Evening star., 1933-08-20
Trade Improvement Expect
ed to Set in Again After
August LuII.
CONSUMER APT TO FEEL
GRAIN SHORTAGE ACUTELY
Possibility That U. S. May Have
to Import Wheat Despite Carry
over Stressed.
BY CHARLES F. SPEARE.


Special Dispatch to The Star
NEW YORK, August 1e-While the
scope Of the recovery plan is being ex-
tended and new recruits to it are being
enlisted, the work Of correcting some of
the speculative abuses Of its early period
is being carried out This compels ad-
justments in the markets for securities
and commodities that should be perma-
nently helpful
During this transition time the dis
position Of the public is to stand aside,
and as it comedies with season when
interest in price movements is nor
mally low. we see the exchange given
over to professional traders. Tempo
rarily grain and cotton command more
attention than stocks
Wheat once more is to be allowed to
take its own market course. 1t is
claimed that the policy of fixed prices
has been detrimental to growers and
merchandisers of it. so the peg" has
been removed with the December option
80 cents bushel under the level OF
month ago. That the substantial pre-
MUM over the desired dollar mark was
due to imitation expectancy rather than
to natural conditions is now apparent,
crop prospects have grown steadily
worse Meanwhile for technical rea-
sons, prices have declined.
Consumer Watching Rise.
The latest Government figures indi-
cate wheat yield the smallest in 40
years Nature has way Of correcting
surpluses as well as deficits. 1t Is not
unlikely that this country will be COM
Iaf0 ia
crop is available. This in spite OF
carry-over from 1882 of 1886, 900, 600
bushels The scantiness of the corn
crop later will be reflected in feed prices,
which will be quite visible to the con-
sumner. who is steadily growing more
conscious of the sacrificial part he Is
to play in the present scheme OF Dusl-
ness recovery.
As time goes on he is bound to be-
come more vocal and to ask questions
the directors of N r. A. may find diff
cult to answer. Just now he is willing
to fall into line and do nothing that
will embarrass the administration IN
its efforts It is still not clear to the
man in the street why it Is necessary
to give certain producers such advan-
tages as the processing taXs provide, on
top of the substantial recovery in the
prices of what they have to sell.
In spite of all that can be done to
revive industry in the coming three
months there will be millions of unem-
ployed next Winter and as great a
number whose incomes will not then
have risen to any appreciable extent.
Seasonal Slump Slight.
There were again this week signs Of
a seasonal slowing down in trade, plus
the effects of confusion and delay over
the new business codes and several con-
spicuous differences between capital
and labor.
The remarkable fact. however, is the
smallness of the decline considering the
extent of the previous advance and the.
slump in the speculative markets. OBJ
viouSly, the spread of industrial re-
covery in the Spring and early Summer
was helped by the rise in securities and
in commodities. This suggests that the
Improvement will set in again after the
August lull and that, while it may be
less vigorous than before. it will be Of
more substantial character
The buyer of stocks argues that he
has an insurance against loss, for, if a
natural business recovery persists. the
ratio of earnings to prices will advance
and dividends will be resumed or in
creased: if business seems to lag, the
full force of the initiation program will
be directed toward higher commodity
levels, in which case equities" also will
rise. The average decline in stocks last
month was 20 points. Half of this has
been recovered.
But there must be either a more
positive net gain in corporation reports
or an active initiation campaign to
justify rise from this level Today
the market has caught up with all of
HY1n fo iy, hn e{S,
alton.
Utilities Lose Favor.
The case of the public utilities differs
from that of the railroads and indus
trials. Their securities are at pres
ent under suspicion. There is the same
discrimination against them that for
years had been shown toward railroad
stocks and bonds.
There is still justifiable faith in the
utility operating units. Their mortgage
bonds and preferred stocks have shown
splendid stability throughout the de-
preston.
The unsoundness of the holding COM
pany, whether in the public utility, rail-
road or banking field. is shown by the
TACT that the conspicuous failures In
each group in the last three years have
been those where speculative interests
have attempted to gain control of large
aggregations of capital, at a small risk
to themselves, to exploit it and to draw
investors into their net through this un-
holy medium
The public will more and more take
the place of the banks as investors in
Government paper. 1t has lost its fear
OF dangerous Federal deficit The
Government cash balance this week is
the largest in peace-time history. In
the first six weeks of the new fiscal
year Treasury receipts were within
$:5,000,000 of general expenditures
compared with an excess of the latter
over the former. in the same period
OF 1882, OF 10 times that amount.
Seasonal influences are having more
effect on the dollars price than the ex-
pectancy Of imitation The opinion
abroad is that it will be October before
the real clue to the Governments policy
as to stabilization or devaluation will
be available. 1t is felt, too, that a cur
rency crisis will then develop among the
gold countries.
CCopyright, 1893. by Consolidated Press
Association.)