Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-20
TRADE GAINS LAID
/. TO VETERAN LOANS
General Increase in Retail
Buying Follows Govern
ment Payment.
BY BRADLEY w. TRENT.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, March 20.-First def
mite reports have been received here of
the effect on business Of the flow of
millions of dollars from the Treasury
at Washington to applicants for loans
on veterans adjusted service certifi-
Gates. From well informed sources in
the financial district it was learned
that the Department of Commerce has
received advices that in all sections of
the country there has appeared an UNI
usually large buying wave in the retail
field.
Economists of financial houses here
have been watching closely for indi-
cations of trade stimulation from the
payments to veterans, which to date
have amounted to $104 035, 366 on 282,-
874 applications. 1t is estimated that
the Treasury will be called on to pay
about $500, 100000 additional in loans
to veterans between now and April IL.
Buying Laid to Loans.
There is no question, according to
these economists, that the increased
buying reported to the Department of
Commerce is due largely to the loans
to veterans, who are taking advantage
chandise. They also point out that, in
view of low inventories on dealers
shelves, this spirited purchasing move
will extend to wholesale and eventually
to manufacturing fields.
One brokerage houses Washington
representative advised that lin high
places in the Capital it is said that this
buying move signalized the end of the
! depression and would tend to inspire
greater courage for the immediate
future"
Norman Merriman, economist for a
prominent investment house here, de-
clared today that the funds now being
paid out by the Treasury constitute one
of the most spectacular additions to the
purchasing power of large group of
American citizens that has ever been
released in so short a period of time.
The sum which the veterans are Dor
rowing is a good deal larger than had
been expected in financial circles, he
said.
Effect on Stocks.
''This naturally means that the Gov
eminent will be called on to do a
greater amount of financing than had
been anticipated by most persons, which
may cause a slight softening in the
market for Government bonds" Mr.
Merriman said. However, We think the
long-term effect on the stock market
will be of quite different character.
since the release of this huge sum of
money should mean an early and i'm
portant improvement in retail trade
throughout nearly all of the United
States and consequent increase in the
total of employment as we'll as a stimu-
lation of business activity in general"
The decline in retail prices during
the last few months is another factor
tending to increase purchasing power.
The cost of living for the country as a
whole declined 10 per cent between Oc-
tober, 1929, and January, 1881, accord
ing to the latest figures of the National
Industrial Conference Board. Persons
whose income has remained stable dur
ing the depression period have therefore
had gain in purchasing power, while
those whose money income declined
have at least had an approximate 10
per cent offset to this decline.
Copyright, 1919