Evening star., 1932-03-06
MARKETS
SHOW STRONG TONE
IN WEEKS TRADING
Some Commodities Also Dis
play Firmer Trend and
Rising Prices.
u. S. BANKING SITUATION
is GREATLY IMPROVED
Business Statistics Continue Mixed,
However, and Dividend Reduc-
tions Become Numerous.
BY CHARLES F. SPEARE,

Special Dispatch to The Star
NEW YORK. March 5.-The most
important incident in a week that has
witnessed higher markets for securities
and some commodities, and during
which there has been an added growth
in confidence, was the announcement
that the British treasury would repay
before the due date S150, 0,0OO,OO of the
5000 .O0O, 900 banking credit obtained n
this country Lass August.
This reflected not only the surprising
recovery in British finances within six
months of suspension of gold payments,
but was another exhibition of the ira
ditional respect Of London bankers for
their obligations and was the more i'm
pressive since it came at a time when
there is the too frequent attempt to de-
fault or to extend maturing commit
ments 1t adds to the banking prestige
of England and places that country in
a more favorable position from which
to negotiate in subsequent credit and
political arrangements. 1t is part of
the process, now gaining force, to dis
entangle the complicated maze of in
ternational money affairs. Along with 1t
is evidence of an easier credit condition
In the falling rates for bank discounts
and for bills.
Great Britain has also reduced the
credits secured from France. Her fiscal
situation is steadily improving. When
the government deficit in this country
as well as France and in Germany is
increasing. there is the suggestion that
England may come to the end of her
official year showing surplus. Inas-
much as the banking crisis in the
United States developed its acute phase
after England suspended gold payments,
it is of great significance that she is
rapidly putting her house in order and
is again preparing to play her part as
an international banker and trader.
Bank Situation Strengthened.
Comparative peace now reigns in the
American banking world in contrast
with the chaos of the period between
September and the early part of Feb
ruary. Bank suspensions are rare.
This Is not only because OF timely as
sistance from the Reconstruction
Finance Corporation, which has taken
over most of the work of the National
Credit Corporation, but Is due to the
greater confidence on the part of bank
depositors. There is no evidence yet
Va q ACbulli VI AlOdIuCO luOilcy Ill ANY
substantial sums. This may be quick
ened by the sale of so-called baby"
bonds IN spite of the lack of incentive
that this type of issue affords. While
the Reconstruction Corporation has
already accomplished much in reliev-
ing acute banking troubles, there is
beginning to be an indication of a
freer Offering of banking credit and of
an acceptance by banks Of the new
privileges afforded by the week-old
Glass-Steagall bill.
The emergency loans, which the Re-
construction Finance Cooperation is
making to the railroads reveal. in the
applications for them, the precarious
condition of most of the carriers, whose
current cash accounts have dWindled
to the point where they could not meet
all of their vouchers for labor and ma
terials, and, without replenishment,
must have compelled them to default
on serial payments of equipment trust
notes. 1t is apparent that this agency
will be forced to use its funds to the
legal authority and that the conditions
with which 1t is dealing are infinitely
worse than those which earlier faced
the War Finance Corporation. 1t is
understood that the most pressing sit
uation in the public utility field, and
one that has given grave concern re-
Gently, has been. relieved by the Dawes
organization.
Restoration Of Confidence.
With the protecting arm of the Gov
ernment thrown around institutions and
corporations that could no longer help
themselves. it may be taken for granted
that there will be no further disturb
ing outbreaks in financial or business
circles. Just how far confidence will
be permanently established by this, un-
less there is proof of industrial pro-
gress here and of political reconcilia-
tions abroad, remains to be seen. The
Improvement so far is sentimental. The
tide is still running out. The latest
Bradstreets index Of wholesale COM
modify prices reveals it on March l at
the lowest since August, 1899, and 46
per cent below January, 1923. The
general index, however, has been al
most stationary for several weeks, with
a decline in metals balanced by an ad-
vance in other commodities
Iron and steel production has SO far
made no response to the proposed Ford
program. Car loadings waver between
small losses one week and moderate
gains the next. Some roads report a
Slight increase in traffic last month
over January due to local conditions
The volume of electric production has
been decreasing. The power and light
industry, which pointed upward for
nearly a year and half after general
business turned in 1929, is now feeling
the cumulative effect of industrial stag
nation. Building construction suggests
comparatively little expansion on the
eve Of the season when development
begins, though there is reported to be
much repairing and replenishing as a
result of the lower wage scare and
more advantageous basis on which to
purchase materials. Retail trade, ex-
tremely poor in January and February,
is somewhat better this month In the
past 10 days the national distributors
have noted a more responsive attitude
on the part of their regular patrons.
More Dividend Changes.
These conditions have a sequel in
additional changes in dividend rates.
The most significant this week was the
reduction by the General Electric Co.
to 81 a share basis from the level of
S160 share that had been paid on
the present stock Thus three of the
outstanding industrial corporations of
the country, General Electric, United
States Steel and General Motors. have
been compelled to make radical cut
in their profit sharing policy and one
that affects the incomes of tens of
thousands of investors. Corporation
dividends recently omitted include those
on Johns -Manville common, Utilities
Power & Light common, Lef1igh Valley
Railroad preferred, Hahn Department
1ContinlIed on Third Page)