Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-23
PROSPECT OF CROP
BETTERMENT AIDS
BUSINESS IN SOUTH
Rainfall More important to
Farmers Than Drops in
Money Rates.
DEFLATI0N EVIDENT
IN SOUTH AND WEST
Texas and Arizona Declared on
Eve Of Industrial
Revival.
BY CHARLES F. sPEARE.

LOS ANGELES, Calf, March a.
What most impressed Wall Street and
the other financial centers of the East
this week was the drop in domestic
money rates and the decline in the
rediscount rate of the Bank of Eng
land. To the Southwest and lower
California, however, the fact of great
est consequence to their business life
was a rainfall of from 2 to 31a inches
which extended over wide areas in
Texas, New Mexico, Arizona and in
this State, supplying much-needed
moisture at the season of the year when
1t will do the most good.
So while the security markets have
been booming and averaging prices
making new thighs" under the favor of
an astonishingly easy credit situation
covering collateral loans and short-tilne
paper, sentiment in an important por-
ton of the United States has been
cheered by q better outlook for the
crops, especially in the Seni-arid sec
tons where water Is regarded as the
equivalent Of gold.
Real Estate DeflatiOn.
Treveling south and west through
the country one finds in most places
lingering evidences of defiation of local
situations, usually in real estate, or of
the effects of the stock market panic
Of last November. Together these have
produced rather serious conditions, out
of which cities and towns slowly are
working their way with signs of i'm
provement since the first of this month.
For instance, New Orleans has at pres
ent q degree Of unemployment that
presents q problem to the local govern
ment and business men, who are try
ing to correct 1t.
Conditions there are the result more
of local than of national disturbances.
including the prolonged street car
strike, overbuilding of homes and
apartments, and some indiscretion in
the banking world in the way of pro-
noting local securitieS-all of which
has affected confidence, so that mort
gage money is almost unobtainable
The New Orleans Stock Exchange Is
said to be the only one in the United
States that did not increase its turn
over in 1929
In Northern Texas, development at
too great speed for number of years
resulted in a state of stagnation, espe-
ctally in the building industry, long
before the break in stocks or the de-
cline in cotton occurred. AS one goes
from place to place, 1t is interesting to
find how commonly the market situa-
ton has been made the excuse for poor
collections, falling of in retail trade,
inability to borrow at the banks or of
loan associations, and failure to meet
Community Chest quotas. Undoubt-
eddy 1t has precipitated financial
troubles that might have been post
poned had there been no Wall Street
crash, but 1t has everywhere been q
convenient argument to use with Dor
rowers. and when there had been I'M
settlement of confidence because of
local weaknesses 1t was the final factor
that caused such banking trouble as at
Fort Worth and the investment COM
pany failures in San Antonio.
AS land as an investment plays a
much more important part than Sc
curities in this part of the world, the
deflation Of city real estate is Of in
flnitely greater hurt to communities
than the Shrinkage in stocks. Florida
Is held up as q State that went mad
on land values, but investigation will
prove that her example was followed
to considerable degDee by nearly every
metropolitan and suburban area from
the Atlantic to the Pacific. It Is as
difficult to move real estate in Los
Angeles today as it has been in Miami
since 1929. Here and there building
permits are showing gains over a year
ago and compared with January or
February.
Housing Facilities OverbuiIt.
Easier money in Wall Street is a
long time in thawing out the markets
that deal in mortgages rather than in
stocks and bonds, and while there is q
strong will in Washington to "sweeten"
the situation with low rediscount rates,
the dif1culty Is with overproduction of
housing facilities. This will take some
time to correct.
For over 20 years the writer has
made frequent visits to Texas to in
vestigate railroad and agricultural de-
velopment there. This has given a per-
spective of value In appraising present
conditions. In the earlier days there
was a great deal of railroad building
in progress, particularly by the Frisco
whose lines were projected into the
Rio Grande Valley, where now the Mis-
souri, Pacific and Southern Pacific con-
troll the traffic. Then came the break
up of nearly all Of the Southwestern
roads, and, after the reorganization of
IL and is years ago, q reapportionment
of weak independent lines to more logi-
cal sponsorship.
OF greatest importance was the de-
NCAOpLAICA1 VI y ACW physical SGdIlQdTQ
for the entire railroad group in this
territory. This Is the greatest change
one sees now in travelling over the
Texas roads. The second phase, and
the one that is now causing the most
discussion among railroad men, is the
fight for traffic, as physical conditions
and facilities have been equalized, and
the strategy employed in the contest.
This is evident as one studies the move
mentS of California, Arizona and New
Mexico products from the originating
territory on the Southern Pacific to
their destination at Mississippi River
points. Just how this will be affected
by the proposed transcontinental line
under Van Sweringen sponsorship re-
mains to be seen. If the Interstate
Commerce Commission believes what 1t
says in its official documents, 1t will
not permit a system Of such proper
tons. and II financial history Is a
on1fde gIleh an 1Incn-0rdinated and I'M