Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-31
TRADERS PLEASED
At FALL PROSPECT
Stability of Market During
Past Week Based on
Business Gains.
BY CHARLES w. STORM.

BY CHARLES w. STORM.
Editor the News Service Of Wall Street
Special Dispatch to The Star
NEW YORK. August 31.-Develop-
ments during the last week have been
OF much encouragement to the financial
district, and this better feeling began
to find reflection in stronger stock
market on Friday. The fact that the
gains made that day were maintained
and in most instances enlarged on Sat-
urday led to the belief that the new
upward movement represents something
more than technical rally based on
short covering by professional traders.
A continuation of the upward move
ment would be considered significant
and would encourage the belief that
real banking support has been respon-
slole Tor the recent stability of stock
prices.
Constructive DEVELOPMENTS.
Evidence of progress in the direction
OF sterilization of the financial and
business situations Is coming to hand in
more impressive manner. The prompt
ana decisive action taken with regard
alton Ia source Of much announcement
Inc street is OF the opinion that the
granting of $400 900 900 of one-year
credits by American and French bank
ers will result in improvement in the
British financial situation and thereby
remove that as depressing influence
on the stock market
With the German and English f1nan-
cial necessities provided for, the news
from Europe in the future is expected
to be Of a more favorable nature,
Business Improvement.
While unfavorable conditions prevail
in general industry and trade through
out the country, the fact that expansion
has started in the New England States
leads to the hope that it will extend to
other parts Of the Nation. just as little
or no attention was paid to the be-
ginning Of the business depression in
1929, SO very little cognizance is now
being taken of the betterment in New
England, and, in fact, most people are
bellttling it,
financial conditions in Germany and
Great Britain came at an inopportune
time from the viewpoint Of those who
nave assumed a constructive position in
the stock market. These European
troubles have delayed business improve
ment in this country so that seasonal
betterment is not expected to develop
as early as usual.
Hopes are running high, however,
owing to the favorable indications re-
ceived from the New England States.
The Alexander Hamilton Institute is
authority for the statement that IA in
dustrjes have emerged from the bottom
OF the depression and. in spite of a
general lowering of wage rates, are
pouring increasingly larger wage totals
into the pockets of workers.
Aid for Bonds.
Another source of encouragement TO
the financial district is the steps being
taken by the leading investment bank
ing houses to improve the market for
second-grade bonds. The steady de-
cline in prices of these bonds has been
one depressing influence on the stock
market 1t is known that prominent
investment bankers have been seriously
discussing ways and means for taking
those second-grade railroad bonds off
the hands of out-of-town bankers and
rediStributing them to investors where
they will stay put.
The removal of these bonds from the
portfolios of the banking institutions
would be of substantial benefit to the
banks and would at the same time re-
spot in the nations banks.
Discussions with regard to helping
the market for second grade railroad
bonds have reached the point where it
is expected that a syndicate will be
organized to purchase large blocks OF
these bonds from time to time The
investment bankers will then inaugu-
rate selling campaigns throughout the
country with view to placing the
securities with investors.
improvement the Latter part OF the
week in the prices of these bonds un-
doubtedly grew out of demand stimuli
lated by the knowledge of what is go
ing on in investment banking circles.
Further improvement in the prices of
second grade railroad bonds undoubt-
eddy would serve to revive confidence in
the transportation stocks. The latter.
however, continue to labor under the
influence of possible reductions in
number of dividends. 1t is because OF
this apprehension that the dividend
meetings of a number of the big rail-
roads will be anXiously awaited
The continued poor showing Of earn
ingS and the improbability that the
railroads will receive any relief from
the Interstate Commerce Commission
until the late Fall would seem to indi-
cate that the boards Of directors Of the
railroads will have to use earnings as
the sole yardstick with which to meas
ure out dividends to shareholders.
Betterment in Oils.
There is no doubt in the financial
district that conditions have been i'm
proving in the oil industry as result
of the shutting down of flush produc-
ton in East Texas and Oklahoma. Oil
stocks showed some increased activity
and strength by reason of the general
advance in prices of crude and gaso-
line, but the upward movement in the
oil group was slowed down by the ina
bility of the general stock market to
get anywhere during the early part Of
the week.
A resumption of the advance in the
oils, however, is expected to be wit
messed when the Texas Railroad Com
mission and the State of Oklahoma an
nounce the allowable production fig
ures. These figures are expected to be
bulliSh on the industry and are ex-
pected to furnish the signal for the
revival of activity and strength in oil
stocks
(Copyright. 1881. by the North American
Newspaper Alliance, 1nc.)