Evening star., 1933-08-20
STOCKS STILL TIED
:: TO WHEAT PRICES
Very Little Progress Made
:. !, IN Freeing big Board"
From Influence.
BY GEORGE T. HUGHES.

Special Dispatch to The Star
NEW YORK. August l9.-The stock
market is attempting to re-establish its
Independence Of the commodity mar
kets and particularly of wheat.
~ Some progress was made on the last
business day of the week but not much.
Stocks were strong when wheat was
advancing and they eased when wheat
did 1t was observed, however, that
the selling in stocks Yesterday, when
wheat in Chicago dropped back to the
limit allowed under the regulations,
was not nearly as urgent as 1t was on
Wednesday, the first day the peg was
removed from wheat quotations.
There was no session of the stock eX-
change today, nor will there be on any
Saturday until after Labor day. Perhaps
the Saturday suspension Will be made
permanent That would be in line with
the tendencies of the day under the
N r. A. dictatorship.
All the trading necessary could be
accomplished in five days as well as
six The objection would come from
the wire houses with a large overhead,
which goes on whether the exchange Is
open or not, but other enterprises have
to put up with shorter hours and higher
costs and there is no reason why brok-
ers should be exempt.
Shorts Are Nervous.
The fact that the exchange was
closed today explains the partial rally
in the last quarter of an hour yester-
day. The market had been selling of
on the decline in wheat. but it came
back before the end because no active
trader wanted to be short over two
day suspension. In that interval some
decision might be reached at Wash
ington with regard to imitation, the an
nonucement of which would give reason
for concern to all shorts.
One of the greatest sustaining forces
In the stock market now Is this same
uncertainty about the intentions OF the
administration with regard to the dollar.
It is believed to be unsafe" not to have
any stocks as insurance against event
ualities"
One question apropos of initiation can
be answered positively without any haz-
ard of contradiction. The question is:
What would be the permanent effect OF
the legal cutting Of the gold content OF
the dollar? The answer is that nobody
knows
1t is fair to assume that the first
effect would be an advance in staples
and in equities but that would be Dc
cause of rush to buy on the part OF
spectators. When the spectators at
tempted to cash their paper profits, the
real test would come and how it would
be- met can only be guessed at.
Already Reduced Abroad.
When one talks about the President
using the authority he has under the
law to reduce the gold value Of the dol
lar, one must not forget that the gold
value of the dollar has already been
reduced in the foreign exchange mark
cts. 1t has been reduced between 25
and 80 per cent, measured by the quo
tations for the French franc or for
other European currencies still tied to
gold
Some of that reduction has already
been reflected in the dollar prices OF
stocks and of commodities. 1t is per-
fectly possible that stabiiization at
reduction of IS or 80 per cent would
affect the domestic price level only tenn
porarily and only unimportantly.
Europe feels more confident that radl-
cal imitation will be resorted to- in the
United States than We do at home The
Financial Times of London, speaking OF