Evening star., 1930-12-15
DECLINE IN BONDS
{ AROUSES ANXIETY
Market Has Failed to Ad-
vance Despite Prevalence
of Cheap Money.
BY JOHN F. SINCLAIR.

able New York situation, resulting from
"a large bank failure. While many
+. issues made new lows for the year ano
soft spots showed up under the strair
of tired support, it is the bond, not the
stock, market that is the real cause oi
anxiety.
Instead of picking up and going
ahead as most people expected the bono
market would. under long spell OF
cheap money. just the reverse has hap
pened. Prices are now at the lowest
level of the year.
People buy stocks either for invest
ment or speculation, but investment
trusts, estates and banks turn to bonds
"A price drop in bonds is much more
significant than decline in stocks.
The undigested condition of the bond
market today is very evident. Many
bonds were fioated in 1928-29 and even
during the first half of this year. New
issues placed on the market this year
up to July l totaled $4,000, 900, 600
much "in excess of the net savings OF
the community for the same period as
one banker-economist points out.
Willis Opinion.
;. H Parker Willis, New York financial
editor makes this pertinent statement
about the bond market:
a. "Of the vast issues placed upon the
stock market since 1927 probably only
a relatively small part has found per-
.manent home and the others have been
left floating about to take care of them
selves as circumstances dictated"
Responsible bankers should discourage
the issuance of any further securities
snuntil the present ones are absorbed,
and both the Federal Reserve and COM
mercial bankers might do a lot more
to reaSsure their banking correspondents
that dumping bonds at bargain prices
in Nriar IN Cach accounts ic
foolish and short-sighted.
/, It comes down to a question of
banking leadership. And there is no
.oversupply of that precious commodity
in the present depression.
Former Depression.
a B. F. Affleck, president of the Uni
Versal Atlas Portland Cement Co., has
been turning back the pages of history
in an endeavor to find the why's and
wherefores of the present depression.
He has found in his researches that
Thomas Darlington Macaulay, writing
during the bad" times of 1880, said
"A single breaker may recede, but the
tide is coming in. On what prin-
ciple is it that when we see nothing
but improvement behind US We are to
expect nothing but deterioration be-
fore us?"
Gloomy business leaders of today may
prO0G Dy redQlnR CneSe WORDS OF CIle
great English historian:
I'VE prophesy nothing. But this We
say, If any person had told the Parlia-
ment which met in perpleXity and ter
ror after the crash of 1920 that in 1890
the wealth of England would surpass all
their widest dreams; that the annual
revenue would equal the principal of
that debt which they considered an in
tolerable burden; that for the one man
of 10000 then living there would be
five men of $4,000; that London would
be twice as large and twice as popu-
lous and that, nevertheless, the rate of
mortality would have diminished to
one-haf of what it was them that the
post Office would bring more into the
exchequer than the excise and customs
brought in together under Charles II;
that stage coaches would run from Lon
don to York in "a hours; that men
would sail without wind and would be
beginning to ride without horses, our
. ancestors would have given as much
credit to their predictions as they gave
to 'Gulliver's Travels
Yet Macaulay'S statement was 100 per
cent true, and Mr.. Af1eck points out
that Macaulay saw but dinly the prog
ress that was to be.
Smiths Career.
If George Otis Smith is confirmed
by the United States Senate as chair
man Of the reorganized Federal Power
f. Commission, he will occupy one Of the
: most strategic positions in the Federal
service, fer the gnal disposition of
/. Muscle Shoals will largely rest with Mr..
Smith and his fellow members Of the
commission.
Mr.. Smith was born IN Maine, and
after graduating from Colby College,
with Phi Beta Kappa honors, he en-
gagged in geological work for four years
in Michigan, Utah and Washington.
For 10 years after 1896, he became
associated with the geological division
OF the Department of the Interior In
1909. he was appointed director of the
United States Geological survey, which
position he has filled since then.
At the present time ne is a trustee
S'of Colby College and the University of
Chicago and member of a number of
: scientific societies. He is the author
OF many works on geology and is well
known In all parts of the United States
Tor his addresses on the economics of
minerals and power resources.
Mr.. Smith has received honorary de-
grees from Colby, Johns Hopkins and
= the case School of Applied Science
In recent years he has been very ac-
tive in connection with oil production
and the proration developments in the
various States.
Copper Situation.
Z Every American interested in copper
might well profit by reading an article,
The Dilemma of Copper" in the cur
rent issue Of the Magazine of Wall
Street. 1t presents the case up to date.
and is in line with the facts which
have been given in this column during
the last eight or nine months dealing
with that subject.
But there are one or two points which
the writer, Frank c Armstrong fails
to mention The worlds copper con-
sumption for 1880 will not exceed 3OOO.-
100000 pounds. At that figure, which
Is generous, and with the developed
annual capacities of the worlds copper
mines taken into consideration. and
with more than 1900. 900, 900 pounds of
copper stocks on hand, it will take II
years before consumption-fgur an
nual consumption increasing at the
rate Of 6 per cent (also a generous
eStimate) e)-can possibly overtake the
present definitely known supply of
copper.
These figures do not take account of
the great quantities of cheap copper
which the new low cost mines Of North
ern Rhodesia expect TO bring on the
market. Every foreign producer Of
cheap copper is looking toward the cop
per market within the United States
Let that market be reserved for
American mines, and the copper situa-
tion within the United States will clear
up rapidly
(copyright. 1890 by North American News
paper Alliance
EARNINGS REPORTED.