Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-14
Everybody's
Business
Stock and Bond Mqrksts
Activity Hints Situation,
Both Here and Abroad, Is
on Way to Recovery.
BY DR. MAX WINKLER.

NEW YORK, January Ia tNAN'A'l'
The most encouraging signs IN tne
course of stock market trading yester-
day were the activity and rising prices
in the bond market. United States
Government issues participated In the
advance and impressive gains were re-
corded throughout the list.
The action Of the foreign bond mar
ket was equally encouraging. TINS leaoS
to the conclusion that the SITUATION
abroad as well as at home Is dlstlnctiy
on the mend To be sure, there may
as vet be few tangible evidences OF
business improvement. This will doubt
less follow If sufficient Improvement
takes place in sentiment. The latter Is
at times more important than facts.
1t has never appeared to be more so
than today.
A reduction by the Federal Reserve
Bank in New York on its buying rates
on bankers acceptanceS is regarded as
an attempt to stimulate credit eXpan-
sion and turn the trend OF COMMODITY
and security prices. 1t also may fore
shadow the purchase on an 1ncreaS-
ingly large scale of both Government
securities and acceptances In the open
market.
Rediscount Rate Cut Expected.
In addition it would not be surprising
if a reduction in the redlscount rate
were put into effect at an early date.
Competent observers expect reduction
by the New York bank at the end OF
this month.
If the above suggestions are in ac-
cordance with facts, one would be lusti-
fed in concluding that the outlook for
United States Government bonds and
other high-grade fixed-income-b bearing
securities may be viewed optimistically.
The proposed reconstruction finance
corporation affords the most promising
channels through which needed credit
may flow, according to Charles E.
Mitchell, chairman of the board of the
National City Bank. Under this plan,
Mr.. Mitchell continues, credit will be
brought directly to the point OF need.
Rail Farley Watched With Interest.
Commenting on the international
problems, the head of the City Bank
points out that no nation can Isolate
itself economically in these modern
times or prosper in world of chaos.
1t would be unjust and unreasonable,
he adds, to expect the American people
to take upon themselves solely the bur-
den of international adjustments, but
it may be urged that 1t is in their
interest to come to consideration OF
international questions with willing
ness to share with others in order to
speed the revival in which this country
as we'll as the world at large Is SO
vitality concerned.
The Forthcoming conference in Chi
cago between railroad executives and
labor leaders is being watched with In
terest. 1t is believed that 10 per cent
reduction will be agreed for one year,
instead of an indefinite period, as was
intimated previously.
The proposed reduction Is based upon
the earnings of the carriers and the
cost of living, both Of which are down
in relation to wages. If labor should
agree at the end Of the year to an
extension of the cut in the light OF
existing circumstances provisions will
be made for its continuance.
Motor Wheel Plant Steps Up.
According to D. L. Porter, treasurer
of the Motor Wheel Corporation, the.
company is now operating on sched-
ule which is 800 per cent more than at
any time during the past six months.
The increase Is due to substantial
improvement in the demand for the
various products of Motor Wheel, eSpe-
cially the demountable wood wheel for
which Mr.. Porter states, there are or
ders on nand for approximately 10000
more than last year at this time.
Senator Johnsons investigation of
American investments abroad Is likely
to result in an investigation Of the
practices and policies Of the State De-
partment with respect to the granting
of loans to foreign governments and
foreign institutions by American bank
ers One might perhaps inquire as to
whether American legislators cannot
find more constructive occupation, espe-
cially at time when it seems most in
need.
While it is true that certain irregu-
larities may have occurred in connec-
ton with foreign loan fiotations, the
majority Of American underwriting
houses have exercised whatever care
they could and if mistakes were made
they certainly were not made with a
view to misleading the investor n
Moreover, such mistakes are not con-
fined to foreign bonds. They are per-
haps as glaring If not more so, in the
case of many domestic transactions.
(Copyright 1892, by the North American
Newspaper Alliance, Inc