Evening star., 1932-01-25
STEEL DIRECTORS
MEETING WATCHED
Immediate Course of Stock
Market to Depend on
Dividend Action.
BY CHARLES w. STORM,

Editor. the News Service OF Wall street.
Special Dispatch to The Star.
NEW YORK. January 25. - While
the signing Of the Reconstruction
Finance Corporation bill by President
Hoover marks the beginning Of a COM
prehensivs effort to revive the general
economic situation, its effect as a con-
structive influence on the general stock
market has been expended for the time
being
For this reason the directors meet
ing Of the United States Steel Corpora
ton scheduled for Tuesday is of con-
siderable Importance as a stock market
factor, since action with regard to the
dividend declaration will be used by
many spectators and investors as a
basis in formulating future plans.
Former Rumors Confirmed.
If a lower dividend is declared the
market will interpret that announce
ment as unfavorable. If the current
rate of 81 a share annually is main
tanned its declaration should have a
favorable effect on the prices of stocks
even in the face of a poor earnings
statement for the fourth quarter of the
year and for the entire II months.
The rumors which preceded the last
dividend declaration when the rate was
4ENuCCN "GAG DCiOCd Oll IdSb NIllIIl " do
confirmed by the action of the board
of directors. There has been no lead"
on the action to be taken at Tuesdays
meeting, and this is as good a reason
as any for expecting the regular rate.
Declaration at the present rate
would be considered constructive in
that the boards of many corporations
use the Steel Corporations actions as
a yardStick.
DESERVING Bull Side.
Those big operators who were re-
sponsible for most of the improvement
which occurred recently in the stock
market have become impatient over the
failure of the railroad executives and
railroad employees to settle the wage
dispute. Realizing that the favorable
effect Of the Reconstruction Finance
Corporation has been expended, the
delay on the wage question caused
them to sell many of the stocks ac-
quired in the belief that the wage dis
pute would be settled quickly and IA
vorably for the railroads.
A sudden settlement of this matter
in favor of the common carriers, how
ever, would have most favorable
effect on the stock market.
Another reason for the desertion of
the bull side of the market by many
of the big operators is that the recent
upward movement failed to attract
public following, thus preventing the
operators from distributing their stocks
and replenshing buying power with
which to push the market to higher
levels.
The public, instead of coming into
the market, has fought the rise with
persistent short selling. Brokers now
estimate that the short interest among
small traders is greater than it has
been at any time in several weeks.
Necessitous Liquidation.
third, for $50,000,000 by the National
Credit Corporation indicates that it is
steadily extending aid to the banking
situation The good work being done
in this direction is finding reflection
in the absence of any more bank clos
ings.
Those institutions which have closed.
however, are again liquidating securi-
ties which compose substantial part
of their assets This selling began to
appear toward the close of the week
offerings made by large operators.
Business improvement.
Some slight improvement is reported
in business. The steel industry has
reported a small expansion in opera
tions due to increased buying by the
automobile companies, and there has
been betterment in number of iso-
lated directions.
The general securities markets are
now waiting on the Steel Corporation
meeting for incentive. In the absence
of a new stimulus the stock market
Is epected to exhibit a sagging tend
ency until the Steel Corporation an
nounces it's dividend action after the
close of the market Tuesday.
Copyright. 1892. by the North American
Newspaper Alliance. Inc0