Evening star., 1932-06-04
SECURITY MARKETS
IN BETTER TREND
Tax Bill Action and Bond
Support Plan Check
Long Decline.
BY JOHN L. COOLEY,
Press Financial Writer.

NEW YORK, June A dizzy decline
in security prices was halted this week
when Congress. working overtime,
pushed the revenue bill through confer
ence and back to both houses, giving
financial sentiment so sturdy lift that
l8 large banking institutions quickly
pushed through their plans for a securi-
ties investing company.
How the Government economy pro-
gram was to fare or what was to be
done about Federal relief we're unde-
cided issues as the week drew TO close: I:
but achievements already recorded at
Washington gave new hope. Sponsors
of a huge new investing corporation
made it clear that their activities would
depend upon a satisfactorily balanced
budget; nevertheless Wall Street as
sumed they were reasonably certain that
goal had been reached before they an
nounced their proposal late yestrday.
Liquidation Severe.
Liquidation while it lasted. was Sc
we're, but the rebound. starting on Thurs
day, was vigorous, as it usually is after
a period of pronounced depression. Vol
ume on the decline held under 1000, 900
shares, although that was substantial
turnover according to recent standards,
and percentage declines were large. On
Tuesday, for example. stocks had an
adverse loss of points. or per cent
Bonds on that day wallowed in a bid
less morass.
The markets first reaction to pas
sage of the tax bill in the Senate was
favorable, but rally encouraged selling
and stocks offered the puzzling phe-
nomenon of reacting, despite good news.
However, recovery gained a stronger
foothold when it became apparent that
organized support for the investment
market was on the way, and yesterday
bonds made their best showing of the
year 1t was apparent that a new fac
tor. of practical and psychological i'm
portance, had been injected into the
financial situation.
This is an important month on the
international calendar. Germany's po-
litical readjustment, coming on the eve
of Lausanne and expiration of the
moratorium year. received close analy-
sis. It seemed improbable that change
in cabinet could alter the reparations
issue which seems to have resolved it
self into a question of how much FUR
ther the moratorium shall be extended.
Meanwhile the Reichsbank. confronted
with a diminishing foreign trade bal
ance. is building up its gold but losing
exchange. the net result, however, being
favorable.
Gold Withdrawals.
Heavy drafts were made on gold here
by foreign banks Exchange move
ments. on the whole. narrowed, favorlng
dollars when the Senate passed the tax
bill but steadying later. possibly be-
cause Of Europe's fears that inflationary
legislation would be adopted by Con-
press. Because foreign balances and
Investments have been sharply reduced
in recent weeks the deduction was that
gold losses should soon diminish.
Federal Reserve purchases OF Govern
ment securities were cut to $50 900,
or Just half the average volume in the
first four weeks of the credit campaign.
Gold shipments and seasonal rise in
currency ciculation caused shrink
age of $89 100000 in member banks
reserve balances and pulled excess re-
serves below $300,000,O00.