Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-12-02
Stocks Average Records
Largest Monthly Rise
Since January.
JOBS PROBLEM REMAINS
IN INDUSTRIAL EAST
Lag in Durable Goods" Holds
Attention - Excess Bank Re-
serves Near 81, 100000, 900.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, December TRAINED
observers in the field of business sta
tistics find that a departure from the
unsatisfactory conditions in Septem-
Der and in October dates from the
November election. The sentimental
change, or the improvement in atti-
tude, is reflected most directly in the
market for securities
In November the average of stocks
enjoyed the largest gain since jan
uary. This week the average Of high
grade bonds broke through the upper
ground reached in July Municipal
loans have likewise moved up.
1t would be normal for iron and
steel production to decline at this
season of the year. Actually. it has
expanded. The uplift in the price Of
farm products is reflected in the larg-
est distribution Of merchandise by one
mail order house since 1929. Bank
| clearings are running well over this
period in 1888.
Except for the tier of States on the
North Atlantic Seaboard, the evidences
Of fair degree of commercial activity
are many. The problem is to create
employment in this industrialized sec
ton of the United States; in other
words, to stimulate the durable
goods" trades.
Bank Reserves Pile Up.
Money is abundant. The excess re-
serves Of the banks are approaching
81. 1000 900 900, one of the largest
amounts on record. So difficult is it
to find satisfactory employment for
idle funds that some interior banks
are refusing deposits
There still is conflict of opinion in
Washington over the amount of effort
that lending institutions are making
to put their money to good use. Few.
however, will subscribe to the philoso-
ply of Secretary Ickes that the Gov
eminent should finance building at
his prescribed low interest rate. II
the housing program is given fair
chance, it will steadily lead to more
employment of men and of capital.
The chairman of the largest bank in
the country stated this week that al
ready it has created the best demand
for ready money in many months.
The composite opinion that one gets
| from talking with bankers, merchants,
executives Of railroads and Of public
utilities and with seasoned Wall Street
brokers is that there is a better pros
pect for recovery now than when pre-
viously 1t appeared to have arrived.
In this conclusion the time element is
an important factor.
A f1ve-year period Of depression
since the first panic in stocks. and OF
five and a half years from the be-
ginning of the downward trend in
business, cures many Of the causes
of this depression, as long rest re-
lieves a prolonged physical fatigue.
Consequently, the effort in behalf OF
recovery, whether or not it is artifi-
cially stimulated, now has better
chance to succeed than while liqui-
dalton was going on and the defation
era had not ended. This also assists
the administration in combating the
demands for further imitation, as, in
the presence of recovery, the argu-
ment for another advance in the price
of gold is specious.
Treasury Credit Strengthened.
If this were not enough, the neces-
sity on the part of the Treasury in
negotiating a large refunding oper-
alton next April compels it to adhere
closely to orthodox monetary pro-
cedure. 1t has helped its credit this
week by the announcement that only
necessary financing would be under
taken December Is. The 1892 100000
of Treasury 214 per cent maturing
certificates are quite likely to be
snapped for others of like character
but at lower rate of interest. If the
institutions that hold them are will
ing to purchase commonwealth Of
Massachusetts, eight-year bonds on a
2 per cent basis. they should not re-
fuse a short Treasury note at an
equivalent yield.
The policy of the Government to-
ward the budget, toward expenditures
for relief and in regard to the SOL
diers' bonus are the main unknown
quantities in the recovery situation.
No one supposes that President
Roosevelt in his budget message in
January will announce an early ball
ancing of receipts and expenditures.
On the other hand, there is evidence
that stricter accounting in relief
expenses is being made and that the
day of liberal grants of Government
money to all who apply is over.
The bonus issue has gained favor
with members of Congress who
formerly opposed it. and a recent
count Of votes indicates it could sue
coed over a presidential veto. What
ever direction the method to meet
payment may take. 1t would tempo
rarily compromise the program Of the
Treasury and add to its refunding
problem.
Gold Influx Continues.
There were no new developments
this week in the foreign currency
situation. Gold continues to pour
into the United States. Since the
movement began in November s140,-
bloc countries. Americas October
export trade, amounting to $206, 000,-
900, was the largest since April. 1881.
The trade balance for the month APP
proximated $77,o00,000. In Septem-
Der 1t was s60,000,000.
There is no way for the debtor
countries to pay except in gold. While
we are congratulating ourselves over
the expansion Of our merchandise
shipments to European nations we
are making 1t more diff1cult for them
to promote sterilization. So it be-
comes more apparent that the tenure
of the gold bloc is brief. ALI present
indications mint In a break-lln of IL