Evening star., 1932-03-09

LEGISLATION resulting in the National
Credit CORPORATION, the Reconstruction
Finance Corporation and the Glass
Steapau act have relieved our strained
credit structure to such an extent that
we NAV reasonably anticipate an end to
the banking distress OF the country ana
at least q gradual return OF commence
In our financial institutions.
"(6) Out of the welter OF foreign as
tress come the courage ana strenetn Oh
England's offer to anticipate LIE .ne ano pay
nno cold obligation to the American
honkino orolIp which came to her as
sistance in the black days OF last Au.
ullst with this is coupled the repot
that. after sufferings ana onncuiI.eo
such as this country never mas Known,
Britain is fighting her way through 1,1i.s aats
sees a definite upward road aheao. WIN
Confidence she has just remoVeo I
strictions ON the export OF steIlltis'
Moreover the flow of gold from Inola
to england may conceivably De IlaJoi
factor Influencing turn for the Detoer' oen
So far it is reported that slLo,Uoo,oUo
has come from India and, Whne ,ss.i Ss.,
mates of the future now are VI nno Sce
worth. possible figures OF over sl'TTUi Tpi.
100000 have been menIioheu' o.,,rr,
gold is all boarded metal anu iI' ~ tbo
to monetary use is comparaple W
discovery of new mining aie"
Praise Labor's Stand.
"C7) Thanks to the co-operatloh VI ol
labor in voluntarily accepting Wdse
ductions, and to the energetlc nleeitSr' tar
of our operating staffs, radical anu aa 70
reaching economies have been eHectco
In our production costs, and many III
dustries in the United States now oan.
chow nrofits on volume q puoI.' puoili.In
and at selling prices which. 1ornieiS
would have entailed heavy loss
"(S) Corporation managers are ~
cepting conditions as they are ano az
i,1stinR balance sheet values olIiue,iN'
and policies to conform Win tnehn 20
Specifically, we believe that tlie iii
storation of confidence in our panhs VIZ nt
result in the return to circuiaCion ,, ~
boarded money. Once the now VI 0u
rency Is definitely reversed tne o se
SHOULD lose their fear of runs ana cease
straininq to keep unduly liquid. GraiiI- Gii
cd this. bankers should look WIN ols-
favor on surplus idle funds proouciLs
no earnings and seek sound proouctlVS
loans and investments yielding goot
return AS a result. the BOND MARK.
should rise and, in due course ClIe
stock market should follow AS secul-
ity prices rise the holders OF SecurlIles
will see the cash value of their assets
increase and long delayed buying Oh
necessary merchandise and other prop
erty should commence. This puyihs
should start again the WheeS Oh N
dustry. AS a necessary corollary' cal
loadings should increase and. as tlie
railroads commence to prosper M
creased outlays for maintenance anu
replacement of equipment should iol-
lew. The recovery will be cumulative
in its effects. During its early stages
those whose vision extends beyond pres
ent problems will be buying securities
Others. in time, will look back on these
dark days and wonder why the? haa
no conception CT what our Ingenious,
ambitious people, aided by great ma
tional resources, would accomplish.
Cautious Investors.
eve recognize a distinct difference
between securities dealt in for short
speculative swings and securities bought
for investment. Perhaps there will be
no general upward trend in equity Sc
curities until the investment market
improves and there are definite ndi-
cations OF recovery in business volumes.
speculative trading, accordingly should
be based, for the present, purely on
current information. and we do not
attempt to deal with it in this letter.
I'VE do advise the outright purchase
for investment at current prices OF
sound bonds and stocks of companies
which face no debt problem for which
reasonable solution is not obvious and
which have shown that even in this
depression they can earn profits"