Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-10
u. S. CORPORATIONS
ARE ON FIRM BASIS
Reports Show Many Have
Large Cash Resources
for Investment.
BY J. C. ROYLE.

Corporations of America again have
spare cash for investment. This has
been shown in the current week during
the slump in stock market prices.
Federal Reserve Board members have
noted this trend, which is direct re-
versal of the move when the stock
market drop first developed last October.
Then brokers' loans were showed over on
the Reserve Banks. That is, the brok-
ers, instead of paying what they owed
the banks and taking the securities.
turned over the securities to the banks
and let the latter carry them. Now the
brokers. instead of relinuuishing the
securities, are financing their loans from
non-banking lenders.
Fear Speculative Flare-Up.
The only thing the Government fin
anciers are worried about is that the
volume of money available for call loans
will rise to point where another period
of speculative frenzy will ensue. They
feel now, however, that industry is
pretty we'll stabilized with brighter
prospects ahead. They also feel that If
the spectators would just let the pub
lie have chance to pay for the stocks
it has bought, the whole situation might
be ironed out quickly At the moment,
the additional calls for margins have
disrupted IflaJ program.
The basic industries, however are
gaining more stable footing each
week. Steel is not at its high point.
Neither is it at the low, and fiuctua-
tons such as usually come during the
Summer are expected to be smaller
than usual. Prices have receded for
some products, but this has stimulated
the placing of orders. The automobile
industry is holding production well
within the limits of demand and has
gotten rid of many of its minor all
ments. The fact must not be overlooked,
however, that motor car output is about
6623 per cent of what it was year ago
and that markets for raw materials used
by auto manufacturers have narrowed
correspondingly.
Building construction is picking up,
but it Is not as yet producing the VOL
une of employment hoped for. Master
craftsmen in many of the building
trades are willing to work as helpers,
at helpers wages, rather than stand
idle.
The move to the harvest fields is on.
The sheep shearerS are working gradu-
ally northward and farm employment Is
growing steadily. Prices are not high
for many farm products, but the care
full farmer finds compensation in the
fact that the articles he is forced to
buy also are selling at lower prices
than year ago.
Retail Trade Normal.
Retail trade is normal and whole
sale movements are up to expectations
The garment industry has reflected the
demand for Summer clothing and for
sport clothing, and textile mills and
shoe factories have shown an improved
condition in consequence, although their
position still leaves much to be desired
Oil production has risen again and
gasoline prices are rejecting the severe
competition that exists in retail mar
kets. The long range view of the Pc
troleum industry, however, is very
bright Action of Congress on the
sugar tariff schedules has brought
little comfort to that harassed industry,
in which domestic and foreign pro-
ducers and refiners are staging battle
royal.
Copyright, 193o)