Evening star., 1934-07-22
Labor Troubles Temporary.
but Nature Assumes
Crops Control.
PRICE CUTS STIMULATE
CONSUMERS PURCHASES
Retail Total for Half Year Re-
ported 400 Millions Higher Than
for 1888 Period.
BY CHARLES F. SPEARE.
Special DISPATCH TO The Star.

Special Dispatch TO The Star.
NEW YORK, July 2l.--The main
influences in the future contraction
in business this week and in another
rise in commodity prices were the
extension and severity of the drought
and the general strike in San Fran
cisco.
There is no human control over
the drought. 1t may continue to re-
duce the national income and in
crease the problems of relief. The
strike on the West Coast was bound
to be temporary, for the public and
Government will never tolerate an at
tempt by either side In an industrial
controversy to penalize the 90 per
cent who are made to suffer in order
to gain advantages for the interested
10 per cent. The labor outbreaks In
the South and Northwest are of
different character, though in all in
cidents OF the sort this year the au-
thorities have had TO deal with
new and radical element.
The drought news was most serious
from the corn and cotton States.
Consequently, reports from the Fed
West and Southwest were colored by
1t. Corn and cotton touched the
highest prices of the season. Wheat
was at the top figure of the month,
The general commodity index reached
the best average of the year and is
only few points below that Of last
July.
Although iron and steel production
this week is again rising, the unfa-
vorable comparisons made by car
loadings and electric and lumber out
put have tended to set back the busl-
ness index to the January-February
level and decidedly below that of the
March-April period.
Consumers Spend More.
1t is an interesting fact that, while
the commodity price index has been
rising this month, there has been a
decline in retail prices. This has
helped to expand retail buying. II Is
estimated that consumers spent
50. 100, ,000, 900 for general merchandise
in the first six months of 1884, or
$400, 900 900 more than In the same
period Of 1888. There is an insistent
demand for more recognition of the
consumers position. We find this
being given, for illustration, in this
weeks N. r. A. order Of an to 10
per cent reduction in lumber prices,
which may save the private individual
nearly is per cent In his building
costs. incidentally, the building in
dustry last month had a sharp de-
cline from May owing to the dis
couragement of those faced with esti-
mates that made construction pro-
hibitive
In speculative bonds this week there
has been some response to the oc-
casional weakness in stocks. On the
other hand, quality obligations have
held close to their high average of
the year.
The attitude of Germany toward
guarantees nominated in the bond"
is not unlike that adopted by Mexico
and viii soon destroy all future hope
OF her obtaining credit abroad.
The market price average and the
low state OF trading indicate that the
public is not buying stocks. Why2
These are the primary reasons: First,
stocks do not appear attractive from
LAlC Va lllkQAAlC JtCld VI
mediate appreciation. Second, those
interests that sponsor speculation are
today taking a passive attitude. so
there is no leadership Of the old per-
suasive and intriguing kind to tempt
the outsider, and third, there is too
much uncertainty in business and in
currency matters ahead to justify
commitments on the long side Of the
market.
Course of Stock Prices.
After the March, 1888, banking
crisis common stocks advanced an
average Of about 100 per cent. They
touched their high point a year ago.
Subsequently, they declined an aver
age of nearly 30 points, rose last Feb
ruary to approximately the best OF
the previous July and are now is per
cent off from the top.
1t has been generally admitted that
the prices of last Summer were not
justified by conditions, present or
prospective. 1t has been shown that
approximately 81 per cent of the 120,-
900 900 shares dealt in in July. 1888,
were for the personal account Of
members of the New York Stock Ex-
change and that they represented the
worst variety Of manipulation. They
discredited Wall Street and were re-
sponsible for much of the bitterness
against 1t in the Senate investigation.
However, the average price of stocks
this month has not been SO far away
from that of last July. Admittedly
conditions are better than they were
then, earnings higher and dividends
larger. but there has also been devel-
oping a set of circumstances which
promise to reduce corporation profits
and which make for increased timidity
on the part of those who have fos-
tered In the past and are likely in
the future to foster, the public inter-
est in equities"
The disparity between prices for
stocks and earnings per share is not
so great as it was few months ago;
yet enough to take the edge of ma
iority of speculative situations sug-
gested by those who would have their
clients become more active. The re-
turn of corporations to a dividend
basis is slow. Payments by the rail-
roads, for instance, are $500 ,000. 900
per annum less than in 1929-30
Quite frequently the dividends of pub
lie utility companies are being reduced
or passed.
Yields at Low Level
In the conspicuously active indus
trial fields in recent months-those of
automobile manufacture, chemical
production and the output Of iron and
steel-there has been comparatively
little Of the new profit made available
10 shareholders. One per cent motor
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