Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-07-12
Washington Ticker
BY the Associated Press.

American capital ABROAD, WHICH was
interrupted a few months ago by the
rise of interest rates in this country, IS
reSuming. June reports indicate that
about 500, 100000 was put into foreign
obligations from the American market,
and in spite of high collateral inter-
est rates which still persist here, there
are signs that the sales Of foreign bonds
will continue to be increasingly active
toward the end of the Summer.
Why American investors are eXhlb-
iting willingness to take foreign bonds
with a 6 per cent coupon or there
abouts when money is worth per cent
on the call loan market is matter
of considerable interest to financial
observers. Two or three theories are
suggested to account for it.
In the first place. the high collateral
rates are rather elusive for the gen.
eral run of investors" remarked GroS-
venor NJ. Jones, chief OF the Commerce
Departments finance section. Few in
dviduals actually can take advantage of
the call money rates, no matter how
high these run, and the time money
rate that their capital can earn has
been noticeably lower than the call
! rate in the last fortnight.
Further, investors in the most en-
lightened class tend to take long look
forward, and to obtain today a re-
turn that they calculate may not be
obtainable in six months or a year.
Likewise, there is more of disposition
with large investors than ever to seek
diversification, on the accepted theory
that the widening of the field over
which their holdings are distributed is
| always justified and increases the surety
| of the whole return. These considera-
! tons always operate to make market
of considerable size for new foreign
securities in the United States.
AT the moment there is likely to
| be a good deal of Canadian borrow
ing in the United States. Canadian
! policy of protecting that countrys gold
reserve somewhat favors the issue of
securities abroad, and, while there has
been restriction on Canadian financ-
are likely to bring about resumption
of sales of that country's paper on
| American markets"
! Contraction in American exports
during May was most strikingly marked
, in the matter of automobile shipments
abroad. During the first four months
of the year the auto industry in North
| America increased its shipments abroad
! SIS per cent over the total exports in
! like months last year and then in May
actually fell below the 1928 record
Analysis of the trade situation affected
hasn't gone far enough to disclose the
reasons, but all agree that if the down.
ward trend continues some notions as
| to the status of American automobile
! factories will have to be revised.
I'VE haven't any reports yet to show
| whether the decline in exports can be
expected to continue" said Pike john
/ son, Washington representative of the
! National Automobile Chamber of Com
merce. Possibly it is merely tenn
porary reaction following the heavy ex-
! ports of earlier months. 1t is hardly
| likely that it is trade reaction produced
| by the extension abroad of the impor-
| tant American operations, such as the
! General Motors acquisition of the Ope
plant in Germany, and the organiza-
| ton of large Ford units in continental
countries. These enterprises have not
! yet had the time to show development
In the matter of American export:
/ generally, which fell during May to 6
| total of about $38,000,000 less than ex-
ports in the same month last year, lat
est Commerce Department figures show
that decline of European buying car
be held responsible. In May this veal
the principals European nations collec.
| lively took $40, 000,0 900 less of American
! products than during the correspond
| ing period of 1928.
! Germany, in particular, was hard hi
/ by business depression during recen
months, and the trade figures showed
that her May imports from the Unitec
States declined about 100000, Of
more than 25 per cent. from last year
Other European nations, though les!
| affected by the reparations controvers!
which was in progress much of the
| forepart of the year, also withheld buy
ing.
| In so far as Germany is concerned
| the outlook is now markedly for bettel
trade. One of the tests of Geman &C
tivity is traffic through that country
great water artery, the Kiel Canal, ant
the canal tonnage handled In the iates
month reported is 10 per cent above tn
total in the previous 80 days.
When it came to submitting to Gov
eminent regulation, railroads AFTER
long struggle succeeded in establishing
the paramount character Of Federal au
thority in their field. The younger au
tomobile transport has grown up il
practical acceptance of the theory tina
control over its operation is a Stat
matter. Now, as the airplane pushe
into commercial usage on a natlona
scale. there seems to be evident an or
ganiZed demand that its use should o.
considered matter for Federal super
vision. and that States should in prac
tice resign authority to the Nationa
Government over air operations.
This matter is likely TO be prett
fully tested out with the coming ses
sions of State Legislatures over Tn
country this year. The industry
both its manufacturing and operating
branches seems to prefer the Fedora
control. The argument for it, as set gu
by the Federal aeronautical organl
cation, is that there is imperative nee
for uniformity throughout the Unite
States in the matter of airWorthlnes
of aircraft, competency of airmen, an
most particularly in the operation @
aircraft in the air"
THE simplest way Of accomplishin
this seems to be the enactment OF
State law which would. in effect. re
uuire all interstate aircraft and a1rme
/ to be federally licensed" the last al
commerce bulletin says on the pom
This at once sets up identical require
ments and obviates the necessity OF
State inspection system, with It's al
tendant difficulties, complications an
expenses"
IF this view obtains, the outlook fc
regulation in the air will be fairly sim
pie. 1t remains to be seen whethe
legislatures will assent. So far, mo:
of them have left the subject untouchet
which doesn't entirely satisfy the avl
,, alton world. Many aircraft are no
, | operating without Federal license, an
it is the contention of the Governmer
that the unlicensed craft have moi
than their share of accidents. and Ir