Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-20
MARKET BELIEVED
in STRONG POSITION.
Recent Selling Declared to
Have Placed List on
4 Firmer Ground.
BY CHARLES w. STORM.

Editor, the News Service Of Wall Street.
Special Dispatch 10 The star.
NEV YORK, July 20.-With the be-
ginning Of the new week the attention
Of Wall Street will be focused upon de-
velopmentS at the London Conference.
The Street IS hopeful, the belief pre-
vailing that the German government
VIII accede to the demands of the
French in such a dignified and diplo-
matte manner that the edge will be
taken on the surrender. Inasmuch as
the borrower always accedes to the
wishes OF the prospective lender, the
general expectation Is that the German
government will receive sufficiently
large new credits to meet Its require
ments.
One Of the foremost leading groups
on the constructive side Of the market
has been picking up the pivotal stocks
the last week on the assumption that
financial aid will be extended to the
Germans and that announcement Of an
agreement will be made the early part
Of this week.
Since about half of the advance
which followed the announcement of
the Hoover debt plan has been Cancelled,
the technical condition of the market
Is believed to have been substantially
general list and the drying up of sell
ing would also indicate a belief on the
part OF the speculative element that the
reaction has proceeded far enough.
The course OF prices, however for the
immediate future will be solely depend
ent upon the nature of the news from
the London Conference, owing to the
fact that there has been little change
IN the condition Of general trade and
hllg1nQEG nj
Germany's Position.
A solution of Germany's financial
problem Is considered absolutely essen
tial to improvement in worldwide con-
oltlonS. The present financial crisis in
Germany, bankers point out, has been
In the making for a number Of years.
For the last seven years, they say, Ger
many has had an unfavorable trade
balance of approximately 81, 500, ooo, 900.
Because of this Germany has de-
pended upon foreign capital to finance
her adverse trade balance, as well as
Tor the financing Of reparations pay
ments. Germany's borrowings In for
eign countries during that period have
Appropriated nearly $4,0o0,O 900, 900.
Bankers add that this method Of
financing foreign obligations has
brought about steadily increasing obi
ments. Because of the world depression
the fow Of foreign capital into Ger
many has been curtailed, so that the
country Is left without the means to
finance her obligations, and this has
precipitated the present crisis.
It Is. therefore, considered necessary
to finance Germany at this time in
order to prevent further collapse
which would have most unsettling in
duence on the whole world.
Public Buying.
Because Of the uncertainty surround
ing the solution Of Germany's financial
problems, speculation in stocks has
been reduced to a minimum. Except
for one big group which is on the
constructive side of the market. there
The recent reaction has brought prices
down to a level where even the pro-
fessional bears show no inclination TO
sell stocks.
Investigation among the big bro
kerage houses reveals, however, the
small Spectator and investor has been
buying on balance. The excess pur-
chases over sales, however, are de-
clared to be small. 1t is further re-
public buying has been for cash. the
buyers paying for the stocks in full and
taking them out of the Street.
Unsettled conditions in Europe also
have found reflection in a quoting
down of the demand for bonds. The
dizziness in the bond market is ex-
pected to continue until there are IA
vorable developments abroad. Invest
ment bankers declare that there Is a
substantial volume of new financing
to be done, but that 1t will have to
be held in allegiance until the news
from Europe changes for the better.
Prospective Leaders.
Any betterment in the foreign situa-
ton is expected to find reflection in
improvement in the demand for the
stocks of mail order houses. Tobacco
stocks also are expected to show in
creased market activity owing to the
accumulation which has been going on
in those shares because of increased
earnings which are expected to result
from the advance In cigarette prices.
(copyrisht, 1891. by North American News