Evening star., 1932-01-31
Liquidated Condition of Mar
ket Shown by Action of
Past Week.
TRADERS ARE UNCERTAIN
ON FUTURE PRICE TREND
Opinion Divided on Whether
Equities Have Now Touched
Their Ultimate Lows.
BY CHARLES F. SPEARE.

NEW YORK. January 30.-January
Is ending with domestic and foreign
| bonds well above their average at the
close of last year and with an absence
| of liquidation from banks and private
investors. Stocks have not reacted to
the low level reached early in the
month, though this weeks decline has
reopened the question whether they
have touched their ultimate bottom.
The zone Of serious political disturb
| ance has shifted from continental
Europe to the Far East, with complica-
tions growing out of the attack on
Shanghai by Japan that may intro
| duce new element into an already
unsettled international situation. TAX
| ing this into consideration, and with
the significant dividend announcements
recently, it atteSts to a liquidated con-
| dition of the stock market It has
| performed well in registering such a
relatively small decline lately.
Credit Relief Provided.
The month ending today has been
devoted to the development of agencies
that can take the strain from corpora
| tions and institutions whose credit has
| half year period of depression; also in
! bringing to a focus wage adjustments
| that have seemed to be necessary if
certain industries were to remain SOL
vent and others to reconcile differences
| between producers and consumers
| During January there has arisen a new
economic philosophy which looks upon
| continued dedation as unreasonable
and is promoting policy of moderate
| imitation to counteract the forces of
depression. The new thought has been
expressed this week by the Undersecre-
tary OF the Treasury. Ogden L. Mills,
| as follows:
The calamitous process of deposit
| and credit contraction must be arrest
ed. The flow of funds from all parts
OF the country to the financial center
should be reversed. The fun use of
available credit should be encouraged.
Each bank should become a strong
point, radiating strength and conf
dence. Resources are truly important
only to the extent that they are used"
The machinery of tie Reconstruction
finance Corporation is being set up.
1t Is about ready to give aid to It's
most urgent applicants with funds that
nave been created out of this weeks
treasury sales. Supplementing 1t are
is operating more smoothly and effec-
lively among the distressed banks; the
Railroad Finance Corporation and the
Federal Land Bank. These combined
auxlliaries to normal banking facilities
ought to absorb the emergency situa-
tions throughout the country and per-
nit national and State banks to return
to the business of rendering accommo-
dations to good clients. There is little
excuse for them now to sell out the
collateral of customers or to maintain
the fantastic degree of liquidity which
they established at the end of Decem-
Der and have quite generally main
talned during January. AS Secretary
Mills states, resources are truly i'm
portant only to the extent that they
are used" Unwillingness to employ
them frequently leads to belief that
the status of an individual institution
is not as secure as it is pictured.
Check Liquidation First.
In their early stages the effect of
the new reconstruction agencies will
be that of checking liquidation rather
than promoting expansion. There
fore, the public may for some time
feel a sense OF disappointment in their
efficiency. 1t is necessary, however, to
structure can be erected and until
confidence can be permanently devel-
oped by period of suspended and
completed liquidation, definite upturn
is impossible 1t Is the belief that
such confidence will be steadily pro-
NOTED.
Unless there is to be an entire re-
casting of our economic structure. and
this is not now apparent, the mortgage
obligations of we'll managed railroads
and public utilities and their common
and preferred stocks are today at
level that compels serious considera-
ton from the investing public.
Aid Given Germany.
Progress has been made during the
week in easing the position OF Ger
many's creditors by one-year exten-
sion of the "standstill'' agreement on
short term loans Had 1t not been for
the Shanghai episode there would have
been a more comfortable feeling over
the entire foreign situation, as there
were evidences of some concess onS on
the part of France to the more mod
crate reparation terms OF the other
European powers. 1t is obvious that
Japan is now taking advantage of the
economic crisis all over the world to
impose her authority in China. This
fact makes her action the more unpop-
ular and reprehensive.
The delay in carrying out the policy
of imitation which the Federal Reserve
Board began two weeks ago, when 1t
lowered rates on bankers bills, Is due
to the French Withdrawals OF gold and
was adopted In order to modify the
opinion abroad that this country Is
launching out on definite inflationary
program.
The railroad wage negotiations pro-
ceeded slowly during the week as the
score or more of labor organizations
considered the petition of the carriers
and, independent of each other, voted
on it. wall Street has been irritated
over the delay, but when the amount
involved is considered, as well as its
effect on the income of a body Of work
ers whose actual earnings in 1880 and
in 1881 were not high, the time given
to discussion Of the 10 per cent cut can
not be regarded as unreasonable. With
a possible 5000, 100000 saving in wages
and a $4,000 1000 addition to freight
rates, plus assurance that any carrier
with legitimate claim can receive as
sistance from the Reconstruction Cor
poration, it is apparent that brighter
day Is dawning for the railroad indus
try. This should infuse new blood into
those industrial arteries that are al
ways nourished when railroad credit Is
good.
Copyright, 1922
Britain's coastline, 5000 miles long,
is now guarded by 300 men In the coast