Evening star., 1929-07-01
TEASING OF CREDIT
STRAIN FORECAST
Stock Prices in June Reverse
Trend Established
During May.
BY CHARLES F.. SPEARE.
ecial Dispatch. to The Star.


Of June will take its place in Stock Ex-
change history as a period Of normal
daily transactions, but abnormal move
mentS In the price Of speculative and
reimbursement securities.
During May there was q depreciation
in stocks estimated at between $2,750,-
100000 and $4,000, 10000 This was
caused primarily by the heavy losses in
motor oil, iron and steel, copper, chem
ical and public utility shares. June
has reversed the trend, but has not
overcome the shrinkage in the previous
month, for there is still q relatively
stale situation in motor, oil, mail order
and chain store issues. which to some
extent offsets the buoyancy Of late In
public utility, rail, chemical and iron
and steel equities.
high average, both for industrial and
railroad stocks, outstepping the previous
average of November, December, March
and May.
Expansion I'm Utility Shares.
June has essentially been q month de-
voted to the upbuilding of prices OF
public utilities and rails. It Is interest
ing to see how great an expansion has
taken place so far this year In the COM
mon stocks Of the holding companies
Of the power and light industry. Some
Of the most important Of those listed on
the New York Stock Exchange and
given In percentages Of advance are the
following: =
American & Foreign Power, s5 per
cent; American Power 6E Light, so per
cent; American Water Works, IFS per
cent; Commonwealth Power, 13S Der
cent; Electric Power & Light, 90 per
cent; North American, so per cent; Pa
cific Gas & Electric, 30 per cent: Public
Service OF New Jersey, so per cent, and
United Corporation, IS per cent.
The sensational movements, however,
In public utilities are those that have
occurred on the New York Curb Market,
where American Superpower has gained
ITO per cent. Buffalo. Niagara & East
ern S5 per cent, Consolidated Gas Of
baltimore 90 per cent, Electric Bond d
Share 60 per cent, Electric Investors ITS
per cent, Mohawk-Hudson Power ITO
per cent, Southeastern Power 6 LIGHT
go per cent, United Gas d Improvement
90 per cent and United Light d Power
about Is per cent. ~
New Issues Overstimulated.
While the composite average price of
industrialS, which includes the public
utilities, Is IS points higher than a year
ago, that OF utilities alone is over 40
points above the level of the end of
June, 1928. This fact has occasioned
not little proflt-taking in the public
utility group by those who have been
identined with 1t for many years and
VINO now feel that in the excitement of
speculation and the mood for consolida-
ton the newer utilities issues have been
overstimulated and have reached q level
tnat from either speculative or invest.
ment standpoint Is unreasonable.
Coming to the railroads, we find that
In establishing q new high average for
tne year they have logically been fol-
lowing the public utilities and the in,
oustrlalS and taking up some Of the
sack tnat has existed between them
ana the otner Two groups In the Way of
income yield. There seems to be no
other explanation Of the belated move.
ment In carrier stocks, which for a long
time have been entitled to greater re-
spect on the basis Of their earnings
those for May being of brilliant char
acter and running close IN many indi-
vlouaI instances to the net returns Of
the record year of 1895.
r. C. C.'s "PutterinR."
There Is certainly no announcement
to buy the rails from ANYTHING that
has developed in Washington, save the
O'Fallon decision, which Is acaden-
lcally favorable and in years to come
may eStapHSn state OF mind among
investors similar to that developing
slowly after the United States Supreme
Court decisions In the Southwestern
Bell Telephone, the Consolidated Gas
OF New York and the indianapolis
Water Works valuation cases. At pres
ent, however, the decision is minirnized
by the bitter fight taking place In the
Eastern railroad territory and over
which the Interstate Commerce Com
mission has plainly lost its control.
Money Stringency Near End.
With this weeks increase Of $l22,-
000,000 in brokers' loans, the total OF
such loans has again mounted to within
small figure Of the record. of last
March and coincident with the new high
averages mentioned, both in industrials
and railroad stocks. The total bills dis
counted of the Federal Reserve Banks
have also expanded and are now once
more above $1,000, ,00O, 900 and approxi-
mately the equivalent Of those at this
time last year. But there is no appar-
ent anxiety over the money situation.
The fact that call loans have renewed
this week at 10 per cent has made no