Evening star., 1933-10-22
MARKET CONFUSION
FOLLOWS FOREIGN
CAPITAL SHIFTING
Influenced by German Atti.
tude and 0verpIayed InfIa-
tion Prospect.
INC0NSPICUOUS SIGNS
POINTING TO RECOVERY
Commodities Trend Regarded Hope.
fully as Are Employment and
Other Conditions.
BY CHARLES F. SPEARE.

BY CHARLES +. SPEARE.
Special Dispatch to The Star.
NEW YORK. October 21.-The tur-
moil in the markets this week arises
from the fright that foreign capital has
experienced In the warlike attitude of
Germany and from the liquidation OF
securities and commodities by Specula-
tors who overplayed the initiation pros
pect.
The dollar has bounded up and
from par to less than 80 per cent;
francs have been at times under great
pressure. with the suggestion that
French as well as American funds were
moving to New York: and wheat has
sold so cents a bushel under the July
price, compelling Government support.
In the midst of this confusion the
$500 900 900 issue of new Government
subscribed and the conversion OF the
Fourth Liberty 4l4s has progressed
satisfactorily.
Stocks Trend Lower.
The most consistent Of the elements
in the situation has been the stock
market. 1t has declined when the news
was good and when it was bad: when
exchange has been in favor OF the
dollar and when against it, and fire.
quently as wheat was recovering from
its slump The explanation Of this
seems to be that the tag end Of a
speculative account, built up during the
Summer, was being liquidated and that
the QUESTIONABLE sent to the Stock Ex-
change by counsel for the Senate In
vestigating Committee contained sug-
gestions that were ininical to the pro-
fesSiOnal or public trading element
from which the exchange receives its
largest commissions.
On this liquidation the stock mar
ket average has declined below that
Of July. Present prices might be said
to reflect the sentimental improvement
that followed the bank holiday, but not
that represented in the actual gains In
industry since July. Therefore, from
q technical standpoint and based on
intrinsic values, stocks are entitled to
more consideration from the investor
than has recently been given them.
There is justification for the conf
dence that sound money advocates have
received from the method adopted in
converting a portion Of the Treasury
short-term debt. 1t is also logical to
assume that, after seeking the support
of the American public to a new issue
Of bonds, the Government eould not
soon repudiate its obligation by entering
upon currency imitation program. 1t
is obvious, however. that the movement
for higher commodity prices is making
little headway. The administration Is
known to be disappointed in it. The
case Of those who have demanded infia-
ton in behalf of the farmer is much
stronger today than a month ago when
they presented it to the President.
Foreign Factors Involved.
Just how we can escape another ap-
peal for currency expansion to, redean
promises for higher prices is not now
apparent. 1t would be easier to resist it
if those who oppose imitation had plan
on which all sound money advocates
were agreed. There is no such plan.
The nearest approach to it is for de-
valuation of the dollar. This is confused
by the price variations of the radicals
and the moderateS Of the devaluation
school. With Europe in such an un-
settled political condition and stabiliza-
tion of the dollar detached from ster-
ling. there would be gold flow to this
country that would demoralize foreign
cuTencies and security markets and
French bankers and the French
government insist that France will not
60 of gold; that the French people
would not tolerate fiscal policy that
would expose them to the torments Of
the last era of devaluation. The French
have their budget problems in COM
mon with other countries. These are
now being considered. They include
extreme sacrifices by public servants
and taxpayers.
Then there Is the threat to peace
that Germany has just made and the
not improbable overthrow of the pres
ent government IN Austria by the
conditions Abroad will play an I'M
portant part in determining monetary
policies at washington in the next %
days.
At the opening Of the week the index
OF the year. or about one-taird above
the lowest in March. The subsequent
trend has been downward due to the
sharp declines in farm products and
in metals This Is considered in Wash
ington as q temporary setback and one
not to cause disbursement. It cannot
help being unsettling to the peace Of
mind Of the wheat grower. who has to
take so cents a bushel less for his new
crop. or the producer OF copper, who
could make slight profit at 8 cents
pound, but cannot maintain his forces
with the market at 7la cents.
These are perhaps too limited ex-
amples Of recession in the tide OF trade.
There are many inconspicuous signs
pointing to slow but sure recovery. The
fact is that 2,700,000 men have been
returned to industry since March and
that this has added $50 100000 to
weekly pay rolls, in spite Of an un-
precedented amount Of labor distur-
bance throughout the country.
Banks Back r. F. C. Plan.
Opposition to the deposit guarantee
plan on the part of the larger banks is
breaking down; also to the request of
them by the R. F. c. that they expand
their capital structure. The lead IN
this has been taken by the New York
clearing house institutions that vigor-
ously opposed sale OF their preferred
stock or capital notes, but have now
agreed to 1t. This Is another evidence
Of the desire Of constitutionally stand
pat" interests to 60 along with the ad-
ministration and swallow bitter pills in
the hope that they will effect cures that
are desirable. =
Just at this time 1t is good policy
for the New York banks to fall in Ane
with current economic PHILOSOPHY, aS9the
testimony Of AlberrH. Wiggtn OF the
Chase National = Ink has not raised
metropolitan Rs1 ing practice ny pub,
of institpt can charge of
h,n draA - loiIorx IN roynp