Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-08
Remarkable Upturns in
Wheat and Silver Attract
Interest of Traders.
BOND LIST Benefited
BY IMPROVED PROSPECT
Money Stringency Disappears and
United States Gold Stocks Show
Notable Increase.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

AioNuIAeo nave uclu Vic CeaIcl VI Viz
stage this week; securities. especially
stocks have been in the background.
For the first time in two years there
has been a definite and apparently le-
Ultimate upward trend in those values
that are fundamental to healthy con-
dition of business in this country, and
which play a prominent part in de-
termining commercial and banking
sentiment abroad. For instance, the
remarkable rise in foreign dollar bonds,
which in some issues represents a re-
covery of rs to 100 per cent from the
low figures of the last month, IS in
timately associated with the advc ice in
wheat and silver, for as these co.. modl-
ties once more approach the production
cost level the problems connected with
both internal and external debts OF
South American grain-growing ana
silver mining republics are lessened.
The rise in wheat developed from
the fact that this staple month ago
was selling at the lowest price on rec
ord. duplicating the situation then ex-
isting in many corporation stocks that
were also lower than they had been
within tthe memory of man. In both
cases the irreducible minimum OF value
had been reached The inevitable re-
bound took place simultaneously. With
wheat the So-called technical s1tua-
ton" was favorable, rather more so
than with stocks, for visible supplies
were decreasing, negotiations were go
ing forward covering the purchase OF
grain by foreign countries and the oIt-
look here and abroad indicated a re-
duction in acreage as well as ylelo Ior
the oncoming crops.
Farm Outlook Brightens.
If it had been a presidential year one
might have suspected that political
leverage was being created through the
appreciation of nearly so per cent in
wheat in the month prior to election
day. There is no doubt that this
change, represented in a half billion
dollars of added money value to the
wheat unsold, has already effected
decided uplift in sentiment in the ag-
ricultural districts. 1t lightens up the
business skies in the Central West and
the Southwest and helps to relieve the
darkness that still envelops the indus
trial East.
The situation in silver is rather diff
ferent from that in wheat. Its decline
had also gone so far that existing rec
ords could not keep up with the steady
fall in price. 1t had dropped far
below the cost of production. In spite
of this. as in wheat, the output OF
the demand for it and to the supplies
on hand. There is both political and
an economic relation to the rise in
silver. 1t has an international. as well
as a national aspect. In the minds OF
many gold, as the absolute sovereign
in the monetary system, has been per-
manently dethroned. The abandon
ment of the gold standard by England
and the Scandinavian countries. along
with the situation in South America
and the delicate position of Germany,
has brought cleavage in the ranks
of economists that is likely to find
expression in strong arguments for in
ternational bimetallism. 1t may sur
prise many to know that In the Re-
publican platform of 1896 there ap-
peaied the following:
I'VE are unalterably opposed to every
measure calculated to debase our cur
rency or impair the credit of our
country. We are. therefore, opposed
to the free coinage of silver except by
international agreement with the lead
ing commercial nations of the world,
and until such agreement can be OBJ
tanned the existing gold standard must
be preserved"
Buying Power Enhanced.
1t has been admitted for nearly two
years that part of the world depres-
sion is due to the reduced purchasing
power Of those countries in which silver
Is the monetary unit and that their
commercial vitality has steadily been
declining as the price of the white metal
fell month by month. In all, therefore,
a tonic has been administered to the
enervated business world as the prices
OF wheat and silver have risen, while
additional recuperation has set in those
localities where the market value OF
crude oil has approached nearer to the
production cost than it has been since
the early part of 1880. Commercial
reports from the South lately have been
decidedly optimistic, contrasting sharply
with those of year ago.
So far there has not been much effect
OF these few pronounced commodity ad-
vanceS on the general wholesale list.
When the downward momentum has
continued so long and with such
strength, it will take some time for the
tide to change. This is truer of retail
than of wholesale prices. In the former
we have evidence again this week that
the swing is stin to the advantage of
the consumer. Bradstreets figures today
show that in the past week the retail
food index has declined nearly ~ per
cent from the week previous. During a
have been enjoying a spectacular rise,
there has occurred decline of 90 per
cent in retail food quotations. This
permits of the trading argument be-
tween employer and employee that a
reduction OF moderate size in wages is
amply compensated for by the lower
cost of living. There have already been
pronounced reductions in food prices
and IN those OF wearing apparel.
The next readjustment, and the one
that will complete the trinity of adj
vantageS afforded the wage Garner or
the person with moderate competence,
Is to come through a reduction in rents.
Quite naturally throughout the country
these have been held at a level which
expresses the earning power on property
valus in 1928 and 1929; not those of
today. The owners of apartment houses
and Office buildings in metropolitan CEN
tcrs have adopted the same business
philosophy as the unionized worker who
prefers to remain idle rather than to
make the slightest concession from the
union scale. This stubbornness on the
part of the landlord Is leading to an
increasing number of foreclosures and
receiverShipS and the consequent distress
of a considerable body Of bondholders.
An easement in conditions where
there has been acute strain appeared
this week. 1t has been visible in the
money market. Time loans and ac-
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