Evening star., 1934-10-21
Initiation Furry Subsidies.

Innatl0n flurry SuDSloeS.
The incentive for speculation in
equities" last week was the imitation
aspect given to President Roosevelt's
statement that he was still Of a mind
to raise prices to higher level. This
was followed by the announcement
that another large block Of Fourth
Liberty Loan Al per cent bonds
(s1 1,870, ,000,000) had been called for
redemption April IS, 1885. 1t may
not be altogether logical TO argue that
this refunding program denies the
possibility of further imitation for
events not now anticipated may COM
pei it within the next six months.
The operation is, however, q fair
guarantee of continued conservative
policy in Government financing and
has made its impression in circles
that previously were alarmed over the
outlook for national credit: It also
helps to ease the situation with re-
Spect to the December IS maturities,
amounting to about S1,0o0,000,000,
about which there had been some
anxiety.
Just how far President Roosevelt
will go in his address to the Amer
lean Bankers Association in WASH
ington next week to clarity his finan-
cial policy it is not now possible to
say. His recent conferences with
governors of the Federal Reserve and
with private bankers may have given
him a clearer appreciation of the
banking position and of the part that
the banking world is trying to play
to bring about recovery. American
bankers are still Smarting from the
intimation made in the Presidents
radio talk Of September 80 that they
have been less inclined to assist the
Government in the crisis than were
the British bankers. This was the
''unkindest cut Of all"
Major Market Influence.
AS the occasion and the psychology
of the situation lend themselves to
restatement of financial facts. the
address next Wednesday by President
Roosevelt should be the most i'm
portart of its kind since the budget
message of January. It is likely to
be the major influence surrounding
the investment market Of the week,
for, with the modification Of the
policies of the N. r. A., criticism of
the administration now centers on the
unbalanced budget
Those who are convinced that in
fation cannot be avoided, and are
not converted by the proposed ortho-
dox method of managing the Nations
finances, point to the silver purchases
as inevitably leading to dollar de-
valuation. Under the proclamation
of December 81 last the Treasury
Department was authorized to buy at
least 24,421, 900 ounces of silver annu-
ally, as a minimum. To date it has
taken into the mints about 100000
ounces. It has raised the price Of the
white metal to the highest figure since
April, 1929, causing China this week
to place 10 per cent export tax on
silver bars and coin and starting
complications in the Far East, such
as decline in commodity prices, that
may have serious reactions elsewhere.
Secretary of State Hull maintains
that our silver purchases are manda-
tory, as the United States, under
agreement with the chief producers
of silver, must absorb 70 per cent Of
the total of 35,OO0,000 ounces annu-
ally mined. OF the silver taken in,
SO per cent is to be coined into stand
ard silver dollars.
Commodities Turn Downward.
The turn away from imitation talk
has had a sequel in more weakness
in commodities. For about a month
the commodity price index has been
dropping slowly. To the consumer
this is most conspicuous in certain
food products that had been advanced
because Of reduced supplies and had
reached level where substitutes were
demanded. The gasoline war In the
East is phase Of the breakdown in
the crude oil control.
Fundamentally, the check to rising
prices reflects the falling margin be-
tween income and cost Of living.
Donald Richberg spoke this week os