Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-17
Business World Is Confused
in Attempt to Estimate
Result of Damage.
PUBLIC PARTICIPATION
IN MARKET STILL SMALL
Drop in Retail Trade Reflects
Growing Tendency to
Economy.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, August l6-Up to the
FIRST of August, when nine months had
elapsed since the elimination of the
1929 stock market panic, the watchers
in the observation towers of business
had conferred their attention on reports
from industry, from merchandising,
from transportation and from public
utility operations, and as a composite
index OF all, on the commodity price
average, in taking their reckoning of
the future course of trade.
From time to time the rise and fall
in securities was accepted as a true
barometer of conditions, but after the
false forecast of last April, Wall Street
judgment on the outlook had been at
discount
Today the eyes of the country are
turned from industry to agriculture
The problems of business and markets
for stocks are linked more closely with
those of the farmer, especially with the
growers of corn and cotton and the
raiser OF cattle, than in a quarter of a
century. There is no little significance
in the decline in Federal Land Bank
bonds this past week, when other tax
exempt issues have been strong and the
Government Is borrowing on the easiest
terms for Short-time notes in its his
tory.
New Element to Appraise.
Business was preparing itself for
greater activity when the normal
Summer dullneSs was to give way, under
the release of postponed purchases,
post-vacation factory activities and
crop movements, to the full-speed-ahead
program that comes in the Autumn of
years that are in good balance indus
trially and agriculturally. Now there
has been added to the troubles growing
out OF def1ation in commodities and in
stocks, and to the necessity for adjust
ing production of the mills, farms and
mines to the requirements of the con-
sumner here and abroad, a new handicap
to immediate progress in the nature of
crop disaster more serious than any
since 1901.
Naturally trade and the stock market
are confused by this new and uifex-
pected element injected into the situa-
ton. So there is further diffldence on
the part Of buyers of merchandise and
of securities and will be until the reck-
oning OF the new drought effects
has been made and the net losses esti-
mated. It is true there are always
compensations arising from a disaster
OF this sort. 1t Is fair to present them
and to take courage from them. In
variably, however, they fall far short
of the money loss, the loss of stamina
and the depreciation Of farm land and
equipment that follow.
PubIic's Buying Attitude.
The extent to which the public is
economy-m is shown in the July
reports of the chain stores which cater
to a small price unit trade and by
those specializing in meats and gro
ceries. The sales of these two branches
of retail merchandising were off per
cent to over Is per cent. Dealing with
larger units and rejecting more closely
the conditions in the farm regions are
the major mail order houses, whose
gross earnings last month were 81 per
cent and 14.9 per cent under the equiv
alent period in 1929 and whose stocks
this week have been affected accord
ingly.
The iron and steel trade picks up
slowly and not in the way its leaders
have been predicting. There are adj
dltional gains in employment this week
in the automobile field, which help to
Offset losses elsewhere. Railroad Car
loadings still compare with the heavy
volume of traffic moving last August
and so are indicative of poor gross and
HeC cdIHlLBS LOT ILLS InOHCu, WIFI pre-
liminary figures for July showing little
Improvement over those for June.
Again we may emphasize the fact
| that railroad disbursements appear Sc
cure. OF about 500 dividends that have
| been reduced or passed in the last seven
months, none of an important carrier
has been affected. 1t may not be pos
sible to make such a statement four
months hence, for several must be re-
vised If net revenues do net improve.
1t is an indication of great financial
| strength and of careful and wise man
| agement that, with the greatest ratio
| of net loss since last November of any
| department of American business, the
carriers so far show the smallest pro-
portion of dividend change.
Unsettlement in Stocks.
Taking all of these facts into con-
sideration 1t Is not strange that stocks
have been unsettled this week, with
a large number dropping to the lowest
prices Of the year. This includes mem
bers of nearly all of the important
manufacturing and distributing groups
| and few from the carriers. Little by
little the advances that occurred in
! June have been whitfield away.
| Copyright, 193ol