Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-01
RECORD STOCK GAIN
SCORED AS TRADING
VOLUME INCREASES
Continued From First page.)

is due primarily to orders from auto.
mobile trade, where March production
promises to show a decided gain ovel
recent months and over that Of last
year. The textile industry is main
had recovered when other industries
were crumbling. In spite Of the Lowest
construction costs in many years, the
building trade continues to suffer from
the overdevelopment Of residential and
business structures, and the number 81
mortgage foreclosures increases from
week to week Time money has beer
slightly firmer with the approach OF thu
Spring season. The abundance Of II
is evidenced by the fact that the aver.
age call loan rate was the lowest since
1908.
Attitude Toward Stocks.
That the public il still strongly
stock minded, in spite of its tragic ex.
periences in the markets of 1929 and
1880, is indicated in the extent to which
1t is now participating in the move
ments in equities 1t is not buying
bonds; it shows little interest in pre-
ferred stocks. However, the institution
al attitude toward common stocks mas
undergone O revision due to the enor-
nous shrinkages that occurred IN them
last year and which wiped out re-
serves set up for depreciation amount
ing to hundreds Of millions OF dollars.
one of the most significant announce
rnents made in some time appeared
this week in the report or the presi-
dent of the Sun Life Assurance Go, OF
Canada to his stockholders and policy
holders. In this he said:
Investments In we'll selected common
stocks of corporations OF long estab-
lished proflt-earning power supplying
some necessary commodity or service, II
bought at the right time, have but
one undesirable feature-their liability
to fluctuations in market value. Bonds
and preferred stocks are less open TO
this objection; fortunately this is a
favorable time for the purchase Of those
securities also and it is the intention
of your directors to take this oppoftu-
nifty to increase our holdings In these
other forms Of investment"
The market value of common stocks
of this company at the end OF 1880
was over $304 000, 900. At one time
last year 1t is understood there was q
reserve set up against depreciation
in the securities Of the company OF as
much as 500, 00O, 900. The practice Of
a former generation in its investments
was to hold about rs per cent Of bonds
and rs per cent of common stocks. The
present generation reversed this, and,
where considered conservative, held IS
per cent of bonds and preferred stocks
and rs per cent Of common stocks.
Nearly all of the newer investment
trusts and trading corporations showed
as much as 90 per cent In common
stocks and in call loans. What good
business Judgment demands In the way
of q proper ratio depends on condi-
tons when investments are made. There
are times to buy common stocks and
there are times to buy bonds and pre-
ferred stocks. But where an individual
or institution is dependent on income
and has to display balance sheet
they viii not 60 far wrong,
year in and year out, In holding secu-
rifles, half of which give them creditor
position and the other half of which
permit them to participate In the grow
ing equities Of sound public utility, rail-
road and industrial corporations. One
of the well-earned lessons of the last
two years Is the error of filling an In
vestment portfolio with too many Sc
curities Of the same kind.
(copyrisht. ls3l)