Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-23
STOCKS FOR WEEK
TENDED DOWNWARD
PesSimism of Investors Re-
Elected in New Lows
for Three Days.


NEW YORK, May 2S.-Stocks reject
ed the pessimism Of investors and pro-
fessional traders this week, declining to
new lows for the bear market on three
successive days.
On the bond side Of the trading floor
and in the over-the-counter dealings
United States Government securities
scared TO new highs, while other prime
investment issues reduced their yields,
but 1t was still difncult to stir up much
enthusiasm for good grades.
The Federal Reserve Bank OF New
York plugged away at its ultra-eaSy
money policy, making another reduction
in the bill buying rate. Members of
the New York Clearing House Associa-
ton cut the interest allowed on deposits,
and many commercial banks reduced
their savings account rates. The latter
move appears to be spreading rapidly
throughout the country; It Is o natural
consequence Of the cheap credit move
ment.
UnfavOrabIe Effect.
The decline by many stocks was vio-
lent; in general, the drop was suf1-
GENTLY large to have an unfavorable
poyCIlOlOBlCdA OIubcQ 0J<ALCS 0JcC1
and American Can both broke below
500 a share on Monday. American
Telephone was heavily lQuidated, losing
nearly 8 points in one session. Yields
on the best grade stocks increased sub
stantially the spread between their per-
centageS and the return on the highest
rated bonds, but investment buying was
Of a cautious nature and most Of the
markets support came from covering.
Shorts who wanted to withdraw could
do so without much effect on the price
level.
Rail stocks, which have long been
the leaders Of the decline, rallied
Thursday when the Eastern executives
came to their agreement on q proposal
for higher freight rates and pulled up
other groups so that the market had
its first net gain in q fortnight The
security with which the shorts APP
parent1y regard their position, how
ever, was illustrated by the hstlessne6s
Of yesterdays trading when the adj
vance was extended only haf-heartedly.
Weakness Of commodity prices is add
ing to the perplextties and problems Of
the current depression phase. The steel
industry's troubles in this respect were
emphasized at Fridays meeting Of the
executives, when the dif11culty of earn
the basis Of the present price scale re-
ceived mention.
Autos Near Peak.
The Department Of Labor's compre-
hensive commodity index, embracing
$50 items, declined " per cent in April,
or back to a 1915 basis. One of the
weakest staples was copper, which
dropped to SA cents, considerably
under the production cost Of many COM
panies.
Automobile output seems to be max
ing its seasonal peak this month. The
steel reviews said demand from this
source was already tapering OF, al
though they believed the decline would
be just as gradual as the recession IN
steel manufacture.
The prospective request for higher
freight rates on railroads east Of the
Mississippi represents the 1irst co-opera-
tive action the carriers have taken in
several years TO improve earnings. No
situation has caused more concern than
the plight of the roads, for the invest
ment in their securities Is enormous.
aRtlroad bonds are largely owned by
the country's savings banks and life in
surance companies, so that the main
tenance of their credit is regarded as
fundamental.