The Washington times., 1930-05-24
BRITAIN BANK
To AID ITS
RATE
Stocks Have Sustained Ad-
vance While Shorts Hunt
Cover; Session Described


q week, we experienced yesterday
o sustained advance in the mar
ket. The opening was higher,
and the early strength was main
tained through to the close. Vol
ume of trading increased suo-
Stantially. but despite that the
turnover gave no one any reason
to consider the market really
active.
It was agreed in most well-in-
formed quarterS that the stock
list was thoroughly sold out.
Shorts got into plenty of trouble
in covering the commitments they
had made during the last few
weeks. 1t was difficult to borrow
leading stocks, and many a short
seller was sorry yesterday that he
did not cover a couple Of days
ago.
The most encouraging factor
In the session was the strength
of stocks like U. S. Steel common,
American Can, General Electric,
Westinghouse, General Motors
and Radio.
Improvement in commodity
markets was another bullish in
fluence. Continued ease of call
money gave promise of gradual
improvement in business which
must eventually be reflected in
betterment of prices on leading
stock exchanges.
Bullish Forecast
From sources close to the most
important bankers, I hear that
the stage is all set for a reduc-
tion of the British bank rate next
Thursday morning. According to
my informant, the cut will be
followed Immediately by reduc-
ton in the New York rediscount
rate, which would indicate further
easiness in call money rates here.
The effect of such eaSineSS in
credit conditions ~ould be to
stimulate business expansion, en-
courage buying of commodities,
revive building activity and eventu-
ally stimulate speculative activity
on the Stock Exchange. AsSum-
ing that the British bank will re-
duce its rate and that the Fed
eral Reserve Bank here will fol
low suit, leading financial in
terestS are predicting that the
market will begin to show out
standing improvement a week
from Monday.
American Telephone and Tele-
graph probably will continue to
show improvement as a result Of
the expiration Of rights.
Worthington Pump
It was reported that Worthing-
ton pump was about to receive
an important and highly lucra-
tive contract from Cities Service.
Such a deal would result in
sharp increase in income for
Worthington Pump, for Cities
Service is planning important
expansion and will require enorm.
Gus quantities of pipe during the
. balance of this year.
I think there is a speculative
play in Dayton Airplane Engine,
o stock listed on the curb. It's
high for the year is 81s, and the
low is 3. 1t closed yesterday at
ST share. It should make a
new high next week.
American Telephone
Many a trader seeks an invest
ment stock with speculative pos
sibilitieS. American Telephone
and Telegraph answers to this de-
scription today, now that the
rights have expired. Conversions
of bonds into common stocks will
be stopped and pressure on the
stock will be lifted. No one who
buys ATT" at current levels
will be sorry for holding it over
a three-months period.
The German reparationS bond
Issue probably will be offered in
America during the next month.
Whether the issue is well received
may have an important influence
on American securities markets.
New high for American Tobacco
B called attention again to the
OL LOOdLSO
shares. 1t is reported that net
profits of American Tobacco for
this year may approximate $40 a
share. There is little doubt that
the stock will be split, and that
the dividend basis on the new
shares will materially exceed the
current So rate. The enormous
gain in sales Of Lucky Strike ciga-
rettes is chiefly responsible for
the company's improved position.
Leading automobile companies
have reduced inventories to a
large extent. and are in position
to turn the corner as soon as pro-
duction shows improvement. Used
Car situation is improved, also.
Tariff problems will be obviated
somewhat by the foreign branches
Of important manufacturing COM
panieS.
Chrysler
From sources close to the man
agement, 1 hear that Chryslers
sales and profits have been ex-
panding materially in the cur
rent quarter. Undoubtedly this