Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-13
END OF COMMODITY
PRICE DROP SEEN
Survey Shows Whole Group
of Raw Materials Has Prob
ably Reached Bottom.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, June 13-One of the
largest of Americas corporations,
which is operating in the public utility
field, through its analytical depart
ment has made a close study of the
commodity price situation and has ar
rived at the conclusion that the bottom
has about been reached for individual
commodities and for the average OF
the group. The study on which this
decision Is promised has been long
and elaborate one and is an important
contribution to the moderate list Oh
favorable influences affecting the busl-
ness world.
The decline in commodities has con-
tinued for many months and has been
one of the factors in the poStponement
of industrial recovery. The slump has
been persistent and pronounced ever
since the stock market panic OF last
Autumn. 1t is represented in a drop
in prices since then of between 10 ana
IL per cent.
Declines General.
The general commodity price average
has been affected mainly by the re-
action in agricultural products, in the
metals, in rubber, silver, sugar, coffee,
silk and hides. Nearly every week since
November one or more leading COM
modities has broken below its previous
level. In the case of silver, rubber and
sugar the quotations have been under
those quoted for more than a generation
and in some instances were the abb
solute prices in the history of the COM
modify. ;.
It has been argued by many that 1t
will only be when commodity prices
are stabilized that permanent recovery
in business can be expected. Therefore
the prediction that the bottom has been
reached seems to bear out the con-
illusions Of various statistical organl-
cations and surveys made by banking
institutions that definite signs of in
dustrial Improvement will be apparent
late in the Summer or in the early
Autumn. BY that time it is expected
that inventories will have been reduced
To a normal basis and, instead of there
being a buyers market as has been the
case for the last nine months, the ad-
vantage will be with the sellers OF raw
materials and manufactured goods.
Similar conclusions as to the termlna-
tion of the commodity price decf e
reached by the corporation whose y
has Just been completed have also n
indicated by Government agent .es.
They proved to be little ahead of the
times. The June circular of the Ma
tional CITY Bank said of the commodity
price situation "the feeling is growing
that. considering the drastic character
of the declines in some articles, the
final resistance level cannot be far of. y"
Buying on Large Scale.
Opportunity has been provided
THROUGH the price decline for the
accumulation of large amounts of COM
modities entering into the manufacture
of goods. This has been taken advan-
tage of on a large scale by corporations
that have had substantial cash re-
sources and have been buying COM
modities for future deliveries. The effect
of this will be shown in more favorable
operating profits later in the year ana
during 1881.
There are also indications that some
of the dividend reductions announced
recently and supplemented by state
ments that this policy was adopted IN
order to conserve cash resources" we're
Influenced more by the desire to buy
cheap commodities than by poor earn
ings Last year, when securities were
weak, a number of corporations used
their cash to buy their own stocks at
what they considered greatly depre-
ciated prices. The trend now is rather
toward taking advantage of low COM
modify prices in anticipation of broad
demand for manufactured products
when the present buyers strike
eliminates.
(Copyright, 1907