Evening star., 1932-03-09
REVIVAL NEARING,
F|NANC|ERS FEEL
Upward Swing in Market Due
Next, Exchange Firm
States.

In a statement issued today, G. MI
Murphy e. Co.. members of the New
York Stock Exchange today predicted
recovery for the country, financially
and induStrially.
"If our Judgment is correct, the next
major move will be upward" declared
to conquer, but that is true even in
battles when the tide of victory already
is running strong"
Two years and a half have passed
since the last mad imitation of security
and money values reached its peak
said the forecast of recovery"
Credit Flow Hampered.
I'm that time this country has suf-
fered from the pains of readjustment
with various false starts toward better
conditions. each failing, and each leav-
ing in its wake more disbursement
and less hope. The record of bank fail
ures has been alarming to the whole
community and it is estimated today
that over $1,000. 900 600 of our gold
and currency Is being boarded in strong
boxes or other places of concealment.
The solvent banks in turn, fearing runs
by depositors. have insisted on main
tanning excessively liquid conditions.
Normal credt and investment policies
have ceased to operate and the business
of the country, deprived of the life
blood of capital, has dipped to the low
est point in many years.
ut is granted that many of the
financial readjustments now indicated
by market values must be accepted be-
fore a period of sound prosperity can
be witnessed. Swollen real estate valua-
tons. as represented by inflated bond
issues and mortgages, must be reduced
substantially and may be reduced
in many cases to figures which are alb
normally low. Great losses in these
properties must be conclusively real
lied before the real estate market can
again resume a definite upward trend.
The Government budget must be bal
anced-which means heavy taxation
and reduced expenditures for public en-
terpriseS; the State and municipal Sc
curity situation must undergo drastic
blood-letting and entail new policies of
economy on the part of our States,
counties, cities and towns
THE foreign situation Is generally
bad. Radical readjustment of many in
ternational debts is inevitable, but will
be eased it is hoped, by negotiations
between debtors and creditors. World
riers. for which the United States is
originally and primarily responsible,
and for which we are now bound to
pay full price through adverse effect
on our foreign trade.
Fortunes to Be Made.
"In such circumstances, it is easy for
men to throw up their hands in de-
spair and abandon themselves to hope
lesSnesS. But it is in just such circum-
stances that men of courage and calm
Judgment lay the foundations of great
fortunes This firm does not believe
that the long-term growth of our coun-
try has stopped We believe in its re-
sources and its financial strength. but
even more we believe in the courage
and resourcefulneSs of our people, and
in their sound common sense, once their
heads clear after their debauch of
speculation. 1t is absurd to attribute
to the security markets alone, or even
principally, the imitation OF the great
boom. The Florida land speculation,
the hectic ballooning of real estate
prices, the vast extravagances of prl-
yate life. the loose waste of public
funds. and the careless credits granted
by banks, small and large, throughout
the country. all contributed to the pa
thetic climax.
I'VE believe that the worst Of the
storm has passed. The extent to which
deflation has taken place is not gen.
erally realized. Stock Exchange loans
have nearly disappeared and recognized
stock price averages have declined more
than rs per cent. Many commodities
are selling at prices not seen 1or
generation and others are at leVeis
lower than ever previously recorded.
- Ctafn v1oJInIn1nQl
real estate and other domestic bonds in
general also indicate a large measure
of defation The same thing is true
of the market values of foreign bonds.
To all intents the individual has
adjusted his ideas of capital values to
conform to current market levels. In
other words, the American people
admit their losses an essential prerequ1-
site to rebuilding.
Common Sense Seen.
"If our Judgment is correct, the next
major move will be upward. We have
troubles still to conquer, but tnat is
true even in battles where the tide OF
victory already is running strong. The
following fundamental elements we es-
innate as of great strategic Importance
to the fight for recovery:
"G) In all of this distress, the con-
slant drift of our people has been
toward sound common sense and away
from selfish or socialiStic noStrums or
communistic destruction. The vote OF
the American Legion against the bonus
was one of the most heartening events
in the past three years.
"(2) Labor unions have demon
strated a realization that strength car
ries with it responsibility and that
business is a partnership in which labor
is one of the partners.
"(3) Both parties in the Congress
have shown a spirit of fine and united
patriotism unequaled in this genera
tion, except under the stress of war.
80 The Congress proposes to bal
ance the budget and. hard as the bur-
dent on the taxpayer may be, it is
burden we should all assume cheerfully
because of the obvious ultimate ad-
vantages to us all.
"C5) Recent constructive efforts and