Evening star., 1933-09-09
n. R. A. bR|GHTENS
OUTLOOK FOR OIL
Solution of 0verproduction
Problem Stirs Hopes
- on Wall Street. ~.sss.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, September 9 (N,ANA).
Thanks to the Government and the
N. r. A. the outlook for the oil in
dustry Is Frightening.
The code is doing for it what 1t
never could do for itself-at least. it
never has-bringing production into
some semblance Of balance with con-
sumption. The result has been series
of price advances for crude oil and
the prospect is for higher gasoline.
Market operators have attempted to
capitalize this improvement by bidding
up the stocks of the leaders, but so far
! they have not acquired much of
public following.
Statistically the most favorable thing
| about the oils is the way in which con-
! sumption of gasoline has kept up all
! through the depression. Demand was
! higher in the Summer Of 1881 than
ever before and now 1t is not far below
| the peak The oil trade, however, has
been hampered by excessive taxation.
Taking Is companies whose reports
are at hand. 1t is found that they sus-
tanned a net loss of $236763l0 in the
| first quarter of 1888 and a net loss
of s6.143,956 in the second quarter, or
| loss of S29,820. .266 for the half year.
That is heavy handicap under which
70 start the last six months.
Reich Issues Still Weak.
German dollar bonds continue to sag
IN this market. as the corresponding
issues are doing in London. In both
centerS the reason Is the same-distrust
of the ability of Germany to maintain
| a favorable balance Of trade under the
Nazi regime.
The Dawes loan Is and the Young
loan 5 2s are exempt from the restrlc-
tions against transfers imposed by the
German government. But that does not
help their market. The rs in New York
are selling a little better than 60 cents
on the dollar and the 5i2s worse than
40 cents on the dollar. The Is are only
I 7 or points above the years low,
reached in April. and more than IS
points under the high made in January.
The showing Of the 5i2s is similar.
The Berlin market itself does not
seem to be any too confident about the
German outlook. Taking the market
indices made up in Germany. using the
last Saturday in 1927 as the base of
100. the average prices in Berlin now
are 284. against figure for London of
70.l. for Paris of 665. and for New
York of 628 computed in the same
way, The Berlin market has been heavy,
when not actually weak, for some time
Affected by Easy Money.
Strength in Government bonds is the
result of the excessive easy in money.
This. Of course. in turn. IS reflection
Of the Federal Reserve policy of inject
ing credit into a market which has no
use for it. Banks which do not know
where else to use their idle funds are
buying Governments. This ought to
make it a simple matter for the Treas
ury to do whatever financing its pro-
gram calls for
1t is doubtful whether the money Sit
uation will make any difference in the
attitude of the banks toward extending
credit to business, troubled by the in
creased expenses the N. R. A. has
brought.
The banks continue to defend them
selves against criticism by the state
ment that they are only too willing to
make sound" loans but that there is
dearth of sound borrowers. They can
not say. however there is any lack of
ability to lend Taking the Government
into partnership as means of increas-
ing capital is no solution of the con-
troversy
It all boils down to a definition of
soundness. The banking standard Of
1888 is somewhat more vigorous than
that of 1929
Copyright, 1893. bv North American News
paper Alliance, 1nc)