Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-31
SUPPLY OF MONEY 4
mus. CONSERVED
Funds Now Being Stored Up
to Garry Business Through
the Spring.
BY J. C. RoYLE.

The supply Of money which will carry
commerce and trade over the Spring
and Summer Is now accommodating in
the financial reservoirs of the Nation.
Treasury officials are confident that
by Spring the reservoirs will be full
and flood of money will be flowing
over the sp1lways into the channels
Of industry and trade. %
The cold-blooded conservatism en-
gendered by the recent fiattening out
Of the security price pyramid is acting
on the now of money just now Just as
freezing weather acts on the streams
Of the country +
Inventories Low. ~
Wholesale and retail merchants. UNI
certain as to the final effect of the
financial uneasiness which has pre-
vailed since late in October, have bought
just as, little as possible to carry on
business. Stocks are growing shorter
every day, but demand Is not becom-
ing shorter. On the other hand, it Is
growing and 1t will not be long until
decidedly increased buying viii be
necessary to keep up with it. Such
buying is beginning to make its APP
pearance. *
Government officials obviously are
really confident that the conditions Of
the country are excellent. They feel
that sthe business men of the country.
will come to agree with them. This;
they say, will take from 80 to 80 days,
according to the individual business
man. When that belief is reached,
however, the Government executives
expect to see released a flood of orders
which will tax producers to the utmost.
They go even further and predict that
1880 will be better business year than
1929. The flrst quarter, they indicate,
probably will fall somewhat below the
levels established in the first three
months Of 1929, but the last three quar-,
tiers Will more than make up for 1t.
Year-End Financing. 4
Funds for year-end financing of in
tereSt and dividend requirements are in
more than ample supply. The reinvest-
ment demand is expected to be heavy.
Moreover, some of the highest execu-
tives In the financial world foresee a
diversion OF the huge sums from stocks
and bonds to industrial purposes. They
say that the huge trust funds and corr
porat1on SURPRISES which have been
thrown into the canyons of Wall and
La Sale Streets in the last three years,
and which have made possible the huge
volume OF speculation, are going to be
diverted more and more to Industrial
production. Instead Of corporation
lending its surplus in the cali money
market, they believe it will build an
other factory.
The New York Stock Exchange and
the Chicago Board of Trade and other
markets are not going to be forced out
Of business by lack of transactions.
More people than ever before have
formed the habit of buying and selling
stocks. Volume of stock and bond
transactions is likely to continue large
national flnancierS assert The public
will continue to participate and enough
money will be available to assure a
broad, consistent market. This is essen
tial, bankers feel. Not only has the
number of traders increased, but the
prosperity of the country and new In
dustrial developments have led to forma-
ton o. thousands of new companies for
which some market is necessary in or
der that investors may participate in
the new developments.
"Wash SaIes..s
The Treasury. it is known, has been
on the lookout for wash sales" de-
signed to show losses in the stock mar
ket and reduce income taxes. For ex-
ample, II a man bought stocks for $780,.
600 which now are worth only $500 OO0s
the only way he can show a loss is to
sell them for 100000. But If he wants
to hold these stocks, feeling they will 10
up again to 100000 or more, he can
sell the securities through one broker
and buy them back through another.
The law provides that 80 days must
elapSe between such transactions. but
Treasury officials know It Is not being
done In some cases.