Evening star., 1933-12-24
CHRISTMAS TRADE
REPORTEDATBEST
LEVEL SINCE 1923
Spirit OF Gloom Swept Away;
Pay Rolls and Released
Deposits Help.
INDUSTRY CONTINUES
UNSEAs0NAL ADVANCE
Aid for Mortgages and Holders Of
Mortgage Certificates Talked
in Coming Year.
BY CHARLES r. SPEARE.
pecial Disnafch to The Star

Special Dispatch to The Star.
NEW YORK, December % CN.A.N.A).
Reports from every direction empha-
size the volume Of Christmas Buying,
some placing it at the greatest since
1928. Several factors are responsible.
First Is the change in the mood Of
the public. A year ago it was fearful
Of the future because Of tlN known
condition Of the banks. This has been
dispelled by the approach of the de-
posit guarantee plan.
Second Is the actual increase in the
buying power in the hands of the
American people by reason of the gain
in employment and the higher ave-
rage wage of those whose work had not
been interrupted during the depression.
Third is the release of large sums
Of money by banks that had been under
restrictions since March or whose
period Of partial service to the public
antedated the moratorium.
A year ago there was a general eX-
pectancy of still harder times ahead.
Now there is a feeling that the turn has
come and that, while money may not
be plentiful in 1894, there will not be
the necessity to live on reserves that
had made SO many cautious in their
spending. The social philosophy of
the Roosevelt administration may be
contested by those who cannot adjust
their minds to it. 1t certainly has eX-
travagant features. 1t has, however,
developed a new and healthier psy-
chology among the mass of the people.
Industrial Gains Unseasonal.
The major industries exhibit an i'm
pr0Velnent that Is contrary TO the sea-
SON. This is a proof of fundamental
gains in a direction that has been
slow to respond to recovery mechani-
cally or naturally inspired. The iron
and steel ratio Of production has again
risen sharply to the figure of 36 per
cent Of capacity, comparing with 80 per
cent at the end at october, when the
drop from the high August ratio Of
about SIS per cent was taking place.
Power and light production does not
satisfy those in the industry, though it
holds over per cent above the level
of last December. Many of the rail-
roads are moving more revenue cars of
freight than at the end of 1882. The
building outlook is better but greatly
restricted by the mortgage situation,
itself slowly feeling the benefits of
widening areas of employment.
For the last two years the R. F. c.
has been centering its efforts on the
OdAc, l1lC DdI1ho dIIO lllldIlIldl Ill
stitutions and other Government agen-
farmers, providing more profits from
their crops and helping them to save
their homes
Mortgages Need Aid.
1t is not unlikely that during 1894
aid from these same sources will be
given to distressed mortgages and
holders of guaranteed mortgage certi-
flcates whose plight, in many cases, is
more serious than that of those al
ready relieved. If the figure of S10,-
000.o0o,000 in outstanding mortgage
certificates is a correct one, then S.
000,000,000 represents the depreciation
that holders have already suffered, in
addition to their loss of income. The
remaining equity is important enough
to try to preserve.
The same is true of the investment
that institutions and individuals have
made in the past 20 years in municipal
bonds. The total par value of NUM-
cipal debt is $4,000, 900, 900. The
greater part Of municipal securities out
standing are today without a market.
Bids for them are nominal often at
less than half the original cost price
Here is another situation to which
attention must be given next year. 1t
is companion of that in real estate.
Both are domestic matters and there
fore may be approached sympathetic
cally by those who believe in short
shift for the holders of foreign dol
lar investments whose position was
bad enough from the defaults of South
and Central American countries and Is
now made worse by the steady refusal
Of CrRrrnanV fn meet fIlll infaraSt
ments in cash.
Necessity Questioned.
When one considers all of the de-
probation that has taken place in the
important groups of American and for
eign investments, one is inclined to
question the necessity for further ad-
justment in the dollar value in order
to lift the burden of debtors. The
meaning of the $500, 900 900 which the
r. F. c. has advanced to the banks
on collateral and the 81 000,000,000 or
more that it proposes to lend them in
the form Of preferred stock or capital
notes Is that this sum represents part
Of the depreciation in their investments
or In commercial loans which is now to
be absorbed into a new capital struc-
ture
Not small part of this depreciation,
which has "develued" the portfolios of
the banks, is due to the way in which
debtors have violated their contracts
to pay and the increasing popularity
of this procedure since the United
States repudiated her own gold agree
ments.
The most significant incident of a
rather routine week is the proposal Of
the railroad labor organizations that,
in the future, railroad financing shall
be done by a corporation controlled by
the Government. This not only dis
poses OF necessity for a capital market
Tor railroad securities supported by the
public, but means nothing less than
the writing of the first chapter in
Government ownership of the steam
carriers. 1t would scale debt with
vengeance. II Is another Of the revo-
lutionary changes in business practice
and in the shifting Of national wealth
that will distinguish the incoming year.
(Copyright, 1893. by North American News
p@per Alliance, Inc.)