Evening star., 1934-09-06
TRADE FOLLOWS
SEASONAL PATH
Basic Conditions Improved,
According to Richmond
Reserve Bank.
BY EDWARD C. STONE.

trade during the Summer in the fifth
Reserve district, including Washing
ton, was in the main of seasonal pro-
portions and that basic conditions
have improved There have been
fewer commercial failures than a year
ago and the agricultural outlook is
branded as good"
The Richmond bank says that re-
discounts declined farther during the
past month, at time when early
marketing of agricultural products
creates a need for additional funds in
member banks, but this year banks
have sufficient funds of their own to
finance crop marketing without call
ing on the Reserve bank for assistance.
Circulation of Federal Reserve notes
showed a seasonal rise between the
middle of July and the middle Of Au-
gust, chiefly due to the opening Of
tobacco markets in South Carolina.
Regularly reporting member banks
showed some reduction in their loans
during the past month, and at the
same time reported an increase in de-
posits.
Debts to individual accounts figures
in the banks of leading cities showed
about the customary decrease in the
five weeks ended August Is in COM
parison with the preceding five weeks,
which contained quarterly and semi
annual payments around July l, and
figures for the 1884 five weeks were
1872 per cent larger than figures for
five weeks ended August Is last year.
In agriculture, prospects in the fifth
Reserve district are good this year.
Production of many crops is smaller
than last year, due chiefly to acreage
reduction, but in most cases prices are
sufficiently improved to make smaller
yields more profitable than 1888 yields.
The cotton crop in the the district
Is smaller than last years crop, but
at present prices this years crop will
bring growers more money. The same
applies to the tobacco crop, but to an
even greater degree, early season prices
being nearly twice as high as 1888
prices, the Richmond bank says.
Profits Held Biggest Issue.
In a discussion of the Angas book,
q Washington financier who has been
particularly successful in handling
finances of big corporations made
these timely comments in letter to
@. Bowie Chapman:
''The Angas argument apparently
is based upon the quantity theory of
money. If this theory was ever valid,
1t must have been when metal coin
was the sole medium of exchange,
and before the use of credit in the
financing of business transactions.
while it is true that an ample
supply Of credit and currency Is nec-
essary to business activity, the mere
existence of that supply is by no
means the only thing that is needed
to maintain or raise the price level of
securities or commodities. Two other
essential factors are favorable re-
lation between supply and demand
and the velocity of turnover of credit
and currency. This velocity depends
wholly upon onfidence-confide
that credit andior currency employed
in trade or investment will yield
profits.
People who have money or can
command bank credit at this time,
whether rightly or wrongly, are lack
ing in that confidence. Regardless
of the supply Of money, or the supply
of bank credit, available, no matter
how large, no man will spend his
money or go in debt to bank to
finance a venture, either in trade or
investment or speculation, unless he
has confidence in the profitable OUT
come of that venture.
Maj. AngaS apparently holds the
view that redundancy of credit alone
finally will reach the point of forcing
the purchase of securities and this
will produce higher prices of stocks.
II this were true, such prices should
be much higher now, with call money
at l per cent, than they were in
1929, when interest rates ranged from
per cent to Is per cent.
81 disagree 100 per cent with the
Englishman's idea that the greater
profits will be made by buying rela-
lively worthless securities. The need
for selectivity will continue to be as
great as ever it has been"
Joins Hartman Staff Here.
John P. Bergan, formerly manager
of the Washington Office of Stein Bros.
& Boyce, has become affiliated with the
Washington Office of Hartman & Co.,
as associate manager, according to an
nouncement made today by Ferry K.
Heath, who has been in full charge of
the latter Office. Mr.. Bergan has had
wide experience in the brokerage busi-
ness and has been active in the
financial district here for several
years. He has already assumed his
new duties at the Office at BIS Fiji
teenth street.
The annual Fall dinner of the Edu-
cational Committee of Washington
Chapter, American Institute of Bank
ing, takes place this evening at the
Raleigh Hotel, beginning at $50. The
consuls, officers, committee chairman
and members of the faculty for the
coming year will be present. Educa-
tional plans for the year will be out
lined in detail. The speakers will
include ]. Earle McGeary w. L. San
derson, Robert M. Poole, Paul j. Selt-
ger and Frederick p H Siddons There
are to be no speakers from the ma
tional headquarters this year, the off,
GERS announce.
Continuance of the regular Summer
slump in sales and collections is re-
vealed in the survey of August condi-
ing to the National Association of
Credit Men. The drop from the July
levels, however. is small. Of the
cities reporting in the current survey
II per cent find collections good" rs
per cent find them SLOW and 81 per
cent find them fair"
Capital Transit Higher.
Capital Transit stock sold at 24as
today, an advance of % since trading
in the issue started lase Friday, when
the final sale was made at "a. The
opening sale today was in Washington
Railway & Electric preferred, which
moved at SO fiat. Mergenthaler Limo
type gained half point today, closing
at 22%.
After call, Potomac Electric Power
51a per cent preferred appeared on
the board in four small sales at l11%
The per cent preferred moved at ll2.