Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-25
Everybody's
Business
Bankers Ask Hoover's Aid
IN Placing Ban on Short
Selling Decentralization
Of Markets Feared as Re-
suit of Raids.
BY DIR. MAX wINKLER.
special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, September 25.-
Prompted by the belief that the pro-
nounced break in prices toward the end
of yesterdays trading was due in
large measure to short-selling, group
of prominent New York bankers tele-
graphed President Hoover to suggest to
the country's securities and commodi-
ties exchanges that selling for short ac-
count be prohibited.
These bankers also urged the Presi-
dent to suggest that the various eX-
changes call upon their members to
clean up their short positions.
These recommendations are made
with view to preventing the markets
from becoming thoroughly demoralized
as result of vicious rafding such as
was in evidence on the New York Ex-
change yesterday afternoon.
Reserve System Strong.
Whenever pessimism is the order of
the day. constructive developments are
generally ignored To close students of
finance. one of the most encouraging
features in the present situation is the
inherently strong position OF member
banks of the Federal Reserve System.
Their reserve balances, amounting at
present to about $780, 100000 in excess
of requirements, indicate that they
have succeeded in getting completely
out of debt, situation which is IN
sharp contrast to the conditions OBJ
tanning in 1929, when many of the
member banks were borrowers on
rather large scale at the Reserve
banks.
Inasmuch as fundamentally strong
financial situation is prerequisite to
revival of business, the above f1gures are
gratifying, and even though many ad-
justments still remain to be carried out,
a somewhat more optimistic attitude
would appear justified.
The advance in securities prices on
Wednesday was perhaps DIT too spec
tacular, and a rather marked reaction
was, to some extent. not unexpected. The
recession was doubtless helped by
series of dividend omissions and reduc-
tions, but especially because of the re-
newal of short selling, made possible by
the Stock Exchange ruling resembling
an earlier decree which prohibited such
operations. In this way most of the
gains registered on the preceding day
were wiped out, and IN some instances
new low levels were recorded.
In the case of rise in prices, we
should not permit momentary enthu-
siasm to get the better of us; nor should
we encourage promiscuouS purchases on
the theory that uniform upward move
ment is in the making. Nonetheless, it
is significant to note the ease with
which certain issues advance as soon
as demand develops for them, and it is
for this reason that a rally, whenever 1t
occurs, assumes an almost sensational
character, even though, for more than
one reason, an orderly rise would be
more conducive to confidence.
Johns ManvilIe.
Despite depressed conditions, Johns
Manville will maintain the SO dividend
on the common stock, according to II.
Edward Manville, chairman OF the Ex-
ecutive Committee of the corporation.
Mr. Manville views with optimism the
movement to reduce the present scale
of wages, regarding it as necessary
step forward. THE sooner this is &C
complished" continues Mr.. Manville,
the sooner industry in general will be
in position to overcome the present
depression and increase wages again"
Sales Reports.
Sales of Chevrolet cars have been
good and the results to date are salts
factory, according to William S. Knud-
son, president of the Chevrolet Motor
w. 01FlSlOll VI GcAiCAaA NAOOOlos 1AS
finds business Still depressed and does
not, of course, expect a banner year,
hut, considering conditions in general,
he believes there are grounds for sat-
isfaction as regards his companyS &C
tivities.
Sales during the past two and one
half months by American Ice were
larger than during any similar period,
according to A. c. Small, president He
ascribes the reduction in common divi-
dend to the desire on the part Of the
company to improve its cash position
and provide funds for the extension Of
its business, on which last year $4,--
COO 900 was spent, financed through
current earnings and bank loans. OF
the latter, amounting originally to So
500, 900, all but 100000 will have been
repaid by the end of this month.
Mr.. Small estimates net profits on the
common at So share for the current