Evening star., 1934-10-07
Decline of Staples Linked
With Rapidly Shifting
Foreign Exchanges.
SOME FARM PRODUCTS
DROP 10 TO IL PER CENT
Bearish Crop Reports Are Cited
Along With European Prices
and Pounds Drop.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

SpcCldI OlSpdICA W 1Ac OLdA.
NEW YORK, October 6.-There are
four interesting aspects of the business
and banking situation this week They
concern the radio speech Of President
Roosevelt, the confused movements in
the foreign exchanges, the decline in
staple commodities and the hesitating
attitude of Wall Street, which is un-
able to determine whether it should
go ahead, back up or stand still.
To those who had expected clear
cut statement from the President on
some of the business and financial
policies of the Government, his SUM-
day night address brought disappoint-
ment. Depending considerably on
ones political leanings, the substance
of his talk was conservative in its i'm
plications or lacking in appreciation
of what is needed to lift the handicaps
| from industry. Its failure to deal with
the monetary problem was discourag-
ing IN Wall Street, which expressed
its disappointment in sharp decline
| in common stocks, though later this
| mood was modified and reflected in
the strong market for Government
| securities.
From an unprejudiced viewpoint, the
determination of the administration TO
seek trial period of industrial peace,
and the response subsequently given
to this by both capital and labor,
seems to be the greatest contribution
to the effort for recovery that has
recently been made. President Roose-
welt may fairly ask that a reasonable
| time be devoted Ito experiment with
measures suitable to civilize our indus
trial civilization"
Erratic Markets Linked.
The erratic markets during the week
, in foreign exchange and in commodi-
ties are interrelated. There have been
rumors abroad that the attempt of the
American Government to advance
commodity prices was to be aban-
doned. These we're nurtured in specu-
lative quarters. There is no basis for
| them.
Commodities, however, have been on
the downgrade. OF Is items, includ-
ing cash wheat, corn, oats, sugar, but
ter, eggs, pork. beef. copper, lead, cot
ton, print cloths, rubber, hides and
gasoline, all but three are substantially
lower than in August and September
or in the earlier part of the year, when
metals touched their high point. Some
Of the declines in farm products
amount to 10 to IL per cent
1t is worth noting that, in spite Of
this change in the current of the
commodity markets, there has been no
new demand on the part of the in
f1ationistS for further reduction Of
the gold content of the dollar.
While President Roosevelt failed to
mention the subject of currency stabiI-
ization, there was a vigorous pro-
nouncement on this question the next
day by Neville Chamberlain, chan
cellor of the British exchequer. He
clearly intimated that his government
would do nothing other than maintain
the present independence of sterling;
in other words, the pound would be
allowed to fix its own level. This it
has been doing during the week, when
its decline of 80 cents from the top
quotation of the Summer caused con-
sternation in continental banking and
political circles.
Gold Bloc Menaced.
The French are deeply disturbed.
Well they may be, with a credit crisis
at their door. Belgium is in a critical
cities in default and the government
unstable. The little gold bloc, COM
posed of France, Belgium, Holland and
Switzerland, is facing a hard Winter
All these countries have trade and
unemployment problems to deal with
as well as the more intricate one of
devaluation Of their currencies.
Gold is at record price. There is
a mad scramble to buy it, though it
functions imperfectly nowadays in the
monetary systems of the world. The
desire for it is to put it away in
vaults. The gold standard of the days
before Great Britain abandoned it, is
expected and urged by many who have
been unable to accommodate their
minds to a change in the economy Of
nations. This is as improbable as a
reversion to four cylinder automobiles.
The decline in farm products this
week has been influenced by bearish
crop reports. 1t has also been asso-
ciated with weakness in grains abroad
and with the slump in sterling ex-
change. The latter has affected COM
modities quoted in terms of the dollar.
Retail Trade Expands.
The ending of the textile strike has
been the main factor in expanding
retail trade this week. 1t has like
wise created a stronger demand for
electric power, which shows the best
returns since August. The public
utilities are slowly being taxed out of
a status where they were able to pay
a fair average of dividends.
The August net earnings Of the
railroads were disturbing to those who
hold the equities or the MORTGAGES of
systems failing to cover interest re-
quirements. September prospects are
better, as the car loadings now re-
ported are the largest of the year.
The hearings on the application to
advance freight rates have developed
little new. The promise, however, of
the Reconstruction Finance Corpora
tton to grant loans TO carriers that
have early maturities, and so avoid
further receiverships this year, Is en-
couraging to railroad investors.
The degree of unemployment relief
this Winter will determine the amount
Of new taxation and the extent to
which the national budget may be
brought to balance. It will also play