect Of these
was indicated in cancellations of or
ders that had been entered on the books
of manufacturers and a minimum of
public buying of everything not needed
in the daily life Of the people. This
mainly affected articles of luxury. With
in the past week former frightened and
depressed buyers who withdrew their or
ders have renewed them. Retail trade
has improved not only because the
weather has been more stimulating, but
as result of the changed point Of view
toward the permanent consequences OF
the stock market panic.
Continued emphasis on the strong
banking situation, on the Debated con-
dition of commodities, which have
again declined, and on the fact that
unlike other years of crisis. as 1907
and 1920, there are no big inventories
to deal with, has done a great deal to
offset fears that the shrinkage in the
prices of securities would have as a
sequel a prolonged season of slack in
dustrial production and unemployed.
1t is frankly recognized, however,
that the country cannot entirely escape
punishment for the unwarranted in
flation of stocks and the excess of
such stocks created during the past
year. It is true that within the month
there have been many dividend in
creases. More will probably be an
nounced before the end of December.
Most of these have been made by cor
porations whose earnings are least likely
to be affected by business establishments
natural to such a time as the present.
On the other hand there are distinct
evidences of decreased earnings which
will make the December quarter Of
the iron and steel companies, automo-
bile manufacturers, steam transporta-
ton lines in the East, copper producers
and the public utilities In the chief in
dustrial centers compare unfavorably
and also with the corresponding period
Of 1928.
Leading Industries Prosperous.
Industries that must bear the brunt
of terrific stock market collapse have
been highly prosperous for several
years. AS they have not dissipated
their resources within this period, they
can live for a considerable time on the
fat that they have accumulated. It
would take more Of business depres-
~ fnPR0
them into economies expressed in re-
duced dividends.
This would not apply, Of course, to
those new adventures in the field of
finance, who, with issues Of common
and preferred stocks, bought up large
blocks Of outstanding corporate issues
at eXtravagant prices and have seen
their liquidating values suffer a ire
mendous decline. Fortunately, few Of
| them have been borrowers at banks and
the amount of their fixed obligations
is small relative to their total capital.
For them the period of readjustment
| will be long and severe, and an I'M
pleasant one for those who bought their
stocks at subscription figures.
The money outlook favors business
as well as securities. There is no longer
excuse Tor delaying programs of ex-
| pansion on the score Of the high cost
of capital. At no time within the
past two years have there been such
! favorable opportunities for the proiec-
| ton OF public works as at the present.
Likewise, the market for bonds that
| must be sold to provide means for such
| work by States and municipalities is
IN an excellent position to absorb new
issues. The Government will shortly be
| able to sell treasury notes and discount
bills on satisfactory terms and we'll be-
low the rates at which maturing certi-
flcates were placed in the past IL
months.
Lower Rates Expected.
With time money we'll below per
cent and call loans off1cially at Az Der
cent, though actually being recorded as
low as and 81 per cent, funds viii
seek an outlet in the many channels OF
business that need them and in various
| forms of senior securities. AS there
is every indication that Wall Street re.
| quirements for money will be relatively
small for some months and that there
VIII be a certain amount of hesitation
in industry throughout the Winter, it /,
fair to anticipate rates lower than those
now prevailing and a rediscount rate ir
New York after the first of the year Of
4 per cent.
Since the Summer Of 1928 there has
been comparatively little foreign financ.
| ing in dollars. In fact the norma
retirement of foreign Government loan,
listed In the American market account,
! for much larger sum than that Of new
| Issues placed. The radical change II
the domestic money situation has al
ready led to applications for credit!
here by European borrowers, who were
/ IL - .lzk -.