Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-19
END TO BOARDING
OF MONEY is SEEN
Hoover Credit Aid Plan Ex-
pected to Restore Public
Confidence.
BY CHARLES w. STORM.

Editor. The News Service of Wall Street
Special Dispatch to The Star.
NEW YORK, october 19-An i'm
portapt milestone to economic recovery
in the United States will be reached
when the National Credit Corporation,
the huge banking pool organized to re-
lieve the frozen loan situation in the
banks, goes into active operation this
week. The functions of this organize
ton are expected to find reflection in
the thaWlng-out process as applied to
frozen bank assets, which, in turn,
should minimize bank closings.
Important bankers and business men
hold that incubation of confidence in
place OF fear in the minds of the gen.
eral public will be equivalent to so per
cent Of the work necessary to rehabili-
tate the country. The revival of con-
hdence in the credit condition will stop
boarding Of money and divert such
funds into the channels of trade and
finance.
Will Strengthen Bonds
Extension of relief to banking insti-
tutions by the National Credit Cor
poration should find immediate effect
in the bond market. Banking institu-
tons needing funds in a hurry due TO
heavy Withdrawals of cash have been
forced to. sell bonds which possessed
quick STABILITY. Withdrawals have
been steady so that bond sales have
been continuous.
The banks will. now be able to obtain
assistance from the National Credit
Corporation, thus relieving the neces-
sity Of selling bonds. Lessened pressure
in this direction will undoubtedly i'm
part strength TO the general bond mar
1T T0kN IL <~f ~l-e.z IL L.
which the public has in recent months
been attempting to judge the probable
course of stock prices.
The beginning of operations by the
big banking pool will also have tend
ency to dry up the selling Of United
States Government bonds which has
come largely from banking institutions
in all parts OF the country needing
ready funds. The action of the Treas
ury Department in deciding to permit
the National Credit Corporations notes
TO be used as collateral for Federal de-
posts also goes a long way toward en-
larging the supply of money which will
be put into the money market for the
relief of the banking situation.
Domestic Improvement.
The psychological effect of the Hoo
yer proposals is being reflected by i'm
provement in domestic business No
tationS of betterment are scattered. but
they are in increased number. Some
expansion in the demand for steel is re-
ported and one of the good sized COM
panies reports that new business re-
ceived the last week was the greatest
for any similar period in its history.
1t is significant that an important
executive in the steel industry, whose
opinion on both business and financial
conditions is widely sought, has been
buying United States Steel common
stock, convinced that the steel industry
will show Improvement which should
reach substantial proportions next year.
This executive is said to be replacing
stocks which he sold at substantially
higher prices months ago.
The recent appearance of large buy.
ers Of stocks furnishes the basis for
the supposition that the stock market
is now in an accumulative stage.
LavaPs Visit.
The arrival of Premier Laval of
France is expected to clear up some un-
favorable rumors current in recent
weeks relative to the attitude of France
toward the United States as the worlds
banker. There IS much guessing as to
the real purpose of Premier Lavals
visit. The Street is hopeful that the
proposed conferences of the French
"a 4HtOA "tt44 CoIuS44l 11OOHeI Will re-
suit in Qualification of the economic
atmosphere with regard to reparation
payments and foreign debt concella-
lions.
Railroad Rate Case.
Another important factor having a
dominating influence on the price trend
Of stocks is the freight-rate case Ad-
vance i'll freight rates should have a
most favorable psychological effect on
the stock market even if the advance
proves to be less than looked for.
All in all, there is a noticeable i'm
provement in sentiment and many
pessimiStS have been converted to the
constructive side by reason of recent
economic developments and the ex-
pectation Of their continuance.
(Copyright. 1881. by the North American
Newspaper Alliance, Inc)