Evening star., 1933-08-18
WHEAT FORECASTS
IMITATION ACTION
Dollars Weakness Is Taken
Also as Sign That Federal
Action Is Due.
BY GEORGE T. HUGHES.

Special Dispatch to The Star.
NEW YORK, August 18.-It was the
break in wheat that put the stock
market down Wednesday and it was the
recovery in wheat that brought about
the rally in stocks yesterday.
For the moment the share list is de-
pendent for guidance on commodities
and particularly on wheat, but that is
not the whole story.
The price of wheat is important but
it is not the controlling influence in
establishing values for equities as a
whole. 1t is simply that the stock
market regards the wheat situation as
rejecting the probabilities of new in
f1adonary measures on the part of the
administration.
The reasoning is that Washington
cannot afford to let its recovery pro-
gram be imperiled at this stage by a
decline in commodities, and, if no other
measures suffice, initiation must be re-
sorted to. So it came about that yes
terdays abrupt change in the wheat
market was interpreted as forecasting
Government interference.
Dollar Weakens.
The belief that an important move
was in prospect was strengthened by
the weakening of the dollar in terms Of
sterling. Up to yesterday the dollar had
been exhibiting pronounced strength
against the British pound and the
European gold currencies. The foreign
exchanges. however, reversed their
trend along with wheat, cotton and
stocks.
The speculative element in Wall
Street hopes for imitation; the conserva-
tive interest fears it. Both sides are
apprehensive in turn but all they have
Oh which to base their hopes or fears,
as the case may be, is the action of the
markets
So far as anything definite can be
had from Washington, it is that Moth
ing will be done now. That hint, for it
is no more than a hint, does not sat-
isfy either party, and all day long ru-
morS and denlalS of rumors follow each
other from one end of the financial
district to the other.
At the opening yesterday the Dow
Jones industrial averages stood at a
new high for August, having broken
through the resistance point of a week
ago. The rails and the utilities, how
ever, still were below the top of Tues
day week ago. That makes the action
OF the last two groups significant in the
eyes OF the chart readers today.
Dividend News Offset.
Omission of the dividend on United
Corporation common had no disturbing
effect on the utility stocks II was offset
as a market influence by the news that
the Governor of New York had failed
OF legislative support in his campaign to
force a reduction Of rates to customers
of the utilities in this State. 1t was
taken to indicate change of sentiment
toward the utilities on the part of the
public.
This view received support from the
attitude of the chairman of the Con-
necticut Public Utilities Commission,
who was quoted as saying that utilities
under the jurisdiction of that State
would be allowed to pass on to the con-
Sumer any increase in operating costs
caused by the application of the Edison
Electric Institute and American Gas
Association codes. Whether the Federal
authorities will take a similar attitude
is. in doubt
United Corporation has large stock
holdings in United Gas Improvement,
Niaraga- Hudson Power, Public Service
OF New Jersey, Commonwealth g. South
ern and Consolidated Gas. 1t is a
holding company operated on an invest
ment and not trading basis. Its in
come from dividends on the stocks it
carries has been sharply reduced, the
latest cut having been that of the dis
burSement on the common stock of
Nlagara-HudSOn Power. and omission
OF its own dividend was the natural
consequence
Utility Report Issued.
National Power g. Light gave out YES
terday its financial statement as of
March 81, which was. of course, lust
after the banking holidays At that
date all current liabilities, including the
preferred stock dividend payable May
l, totaled only S548 SAG and against
these there were demand deposits in
banks of S6,859,845 and time deposits
of S5,350000. besides United States
Government securities of S1311 SOL. and
State, municipal and other short-term
securities of S1.l94664. Neither Ma
tional Power & Light nor any subsidiary
has any bank loans. The balance sheet
accompanies the annual report for 1882.
Brokers loans increased the nominal
amount of $4,000 900 during the week
ending August 16. The market de-
tluleu ouIllS ILLS ptTlOO. Dut Ine TOTAL,
which now stands at 1894, 1000, 900, is
not excessive
The Stock Exchange monthly bulletin,
just published, however, makes the ratio
of member loans to market value of all
listed shares as of August l to be $50
per cent. which is not only the highest
of the year. but higher than at any
time last year.
The inference is inescapable that
public participation in stock speculation
is on the increase
Copyright, 1893. by North American News
paper Alliance, Incl