Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-18
FURTHER F|RMNESS
SEEN FOR MARKETS
Some Initiation Expected to
Follow Reconstruction
Corporation.
BY CHARLES w STORM,
Editor the New Service of Wall Street.


Special Dispatch to The Star.
NEW YORK, January 10 (N.AN.A).
Progress toward sterilization in the
banking and credit situations is ex-
70 pected to continue this week to be the
motivating influence for continued
firmness in the securities markets.
w. The general stock market has al
ready discounted much of the good
p expected to accrue from the construc-
tive developments at Washington, but
the actual creation of the Reconstruc-
-ttion Finance Corporation will probably
cause further stimulation OF prices.
private opinion in the financial dis
trict is that the formation of the ST.
900, 600 900 Reconstruction Finance
Corporation will mark the inception OF
b a period of imitation. Publicly, bank
ers declare that the issuance OF securl-
, ties by the new finance corporation Will
merely result in the transfer OF frozen
assets"
THE stock market, however, has been
advancing largely on the theory that
3 there will be imitation, which always
means higher prices for stocks.
3 Advancing prices for commodities
r usually accompany initiation so that the
sharp advance in the price of wheat on
Saturday was in line with the general
expectation of future expansion III
, credit. Saturday was the first time that
wheat has shown an advancing ten
~ dencv since the stock market started us
rally from the low level reached on
January 4, last.
The failure of wheat to advance
while the stock market was going Tor
ward cast some doubt on the inhatlon
theory, but this doubt is now being as
sipated by the appearance OF strength
I in the price of that commodity. con-
tinuation of the improvement in wheat
quotations should furnish an additional
influence for higher security prices.
While the actual beginning Of nego-
.tiations between railroad executives
and railway labor representatives for
reduction in wages took longer tIan
expected, the fact that this discussion
has actually started is considered en-
icouraging. While there is yet no IN
,dication that the employees VIII acCePt
a lower wage. the belief continues that
the results of the conference Will be
favorable from the viewpoint OF Ihe
common carriers.
The fact that some important people
have appeared as buyers of railroad Sc
~curities the last week would seem 10
}. lend color to this belief. Railroad Sc
curitieS have had an appreciate up
turn the last fortnight by way OF dis
counting settlement of the wage dis
-cussion.
Growing optimism with regard to the
future of the securities markets, how
4, ever. promises to be somewhat tenn
pered by the resumption of another eX.
port movement of gold from the United
States. The announcement late last
week that $16,000,000 of additional gold
=. had been earmarked for shipment to
France and Belgium is accepted as the
beginning Of this outward movement OF
,. the precious metal. The most recent
: substantial export movement OF gold
! occurred last Fall, when the aggregate
amount of the metal shipped abroad
was approximately 100000 900.
q. The prospect Of favorable develop
ments in the economic situation seems
TO outweigh the possibilities of I'M
. favorable news, and for that reason
b. the outlook for the stock market con-
tinues TO be regarded in favorable
light.
r. (CopyriKht, 1892. by the North American
Newspaper Alliance. Inc)