Evening star., 1933-02-05
UnfavorabIe Dividend News
Also Contributes to Weak
ness of Securities.
DEBTOR RELIEF PLANS
DECLARED HOPEFUL SIGN
Voluntary Action Of Life Insur-
ance Companies Should Aid Mort
gagors in Present Emergency.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK. February 4-For the
first time since the war debts discussion
caused market unsettlement last De-
cember, what may be described as the
foreign situation has this week In
fluenced both speculative and invest
ment sentiment.
The central episode in it was the
appointment of Adolf Hitler as chan
cellor of Germany. followed BY the dis
solution of the Reichstag and the out
break of disorders over Germany. This
inevitable sequel of two years Of in
creasing political strength by the Ma
tional Socialist party has been the
occasion for heavy liquidation of Ger
man dollar securities. 1t injects into
European affairs. which had been grad
ually improving, the unknown and
unmeasured capacity for leadership Of
a man with the ambitions Of dictator
and none too much friendliness for
foreign creditors.
The international aspect has also
been less favorable in other directions.
It Is becoming more evident that Great
Britain will take positive position
either for cancellation of debts or their
radical revision without quid pro quo.
It looks at the moment as though the
proposed World Economic Conference
might go to smash Canadian exchange
this week has been quoted at dis
count Of 20 per cent. All Canadian
dollar obligations have been under
pressure The effects Of the Ottawa
conference are to be found in this ex-
change collapse In Denmark the gov
ernment found it necessary to reduce
the rate Of exchange to better rela-
=; cta 1itnn IN,
to assist Danish farmers. whose market
for produce shipped to England has
been much prejudiced by the exchange
position.
Dividend News Bearish.
Had the political skies abroad been
cloudless this week there would have
been sufficient bearish news here to
have brought about reaction in stocks
and in speculative bonds. Following a
number of significant dividend reduc-
tions in the latter part of January.
there came on Tuesday announcements
of the omission Of payments on Stude-
baker Corporation per cent preferred.
which had regularly been declared for
nearly 20 years, during which the stock
sold at Sl27 share, and OF a reduc-
ton in the rate on United States Steel
7 per cent preferred, which had been
distributed since 1901. with the stock
two years ago.
On Wednesday the extra dividend of
81 a share on Standard Oil OF New
Jersey. one OF the strongest Of Aneri-
can corporations financially. was omit
ted. Other important companies like
wise felt compelled to relate their dis
bursementS more closely to current
earnings.
Altogether, new emphasis on the lack
of revival in industry was given by
these events and Wall Street, which had
ccme to the conclusion that the period
of smaller dividends was behind it.
began to reconsider the relation Of
market values of stocks to probable
income returns. At the same time the
recent troubles of the amusement COM
panies and of number of manufactur-
ing concerns sentimentally affected the
credit status Of bond issues that have
long been on the border line between
solvency and default.
Relief Given Debtors.
Congress has been discussing many
measures for the relief of debtors.
Meantime the life insurance companies,
which are the largest creditors Of the
farm owner class, have come forward
with practical measures for assisting
over the present emergency
period. This is the first major step
taken in the direction of voluntary
accommodation between those who have
borrowed money and those who have
loaned it. BY releasing farmers from
payments that they could not make so
long as their products were selling so
per cent under the pre-war average of
prices, and by agreeing not to foreclose
mortgages where there Is an honest ef-
fort by the farmer to carry out his part
of the contract, much of the agitation
for price fixing and for imitation will
be checked.
Copyright, 1889