Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-28
CONTINUED BUYING
ADDS TO STRENGTH
Market, Already Substantial,
Gains Power Through
Steady Investing.
BY CHARLES r. sPEARE.

important 10 note that most OF them
have been In leading issues OF various
branches OF industry and transportation.
II mas been market Of substance and
not OF roth. This Is its strongest claim
TO permanency and explains why SO
many astute investors are drawn to 1t
and are unwilling to cash in their pro-
nrts. although these have reached q
fabulous size.
TO last weeks catalogue of 100 new
high record prices, of which one-tnird
were in the long neglected railroad
shares, has been added another i'm
pressive list In the week closing TODAY
This includes such representative stocks
as American Telephone & Telegraph,
United States Steel, General Electric,
Westinghouse Electric, Bethlehem Steel,
International Harvester, Consolidated
Gas, North American, Great Northern
Baltimore & Ohio. New York Central
Lackawsnna. Union Pacific and South
ern Pacific. There are others that have
made equal or larger gains but whose
history Is comparatively brief.
Industrial Activity Noted.
That there has been q certain amount
Of distribution of stocks while popular
issues have been ascending from one
level OF prices to another Is doubtless
true. The volume Of this, however. has
not so far been great enough to change
the channel into which most of the
speculative and investment funds have
been flowing. The country is deeply
impressed by the universal evidence of
industrial activity and business profits.
AS this has been more positive this
week than ever, II Is not strange that
there sh1lld have been repeated de-
monstrat:ons In securities that directly
profit from these conditions.
The present stock market Is as much
above the average Of May as May was
above March or March above December.
Buying is rs confident today As it was
six months ago; more so than In the
Spring. The fact that brokers' loans
increased $95.000.000 this week and
have expanded $3.50, 900 900 In the past
five weeks excites less attention than
the small totals of three months ago.
Call money this week averaged about
per cent For July the borrower on
collateral will pay his broker around 10
per cent. Time money Is "a to / per
cent higher. Commercial loans are
expanding along with loans for Wall
Street. So far the Federal Reserve has
not given the slightest indication in its
buying policy more toward acceptances
or Government securities than 1t will
lend aid to the credit situation. This.
however, 1t cannot long delay If q serious
money rates is to be avoided.
Bigger Profits Roll In.
The facts to which the stock market
gives immediate and full response are
those like the increase in Bethlehem
Steels dividend. with a surplus shown
for six months over double that Of a
year ago when no dividend was being
paid; the $50 900 900 gain in combined
sales indicated by the General Electric.
and Westinghouse Electric, with the
latter's profit In the past three months
nearly 100 per cent greater than 1928.
the higher returns on the stocks of
various oil companies, though the oil
industry is supposed to be in a critical
state, and on those of chain stores,
chemicals companies. manufacturers Of
proprietary articles, airplanes, distri-
b1tors of dairy products, and the strong
cash showing Of numerous makers Of
automobiles.
These are at some time or another
transferred to the stockholder in the
form Of cash or stock dividends. The
average buyer of equities" today is
looking ahead two to flve years for the
full realization Of the benefits of con-
solidation or more efficient manage
ment and distribution. In this re-
spect he differs from past generations
of security buyers who dealt with the
nearby prospects and thought more of
income than of capital appreciation.
1t Is astonishing how many supposedly
shrewd investors have only recently
entered the market and purchased
stocks at the current high levels with
the same expectation Of future profits
as was held by those who bought the
identical issues two years ago.
Utilities and Rails Prosper.
country has been rounded out this
year SO that there are less spotted
conditions. The activities of the in
dustries are reflected not only in the
public utilities, with their increasing
sales Of commercial power, but in the
highest volume of railroad trafiic ever
known at this season. June will show
results that ought to convince the most
pessimistic railroad operator that he Is
living In pretty good times.
An incident Of the week that reveals
the power exercised by success In new
notations was the offering Of the COM
Shenandoah Corporation. This Is q
sort of uper-investment trust. It
brings together great combinations Of
industrials, banks, trust companies,
finance corporations and public utilities.
Nearly every agency that has been con-
spicuouS the last few years as money
maker is represented in its portfolio.
Behind 1t is a management that has
been remarkably successful in nearly all
of its undertakings. A unit OF the
Shenandoah shares. therefore, gives
participation In q wide list Of corpora
tons.
More and more the American investor
Is turning over his funds to such COM
panies and this movement Is stimulated
by the reports Of profits which they
have taken in the past six months from
trading In securities.
Trusts Buy Big Blocks.
One investment trust this week adj
vertised the fact that 1t had $40, 000, 600
in unrealized profits. Many others have
from one-half to double the amount in
book profits to profits already secured.
The investment trusts have undoubtedly
stripped the market of great blocks OF
Its most valuable shares and reduced
the floating supplies. They still have
large sums In the call money market
available to invest when the proper
time arrives. There Is always the pos
sibility where there has been such con-
centrated buying and buying Of the
same class of stocks, that all may stimuli
taneously have q desire to secure some
of their profits. There is an element
Of market weakness In the investment
trusts present heavy commitments.
Much has been said Of their potential
buying power. They may also at times