Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-17
SOUND INVESTMENT
BUYING REPORTED
Market Review Declares
Business Shows Further =
Recovery Progress.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, May 17.-Prompt re-
covery in many branches and strong
response to favorable announcements
have shown during the past week the
underlying soundness of market con-
ditions, and the character of the in
vestment buying support which Is
ELECTED whenever attractive opportu-
mites for purchase of securities present
themselves, says Henry Clews g. Co.
In consequence, not a few groups OF
issues have exhibited a power to in
crease in value, which had not been
expected to develop so decidedly, or so
promptly after the recession of two
weeks ago. Business conditions gen.
orally have given new and unmistakable
evidences of recovery, and in some
branches of trade, sales volume Is as
good as, or better than at this time
last year. This, for example, Is par
ticularly true of the agricultural I'M
plement and machine tool industries,
and shows that the problem of i'm
proving the present situation Is not one
which affects underlying conditions in
business, but is merely the bringing
about of satisfactory adjustments Of
supply to demand upon an appropriate
price basis.
Copper Recovery.
The state of things that now exists
is well illustrated by the movement
OF copper metal and copper stocks.
After having undergone q sharp re-
duction of price of IA cents, copper
metal was cut during the past week
to figure not far above IL cents. The
result was to bring about tremendous
buying demand, especially Tor export.
1t is now clear that what WIS holding
back recovery in the copper business
was not lack of such demand. On
the contrary, the need for copper was
never stronger, and in some foreign
countries, there appears to be practi-
cally copper famine, due to the with
holding of orders over a long period in
the belief that prices would soften.
Already the purchasing of copper has
been SO strong that 1t has been possible
to advance the price to 10 cents, and
as soon as the supplies held in weak
hands are disposed of, an advance to
IA cents will be probable. Accumula-
lions for the month of April announced
on the 18th of May as having been
about 100000 pounds, or an even
larger figure than had been expected,
have had no effect upon prices, due
to the fact that purchases since the
than offset this entire April surplus
Copper shares, moreover, after taking 8.
severe drop upon the announcement of
the reductions in the price of the metal,
nave shown excellent power of recovery,
and are now in most cases quoted high
er than was the case before the recent
reductions Of metal quotations were an
nounced
The problem Of the future of copper
shares does not rest primarily upon
the price of copper as is generally sup
posed, but upon the scope of demand
Tor the metal. President Hoover's busi-
ness survey committee has announced
an enormous program of construction
for the year 1880 in public utilities and
allied industries. Identification Is pro-
ceed1ng rapidly in many directions, and
the outlook for the electric manufac-
turing shares was seldom better. This
means strong, steady demand for cop
per at home, as well as vigorous buy
ing from foreign sources. The result
should be to reduce the accumulations
now on hand in a very material de-
gree before many weeks have passed,
and so to clear the way for renewed
prosperity in the industry.
Lesson for Other Industries.
The copper situation affords a lesson
Tor other industries, in which large
STOCKS nave accumulated and dificulty
has been experienced in working of in
ventory. Elimination OF overproduction
and normal activity for the future will
easily be assured through the adjust
ment of prices in such a way as to
carry off stock on hand and provide
an area OF consumption sufficient to
take care of output in the future. This
is being appreciated by not a few in
dustrieS in which there Is q surplus of
goods. The reductions in prices that
have taken place in recent weeks and
months are not an indication of dis
organization or poor business, but repre-
sent the natural method of restoring a
satisfactory equilibrium or balance.
Building, for example, is again showing
decided activity. 1t has been helped
materially by the establishment Of
lower prices for steel. copper-including
manufactured copper products of vari-
Gus kinds such as roofing, lumber and
other items. These changes have made
it worth while to resume construction.
The same principle is being applied in
different way in the oil industry.
Prices here had reached so low point
as to fail to stimulate consumption.
The moderate raising of prices for crude
and for gasoline has left consumption
undiminished, but at the same time has
given the producers very much better
revenue.
Their problem is now merely that of
maintaining the curtailment OF produc-
ton, and continuing the moderate re-
duction of Oil and gasoline in storage,
which began some weeks ago. Prospects
for the attainment of these objects con-
tinue good in spite of temporary local
difficulties. The reorganization and in
ton Of ~ a
long time, but is producing results. The
rubber industry is prof1ting greatly by
the access 1t now enjoys to low-priced
and reasonably stable supplies of raw
material which place 1t in a position
far superior to that which 1t has oc-
cupied in past years. AS these readjust-
ments proceed, and become thoroughly
confirmed, the various industries should
have no difficulty in resuming their
normal balance between supply and de-
mand with corresponding prospects of
profit
Cheap Credit Still Factor.
Access to cheap and abundant credit
facilities, has now become so widely
recognized as constant factor in the
market situation and is so generally
taken for granted that little is heard
of it. 1t remains true that the main
tenance of opportunities for economical
and effective supplying of funds is es-
sential to the wellbeing of the invest
ment list, particularly at the present
stage. Fortunately there seems to be
no doubt of the continued accessibility
of credit in abundant volume and at
low figures, for an indefinite period Just
now, and for some time to come, the
desire to aid PREPARATIONS financing will
prove an effective element in the main
tenance of existing money conditions.
The great reduction that has taken
place in the volume of brokers' loans
during the past two weeks. leaves the