Evening star., 1933-11-12
Dollar Hits Lowest Levels
Recorded Since Civil
War Period.
RECOVERY is CONTINUING
DESPITE UNCERTAINTIES
Industrial Expansion Foreseen I'm
der Public Works and Jobless
Relief Programs.
BY CHARLES r. sPEARE.

Special Dispatch TO The Star
NEW YORK. November 1.-THE pat
tern of the markets this week has been
that of last Summer, though drawn to
smaller scale. Markets have moved in
! orthodox fashion. common stocks rising,
commodities strong, and high-grade
securities, notably United States Gov
ernment loans, under pressure.
The dollar has declined sharply.
Those who have taken the trouble to
| look back to the pages of financial his
tory find that it is lower than since the
specie suspension period after the
Civil War Sterling has risen many
points above its old parity. 1t Is now
higher than since 1914. French ex-
change has pushed further ahead.
More gold has been transferred from
Paris to London. There has as yet
been no indication that England and
France are taking measures to protect
their currencies against the fan in the
dollar
With the dollar approaching 40 per
cent discount in terms Of gold. there IS
a strong demand for early stabilization.
for confidence in the American currency
Is rapidly failing. 1t is felt that the
readjustment in values has been sufti-
cient and that the business world can
not be expected to make its normal
commitments with the dollar fiuctuatlng
SO widely from day to day.
Exploring New Field.
All in business ask the same question:
oWhither are we bound?" No one can
give a clear answer. Not in our life
time have business men been so be-
wildered. II Is only because our re-.
sources are so great and commence OF
the people in President Roosevelt con-
tinues strong that progress toward re-
covery goes on in spite Of the upheavai
in currencies. 1t is not improbable, too,
that the willingness to explore new
field In the world of money may be
phase of the social and political revolt
that has been expressed in this weeks
elections and that the mass OF the
people are not alarmed by trends that
keep economists, bankers and indus
trialists on the anxious seat II is GER
tain that much of what Is being done
on a grand scale is to suppress uprisings
arlcs.to anticipate demands that may
come from Congress in January.
The response of the COMMONLY price
index to the fall in the dollar has SO
far been insignificant. Taking the
moody measure 1t will be found that the
index this week was still well below that
of a month ago. 1t is about l5 per cent
lower than in July. But 1t is so per
cent higher than in November. 1882
This accounts for the more satisfactory
farm income return, which Secretary
Wallace expects to be 20 per cent more
between August and December than IN
the same period Of last year
There are conflicting statistics con-
cerning the trend of living costs. Ac-
cording to the National Industrial Con-
ference Board the rise in this index last
month was a nominal one. 1t will be
more pronounced this month, however.
The last bulletin of the American FED
Grafton of Labor emphasizes the unfair
position of the worker, whose per
cent increase in wages has been swal-
lowed up in an 8l2 per cent advance In
what he buys. There is more evidence
that the retail purchases OF organized
labor are expanding, while the sales OF
the mail order houses in the agricul-
tural districts are said to be 25 per cent
over last year, due to the millions OF
dollars that have been paid out or are
to be paid to farmers who make re-
quired adjustments in production" OF
wheat. corn, cotton, tobacco and hogs.
In spite of these adjustments, the No
vember Government report indicates a
cotton crop in excess of 100000 bales.
Trade Situation Promising.
The business index appears to have
struck a point of resistance to the de-
cline that set in last August and has
robbed it of half of its previous gain.
This in spite of the drop to 25 per cent
of capacity in the iron and steel trade
and the smallest increase In electric
power production in six months.
There is a growing tendency among
corporation managers to distribute more
Of their profits to their shareholders
Two notable examples of this during
the week are the General Motors Cor
poration and Socony-Vacuum Oil. Sew
eral other less important payments have
been announced The dividend index
has changed little since last May in
spite of the inroads made meanwhile
into the disbursement on public utility
stocks and those of financial companies.
There is reason to hope for expan-
! sion in industry under the impetus OF
the many Government programs for
public works and unemployment relief
now beginning to function.
1t is mainly from public works Of a
Federal character that the greatest
amount of business expansion will come
this Winter. This. of course, involves
more and more Government loans to
supplement those already appropriated
for relief. 1t is the unlimited supply of
such loans and their effect on Govern
ment credit that is having quite as
much to do with the latest phase of
Liquidation of Treasury issues as the
fear of currency imitation and the fight
of the dollar. This is all in the line
Of diluting Government credit.
The declines suggest that the nearby
/ cost of additional Treasury financing
may be hirher and that further refund
ing of the fourth Liberty loan 414s may
have to be deferred in spite of the Gov
ernments proposal to go on with it.
About IS per cent of the national
debt is held by the banks, which, in or
der to increase their lquidity, have
greatly expanded their investment in
Government paper during the depres-
sion period. There has been a tendency
| during this latest phase Of imitation to
transfer some of this investment into
sterling and Canadian securities.