Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-02
DECLINE IN STOCKS
LAID PRIMARILY TO
REDUCED DIVIDENDS
Political Campaign Is Also
Declared Contributing Fac
tor in Situation.
EFFORTS TO CUT DOWN
UNEMPLOYMENT PRAISED
Industrial Recovery Held Contin-
gent Upon Jobs for Idle
Workers.
BY CHARLES F. SPEARE.

NEW YORK, November Ito some
extent the decline in stocks this week
was in anticipation of probable changes
in political majorities in Congress in
next Tuesdays elections. In greater de-
gree it was caused by the emphasis
placed on poor business throughout the
country in the September quarterly
statements of earnings, in reduced div
idends, in the absence of improvement
in railroad car loadings and in the
falling index of electric power produce
ton in the great industrial centers OF
the East.
Although there are definite signs of
a turn upward in the curve of produc-
ton of manufactured goods and legiti-
mate reasons for believing that the
prices Of the most troublesome COM
modities have been stabilized, conf
dence is still lacking.
There is no leadership in the market
Banking interests are apathetic when
not deeply respondent. They speak and
act with less assurance than they did
before errors of Judgment and the infec-
ton of an inflated price list brought
heavy losses to themselves and to their
followers.
Drive for Jobs Helps.
The Nation wide efforts to combat I'M
employment and thereby increase pur-
chasing power gives leaven to the situa-
ton. It will work slowly. With fewer
men out Of jobs or on part time than
in any other industrial country, the
United States is attacking this condi-
ton with greater intelligence and with
a more concrete program than Is ex-
hibited abroad, where totals of the idle
increase and political discord prevents
an alienation of the trouble.
The stock market of today resembles
a battle line that has been in disorder
for months. but which. by the CONSOLE
dalton of various positions at its weak
est points, Is able to show strong resist
ing power. There remain, however, vul-
nerable spots. These are known to the
enemy. Gradually they will be protected
and the area which they cover removed
from the danger zone. This requires
time, patience. faith and good general
ship. A satisfactory outcome Is inevita-
bic, where resources are abundant.
Latterly. American investors appear
to have abandoned hope for the recov-
cry OF one Of their primary industries
namely, steam transportation. There may
be some excuse for this in the current
exhibit OF net earnings as well as from
the doctrine of despair preached by
prominent railroad managers; also in
the astonishingly bad judgment some
Of them have displayed in making in
vestments at the top of the market in
fields foreign to their own lines.
The surplus Of corporation Is estab-
hshed to take care of contingencies such
as those now existing. How could the
Board Of Directors of any, railroad,
which has been earning from so to 100
per cent over its dividend requirement
in recent years. justify a dividend re-
duction in IL months period when the
dividend was still earned, although by a
small margin?
Investment Buying.
Evidence that investors in securities
VIII buy them when they reach a certain
level Of return and will take chance on
conditions working back near normal
Is given in steady absorption of stocks
OF not only the standard railroads, but
those OF industries and representatives
IN the power and light field. Something
OF the same kind of response to abnor-
NAL conditions Is shown in foreign and
domestic buying Of cotton and of copper,
after these commodities had fallen below
the cost Of production. Further adjust
ment between wholesale and retail fig
ures Is necessary, however, before there
can be sound recovery in the health of
the business world. The margin be-
tween them Is too conspicuous to have
any other effect than that of creating a
strong buyers resistance.
Call money this week has been offered
as low as per cent, which resembles
the condition of the short term credit
market in other notable periods of de-
preston: Brokers loans are at the low
est level in three and one-half years.
one may borrow money carrying late
into next Spring at concession FROM,
3 per cent. A year of rapid and most
painful dedation, both in securities and
commodities, has elapsed with no break
IN the rugged banking structure of the
country.
(CopyriKht, 1o30)