Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-02
MARKETS REFLECT
TRADE OPTIMISM
Favorable Aspects Of BuSi-
ness Situation Emphasized
In Traders Policy.
BY CHARLES ". STORM.

Editor the News sergies Of wan Street.
Special dispatch 10 The star.
NEW YORK. November 2-IntenEi-
fed national effort Is beginning to have
a marked influence for the better on the
stock market Traders have been en-
deavoring 10 reflect this physiological
improvement. but are again meeting
with difficulties in the shape Of selling
growing out Of the "whispering cam
paign.' which Is once more under way
as part Of a new beaFIsh movement.
Those who had stocks but had 10 sell
are believed 10 have been "bailed out
in the course Of the recent bear CAM
paign Weak stockholders are believed
10 have disappeared practically and this
seems to be registered In the brokers
loan figures which are again down TO
new low records. Dealings in the stock
market have reached a cash basis. Spec
ulation on margin has proved costly
in the last two years so that those
optimists who still have a shred of
confidence In the ability Of he country
TO come back are buying what they
can on hand-to-mouth basis and pay
ing for &C. This Is shown In the rec
ord breaking number OF shareholders
reported by the big corporations from
time 10 time.
Inevitable Triangle.
Price irregularity In the market at
this time il due TO three influences, two
OF which are operating against the
other one and give the market show
Of strength The two favorable infiu-
ences are the probability Of the rail-
roads inducing their employees TO take
a 10 per cent reduction in wages for a
year and tho gratifying advance in the
price Of wheat which touched new high
prices for this movement last week apd
represented an appreciation OF more
than 25 per cent from the recent low
levels. This appreciation when viewed
from the purchasing power Of the
farming community should be regarded
as significant.
The movement locking toward a re-
duction in the wages OF railroad en-
ployes is gathering momentum. The
absence OF bitter opposition On the part
of the railway employees Is gradually
molding public sentiment to the point
where the railroad unions are expected
to accept the inevitable.
The Importance of 10 per cent
wage reduction to the railroads even II
only for a year, may be gathered from
the fact that the railroads paid out In
wages in 1890 total Of $3.50, 544,2T7
Ten per cent OF this would be approx
mateiy $255 600 900, which Is equal to
at least half the bonded interest OF all
the common carriers.
Authorities have estimated that the
recent small increase in freight rates
offered conditionally by the Interstate
Commerce Commission, would expand
the revenues of the transportation COM
panies from 100000 900 to $i25,000,-
600 If the railroad employees volun-
tarily agree to take a reduction IN
wages the total savings from this source
and the increased revenue of the latest
rate advances would enrich the rail.
roads by 300,000,000 to $375,000,0 0C
and would materially enhance the
credit of the carriers and enable hold
ers OF bonds DESTROYS TO dispose of them
on an advancing market instead of on
q declining one.
UnfavorabIe Influence.
The unfavorable influence lowering
over the market and the one which Is
to a great degree multiplying the effect
Of the other two is the German situa-
ton. Already apprehension is being
expressed as to the ability of the Ger
mans to take up even part of the short
term credits. which are held principally
In the United States and France. There
seems to be little question but what
will have to be extended. That would
also account for the efforts being made
both by politicians and bankers to bring
about reduction in reparation pay
ments and further reductions in inter-
national debts.
Improvement in the German phase OF
the international situation undoubtedly
would find quick and favorable express
sion in the stock market. The favorable
results at the English general elections
and the announcement that the Bank
of England is ready to pay 40 per cent
of the $3.50 10000 credit extended by
France and the United States toward
the sterilization OF the pound sterling
prior to the abandonment by Great
Britain of the gold standard would seem
TO indicate improvement in British
finances.
Confidence Returning.
There were also innumerable devel-
opments the last week denoting the
gradual return of confidence on the
part of the American public. These
have found reflection in a reduced
tendency by people to hoard money
There was also a substantial reduction
in business failures announced by the
trade reviews A marked shrinkage in
the number of bank closings also has
occurred and further betterment in this
direction is expected with the beginnine
Of operations shortly by the National
Credit Corporation.
(Copyright 1881 by the North American
Newspaper Alliance, Inc)