Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-11
Special Dispatch to The Star,

NEW YORK, July II. - Strongly
gratified by the success CT the Presi-
dents proposals for war debt holiday,
the general body of investors and
traders are now waiting, with interest
and expectation, the probable outcome
of further plans for rehabilitation OF
foreign, and particularly of German,
conditions, says the current review of
Henry Clews g. Co. The postponement
of the debt payments has laid the
foundation for pronounced progress
toward a better condition CT things.
That this better state of affairs will
have to be the product of continued
effort is now generally recognized. and
naturally renders the market sensitive
and temperamental. Notwithstanding
temporary setbacks, abundance of buy
ing power. however, is present, end
awaits only definite assurance of good
prospects to be applied. AS soon as
late Summer reports afford positive
evidence of strengthening Of trade,
much better market conditions may be
anticipated. There may. and probably
will, be good deal CT the usual Sum-
mer dizziness during this month and
August, and some of the earnings re-
ports for the first half year will be
anything but inspiring reading. but 1t
must be remembered that they will re-
late to conditions that are past. The
prospects for the second half Of 1881
hold out far greater assurance of prog
ress than has been offered since the
collapse Of 1929. There would seem to
be little reason to expect further seri-
Gus decline of values.
Constructive News.
There is every reason for believing
that really constructive market news is
close at hand in large volume. An
nouncement that very substantial prog
reSS has been made this week in the
further development of the plans fer
merger of Eastern railroads on the
four-party project. representing the
mileage between New York and Chi
cago. brings nearer the completion of
scheme which will render possible
large economies in operation. and should
go far toward improving the market
status OF all carriers affected by it. The
attainment of final understanding is
thought likely as a feature of this
month. and should exert strong in
f1uence upon prices. Coupled with the
assurance. new practically afforded,
that relief of some extent will be af-
forded to the railroads in general
through the readjustment of rates, for
which hearings have been set on July
Is. this agreement may be the turning
point in the general railway investment
position. General approval of the idea
of mere liberal rate treatment of rail-
roads has been expressed by pubic
bodies in all parts of the country. and
the result should be to hasten the 6eci-
sion and to render it the mere I'M
qualified. There is every reason to
believe that President Hoover will lay
before Congress an extensive program
of business reconstruction. beginning
with the war debt holiday plan. and
continuing with probable railway policies
and oil conservation projects. as veil IS
others designed to smooth out the rough
spots in general business.
Trade Position Shows Stability.
In spite of usual seasonal quiet. the
trade position is unquestionably showing
satisfs Glory degree of stability In
articles manufactured for direct con-
sumption there has been a gratifying
upturn. This is true. for instance, of
the shoe business, where the price Of
hides has risen sharply in response
to marked increase of demand by man
ufacturers. some of whom are now
operating at full capacity with sub
stantial volume of orders ahead. In
the New England district, as we'll as in
some Of the more important milling re-
gions of the South. the textile situa-
ton has definitely improved. Good
buying is reported by chain store sys-
TENS and by mail order houses and
there is abundant indication of SUBJ
stantial consumer demand. Steel re-
mains relatively inactive. and it is quite
probable that the usual tenth of the
month report by United States Steel
will show a moderate decrease in I'M
filled orders This development, If
realized, will be merely a continuation
of the dizziness which prevailed dur
ing the late Spring. attributable largely
to decline of railway orders, which.
however, may be counted upon to re-
wives sharply as soon as there is assur-
ance of early change for the better in
rates Allowing for seasonal adjust
ments. the steel position will probably
not prove less satisfactory than at the
last monthly report. Labor relation
ships, involving establishments of wages
here and there, are proceeding. with
little indication of any serious conflict
or difference of opinion. There is a
general recognition that reconciliation
of wage levels with prices will be found
an essential of complete business resto-
ration upon a sound basis. The, process
of bringing about this adjustment nee
essarily requires some time, especially |
in those lines, such as copper produc- |
ton, where the dispose! of large
stock on hand is a prerequisite to full
reformation of conditions that had led
to depression of prices.
The German Situation.
Such reaction as the market has !
suffered since the completion of the
plan for a war debt holiday
has been due to a belated realization of
the seriousness of the situation in Ger
many Had such a situation not existed, |
the plan, in fact, would not have been
needful, but the facts of the case were
not widely recognized in the
United States. The steps for correc-
ton of these conditions, already an
include the creation of great |
guaranty fund of 500,000,000 marks In
which the principal firms and houses
in Germany are uniting for the purpose
of assuring the safety of foreign COM
mercial loans to German concerns. This, |
together with the probable extension of
the large credit already established by
central banks for the upholding of the
gold position of the Reichsbank, will go
far toward turning the tide which has
been setting against Germany in The
matter of foreign exchange and should
do much to restore normal conditions