Evening star., 1932-02-21
BOND
MARKET HOPEFUL
Stock Market Churned Up by
Renewal of Controversy
Over Short Sales.
BY CLAUDE A. JAEGER.

NEW YORK, February 20 R.-The
most encouraging aspect Of the nnan-
cial markets this week was the per-
sistent strength Of bonds.
Stocks churned about erratically, Is
traders went through various phases
Of enthusiasm over the reconstruction
program developed in Washington,
while waiting impatiently for indica-
tions of tangible business improvement.
There was no mistaking the firm
undertone Of the bond market, how
ever, and bankers said the only inter-
pretation to be placed upon it was that
efforts to bolster the Nations bank
ing structure were taking effect In
decisive fashion.
Bear Row Renewed.
The controversy over short selling
famed up anew, injecting an element
Of uncertainty into the stock market
late In the week. Brokers were plainly
nervous over the prospects Of legisla-
ton to curb speculation. President
Whitney Of the Stock Exchange Is
slated to appear before the House
Judiciary Committee next week, and
his remarks are awaited with interest.
The Stock Exchanges ruling, effec-
tie April /, that brokers must obtain
specific permission from customers be-
fore loaning their stocks to short sellers
brought only momentary furry OF
covering, but 1t was generally felt that
it would tend to restrict bear activity.
How much was moot question.
Stocks, as measured by price aver
ages, lost about points net during the
quarters of the sweeping advance which
greeted the Glass-Steagall bill IN the
previous week. 1t was notable. how
ever, that the advance early in the week
met formidable resistance at the level
at which the market was turned back In
its January upturn. Furthermore, some
traders were inclined to feel that the
technical position had been greatly
weakened by the elimination OF much
of the short interest.
Need Better News.
Some brokers felt that fresh sources
Of market rallying power might be dtm-
cult to find, until business news bright
ems. Nevertheless, the opinion widely
prevails in Wall Street that further
bullish ammunition Is in preparation m
washington. An indication OF tpcreas-
ing speculative interest appeared IN .
gain Of $4,000, 900 In brokers loans, the
first gain in "a weeks.
The Bank of Englands cut IN its dis
count rate to from per cent was &C
cepted as hopeful sign, and there were
some vague rumors of impending favor
able developments in Paris. But foreign
DEVELOPMENTS had little effect upon Wall
Street.
The weeks corporate news brought .
surprise in Southern Pacifics failure
| to order Q quarterly dividend: The
regular quarterly payment Of $2.25 by
American Telephone had been generally
expected, although there had been
little gossip over a possible reduction
to SITS. Chrysler Corporation ordered
its quarterly dividend Of Is cents, but
Hudson and REQ omitted common dis
bursements. Important dividend meet
ings next week are those Of American
Can and Allied Chemical on Tuesday.
American Tobacco and Westinghouse on
Wednesday, and General Electric on
Friday.
The weekly Federal Reserve state
ments again failed to indicate any
notable developments toward credit ex-
pansion, although some bankers expect
more aggressive policy after enact
ment of the Glass-Steagall bill. The
reduction Of only $17,000,000 in cur
rency In circulation was somewhat dis
appointing, but was markedly better
than the previous week, when the re-
duction was $5,o00,00o.