Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-25
STOCKS MARK TIME
PENDING EXPECTED
UPSW|NG IN TRADE
Definite Trend Lacking Dur
ing Weeks Dealings in
Equities Market.
LOW MONEY RATES FAIL
TO AID BUSINESS WORLD
Effects of 0verproduction Are Still
Apparent, With Commodity
Prices Weak.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK. May 24-This weeks
markets in equities" and fixed interest
obligations have developed no trend.
Surfeited with money at steadily de-
clining rates. Wall Street studies price
lists but hesitates to buy. 1t is walt
ing for some evidence of permanently
improved business before venturing
again into speculative fields.
Meanwhile it keeps away from those
shares into which the mild epidemic Of
dividend reductions may spread. Trans
actions on the Stock Exchange have
declined to the smallest totals since
January. Those that are recorded
mainly represent the day to day whins
Of the professionals.
Lowest interest rates have so far been
as little stimulating to trade as to
securities. The effect of reduced dis
count rates over the country has grad
ually brought about concessions to
commercial borrowers that would justify
the making of new loans If good busi-
ness prospects were in sight. The evils
Of overproduction by producers Of raw
materials and of manufactured goods
and also of construction companies and
the overindulgence of the public in
luxuries are yet to be corrected. At the
beginning of season when the mo-
mentum of trade slows down there is
less prospect than normally for an
expansion in corporation earnings.
Commodities Slip Again.
From time to time in the last two
months there have been indications
that the downward trend of commodity
prices had eliminated. The turn
seemed at hand in April. when there
was a slight rally from the progressive
decrease that had covered period of
about nine months. However, new
low average was reached this week, with
the advance in metals overbalanced by
a series of declines in prices for iron
and steel, dairy products and rubber.
The situation in this country Is par
alleled abroad, where commodities are
quoted at a new low average in Great
Britain, France, Germany and Italy.
Fortunately grain prices appear to be
nearer the point of sterilization, since
what was considered an official peg"
was placed against the price of wheat.
The record of decreasing commercial
loans indicates the degree Of def1ation
that has been taking place following the
stock panic of last November. Such
loans have been reduced 81 300, 900, 900.
or in larger percentages than at any
time since business stagnation gripped
the country in 1921. This is statistical
evidence of a subnormal condition in
business of which poor earnings and
reduced dividends are a natural phase.
Rail Consolidation.
The country is going through the
stage of starvation that frequently fol-
lows a period of excess, but which will
place 1t in much healthier condition
after few months and permit it to put
on fat rapidly once the turn comes.
1t has been apparent this week that
not much can be expected in the way of
railroad consolidation along the lines
mapped out by the Interstate Commerce
Commission. Not only is there objec-
ton to this from the carriers themselves,
but in political circles and by labor
groups. There will be movements to-
ward centralized control, such as those
recently completed by the Van Swerin-
gems in securing hold of the Missouri
Pacific, by the Baltimore a. Ohio in
creating a new route to Chicago through
purchase of the Buffalo, Rochester &
Pittsburgh, and the Buffalo g. SusQue-
hanna. and in the New York Centrals
investment just made In the Delaware,
Lackawanna g. Western.
One of the tenets of the new era
doctrine has been that railroad stocks
should be exchanged for public utilities
decides on such policy it might be well
to study some of the causes that brought
about opposition to the railroads, and
also to read from the history of the
great industrial trusts of 80 years ago
their experience with hostile legislation
The public utility companies have
been shrewd in extending their owner
ship into the field of their consumers
AS an investment, their preferred stocks
in which consumers have made their
chief purchases, have been second to
none of their class The movement has
had wide scope on the Pacific Coast
and in the Eastern Atlantic States. In
spite of 1t there are very pronounced in
dications that in three of these States
public utility regulation will be an active
political slogan in this Autumn's cam
paign.
So far as there is any visible public
objection to railroad consolidation-and
there is not much more of this than
there is of favor for mergers-it arises
out of the fear that too much power will
be placed in the hands of small groups
of men and corporations and that pres
ent local advantages will be lost through
centralized absentee control.
Copyright. 1901