Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-18
Market Placed in Technically
Sounder Position During
Last Week.
DECLINES IN COMMODITY
PRICES APPEAR CHECKED
Action Of Copper Producers in Ad-
vancing Quotations Called
Good Strategy.
BY CHARLES f. SPEARE.

special OiSpatCn 10 Inc STAR
NEW YORK, May 17.-For several
dead center. New high prices In q
small list Of shares are balanced by
new low prices for the year in others.
There is resistance to such conserva-
tive speculative movements for rise
and opposition to professional efforts to
bring about further liquidation.
The effect Of this Is to destroy in
itiative and to intimidate the public
In volume the market has dropped
down to the smallest proportions since
February.
It is q market, however. in which
considerable amount of confidence may
now be assumed. It has cancelled the
excess values of March and April and
ings in the March quarter and the de-
lay In business recovery that had been
predicted for the Spring months. Tech
nically 1t Is sounder than 1t has been
since the early part Of the Winter.
Sentiment toward 1t Is passively bullish.
Dividend Record Scanned.
There is still necessity for careful Sc
lection of common stocks, for the eff
fects of six months of acute illness have
not yet reached their full proportions
in the price lists. Many corporations
have been carrying on and paying the
regular dividends out OF the earnings
Of 1928 and 1929, in anticipation Of an
early recovery. It Is significant that
while between December and the end
Of March the number Of favorable div
idends declared greatly exceeded those
that were reduced or passed, In April.
for the first time, decreases exceeded
increases. So far this month they have
been at about balance. The reduc-
ton In the rate on American Loco
motive Co. common stock was one OF
the long deferred acts Of board OF d.
rectors that had reluctantly reached
the decision that it could no longer pay
dividends out Of surplus.
The other side Of the situation Is
that q pronounced improvement has
appeared in some industries with bet
ter trend visible In others. Quite the
most important incident In trade al
fairs his week has been the advance IN
price of copper metal to Is cents after
1t had been reduced, first from Is cents
to IA cents and then to 122 cents. At
the latter figure consumers here ana
abroad felt that the time had come
for them to replenish depleted supplies
Of metal. Their buying has cut down
surplus stocks at q rate never before
approached In SO short time.
Copper metal at 13 cents, however,
carried little profits for the average
producer. SO 1t Is not yet reasonable
to try to measure the probable effect
ON Copper company earnings Of six
months period Of limited consumption
and to consider the interval before
metal prices can be returned to level
where present dividends may be fully
covered.
Resistance Point In Commodities.
In the iron and steel trade q slow
sag in the volume Of production from
the high figure of last Winter Is taking
place; also further price concessions.
The best opinion however is that an
improvement Is pending. The same
feeling exists toward other commodities
that have been steadily marked down
and have contributed to the present low
index, now nearly eight points lower
than IL months ago.
Various commodities that have been
conSpicuously weak for q long time
are reaching q point Of resistance. The
advance In the price Of copper was
not only good strategy, 20 far as the
metal market was concerned, but 1t
made consumers of other raw products
consider the ACCESSIBILITY Of building up
their supplies while they had the mar
ket with them.
Car loadings of the railroads have
also suggested that business Is on the
mend. Figures for the first week Of
May showed q decided increase over
those in April and were the largest for
any week this year. They were, how
ever, 10 per cent under the total for
the same period in 1929; even less than
those in 1928.
Roads Maintain Dividends.
For those who may be alarmed over
the decline in railroad earnings and
have been recommending the substi-
tuition of public utility or industrial
stocks for railroad shares, 1t might be
well to look back over the records OF
dividends declared on the stocks Of
majority of the leading carriers during
such really trying times as 1908 and
the period directly following the re-
turn. of the carrier to private owner
ship In 1920 with the almost immediate
sequal of the severest strike within the
memory of this generation.
Many roads have gone through the
entire period Of nearly q quarter OF .
century with an uninterrupted dividend
record. OF the few that were compelled
to reduce their rates, q majority have
subsequently advanced them to higher
level than the original.
There has been much pressure on
railroad arrangements to distribute .
larger portion Of their earnings among
share holders out OF the abnormal
profits Of the last two years. For
tunately these profits were either put
In reserve or have been used to
strengthen the physical features Of the
property. In spite of . poor six
months, railroad credit, as indicated in