Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-22
STEEL INDUSTRY LEADS
IMPROVEMENT IN TRADE
New Treasury Financing May
Have influence on Immediate
Market Movements.
BY CHARLES F. sPEARE.

I
and estimates for the first quarter of
1881, smaller car loading figures. and
a further decline in some commodities
sufficient to bring the Wholesale index
to the lowest point in the current de-
preston.
Added to these factors is that of the
severe falling of in income tax pay
ments, with the consequent increase
in the Government deficit. This can
| only be met by another large issue Of
Treasury notes or certificates.
The stock market this week has been
| huoyant in spots and has broadened
out to include groups that had been
Indifferent to the manifestations of
manipulation in the public utility
sharss. One of the concrete evidences
Of industrial improvement was the adj
vance Of 81 a ton in structural steel
and the placing of one of the largest
orders in the history of the trade. This
offset the effect of the omission of the
common stock dividend of one Of the
| independent steel producers and is ex-
| pected to give some impulse to other
! departments Of steel industry than
| those recently active under the influence
Of automobile demand.
SHver's Rise Stimulating.
The further rise in the price Of sill
/ YER had a stimulating effect in all OF
| those markets here and abroad that are
! sensitive to fluctuations in the white
| metal. BY some the turn-about in sill
yer is regarded as a symptom Of sta
bilization in the general commodity
situation. This, however, Is being de-
! layed by the continued fall in farm
and food products. so that the COM
| modify index this week is sharply
lower and nearly 90 per cent under the
| figure of last March.
It has been a distressing period for
| the holders of stocks in many different
lines Of enterprise. The number of divi-
ldend reductions and omissions runs into
/ large figures. The passing Of the divi-
dend on Missouri, Kansas g. Texas
Railroad common stock emphasized the
| plight of the carriers in the South
west, whose margin of profit on their
capital stock. even in normal times, is
none too high in spite of the improve
| ment effected in their capital struc-
| lures In the reorganizations Of Is years
| ago. Approximately $50000,000 in rail-
road dividends and interest on adjust
rnent bonds has been cut of in the
| last six months. This figure will be
materially increased in the June quar-
| ter Of this year.
| Recently the dividends Of banks and
| trust companies in the New York dis
| trict, as well as in other parts of the
| country, have begun to show the effect
| Of low interest rates, smaller CONNER
cial loans and the depreciation in their
! investments Of securities and real es-
| tate. They have held out against the
! general trend but are now being COM
J pelled to make the same sort Of ad-
| justments that have become quite COM
mon among the industrial and railroad
corporations.
Deficit Exceeds Estimates.
A Government deficit is something
that the people Of the United States
have not had to deal with many times
! in recent history. although 1t is quite
| chronic with nations abroad. The seri-
| business of the present situation Is that
the deficit is running far in excess Of
the maximum estimates made when the
| soldiers compensation measure was
under discussion. That it will neceS-
state another huge offering of Govern
ment paper is obvious. 1t Is also now
| quite apparent that It has indefinitely
postponed any attempt to refund the
United States Liberty fourth 4Hs
! in 1888.
The success of this months loans is
| evidence that the public will buy Gov
eminent paper and pay a premium for
/ ".
| on the part of Secretary Mellon and his
advisers over their ability to sell suf-
| f1cient Treasury certificates to meet the
| deficit. What 1t does Is to extend the
| Government debt after a 12-year period
| Of steady reduction and handicap those
who had formulated the policy of re-
| funding liberal slice of the war loans
! at rates of interest which would have
brought substantial annual saving in
| debt service.
It is not clear why the Treasury
| officials could not have realized what
would happen when the March income
tax statements were submitted with
checks attached 1t has been obvious
| to any one who has investigated the
campaign among business men and in
| vestors to limit their 1881 income taxes
! by taking every possible loss that the
total available for the Government from
| these sources would be materially re-
sduced. It is understood that in the
second district in New York City, which
includes the Wall Street area, the re-
turns are off IS to 80 per cent from a
year ago. Many individuals who paid
| thousands Of dollars Of tax in 1880 are
| paying only nominal sums this year
Partnerships and industrial corporations
are contributing little. Earnings of rail-
| roads and banks have been such as to
reduce their tax commitments by a
substantial percentage.
On the other hand public utility
| corporations had satisfactory year In
1880. The increases in their taxes has
helped to Offset decreases elsewhere
One case is cited OF a power and light
holding company that paid $50 900 ,00C
last year and now shows profits that
will compel an income tax return this
year Of $4,000, 900. Altogether 1t looks
as though the original estimate of the
Government Of a falling of Of $780,
100000 in March quarter income TAI
returns was so per cent too low.
Foreign Trade Declines.
The foreign trade figures for Febru-
airy published this week ran about the
same as those since the. tariff bill went
into effect last Summer. Each time the
authors Of this bill rise TO remark thai
It has no effect on the country's trade
along some figures on imports and ex-
ports which strongly contradict such
statements. The outgoing values Of
merchandise in February were SIS pei
cent smaller than year ago and ths
lowest in nearly seven years, while i'm.
Continued on ssapnd Page.l