Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-12
MARKET MAINTAINS
STRONG UNDERTONE
Public Showing Disposition
to Hold Stocks Despite
Credit Situation.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, May 1.-THE strong
moments of the stock market recently
have been more important than its
weak ones. There is no undercurrent
of distrust running through it.
The public holds its securities, al
though it is compelled to pay carry
nary conditions to force liquidation.
This cost so far in May has averaged
to the customer of a Stock Exchange
house around IL per cent Three
days of IA per cent renewals made
only slight dent in the price list.
Good stocks are being bought above
the quotations Of last March. Poor
ones are being neglected. The public
is wise in its selections. It's faith in
the future of American business has
not so far been unsettled by credit
stringency tariff revisions, foreign
political and financial conditions or by
the slump in the value Of farm prod
uctS, which has made this disastrous
week for the wheat grower.
Price Average Holds Steady.
Average prices, however. do not
change much. The surprise is that
about where it was at the end of
April, except for limited number of
industrial and public utility shares
that have been moving up on the eX-
pectation of consultations, increased
dividends or additional rights" The
railroad group has been isolated from
the rest OF the market. Half dozen
of its most prominent members sold
this week at the lowest Of the year:
others have been within fraction of
the low. The demand on the carriers
UhnQf Hn-Ir
Is another instance where publicly reg
ulated corporations have stop put on
their earning power, however well they
may be managed or however strong
the tide of prosperity may be running
in the industrial world.
The season of the year is at hand
when more attention must be given TO
the outlook for the harveStS in estin1a-
ting the future of business. 1t happens
now that large surplus from last
years wheat crop is being carried over.
with the prospects Of a yield of Winter
wheat in excess of that in 1928. The
Government report as of May indi-
Gates $50, 100000 bushels, which Is As
900, 900 above the five-year average.
The big production States of Kansas,
Nebraska, Oklahoma and Washington
promise smaller crops. The States of
Illinois, Pennsylvania, Ohio. Indiana
and Missouri on the other hand, have
remarkable harvest in prospect.
Grain Markets Sag Sharply.
The effect of such large surplus
and additional supplies has been de-
moralizing to the grain markets this
week. Wheat is off from 8 to IL cents
a bushel, corn Z to cents and oats
2 to cents. A comparison with the
prices of year ago suggests why the
farmer feels the need of some relief,
although this may have to be taken
out of the railroads and the average
consumer in the form of lower rate
schedules and higher tariffs.
Take the case of the farmer who in
May, 1928, held 1 900 bushels of wheat,
1000 of corn, 1000 OF oats and 1000
of rye, and hoping for higher markets
than existed then, has carried them
through to this month. The value of
these holdings IL months ago at the
market was approximately $4,000. To-
day it is less than 1920, or shrink
age of over 80 per cent.
Contrast this with Tom, Dick or
Harry who in May, 1928, bought 10
shares each of International Harvester,
General Motors, United States Steel
and AtchiSon common, the stocks OF
companies that are closely related to
agriculture. The first cost OF these
shares was about $4,000. All of them
have either been split UP or their hold
ers have been given rights" These
changes have been taken into account
in computing their present value, which
is approximately $4,000.
So, while the farmer has had 50
per cent shrinkage in his capital In
a year the capital appreciation Of, let
us say, the induStraliSt has been nearly
35 per cent. It would be much more
if broader list of securities, including
public utilities, we're to be used In
making the comparison.
Commodity Prices Down.
One Of the many anomalies Of the
present situation is that individual
stocks are selling at approximately the
highest average in their history with
prices of wheat at the lowest in five
years and wholesale commodity prices
lower than they have been in nearly
two wears. The fear Of President SIM
mons of the New York Stock Exchange
that liquidation in bankers loans would
turn the unemployed proceeds into
commodities and create worse inf1a-
ton than we now have in stocks Is
not one over which great amount OF
sleep need be lost.
The discomfort of the farmer, how
ever. is a factor in the situation that
cannot be ignored. for unless the old
crop for wheat moves out more rapidly
or there is a decided reversal in crop
conditions before Winter wheat natures
In June and is marketed in July, con-
siderable section of the West and
Southwest will experience the effect Of
diminished purchasing power. No one
is satisfied apparently with the new
tariff BILL which has gone much beyond
the original conception of what Presi-
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