Evening star., 1934-01-28
All Other Factors EcIipsed.
New Loans Financed
in Orthodox Way.
NATIONS DEBT TO PASS
25-BILLION MARK SOON
Devaluation Plan Called Sure Road
to Imitation, Which May Get
Out of Control.
BY CHARLES F. sPEARE.


NEW YORK, January ~ (NAN.A).
The evidence Of confidence in Gov
eminent credit in the large over
subscription to the first $1,000 600, 900
OF proposed Treasury loans exceeds In
influence all other factors of the last
week.
The new issues have been financed
IN the orthodox manner. The rate on
the longer notes was higher than had
been anticipated, which was good
policy at the start Of a program that
involves such a great employment Of
the country's idle funds. Had the
treasury sought to sell its paper at or
below the market, the reception might
have been unfavorable. This would
nave been a handicap to the success
OF future offerings. AS it is, both is
sues are at premium.
The policy of continued emissions of
three-month Treasury bills remains.
The coming weeks series will be larger
than those in the past. The total
Government debt. which has stood
just under 24o0O, 900, 900 for a long
time, will now begin to rise rapidly,
exceeding s25,000,000, 900 early in Feb
ruary.
With some concession to its critics,
the so-called gold bill" has met with
favor IN Congress The three-year stop
placed on the operation of the stabili-
zstlon fund and on dollar devaluation
limits this to what may be regarded
as the maximum term Of the emer-
gency. 1t removes the fear that a per-
manent process Of this sort had been
lacked on to the banking scheme.
Experts Foresee Imitation.
A composite of the views expressed
by economists before the Senate this
week suggests that devaluation will un-
questionably lead to imitation and that
TINS may, in the end, get out OF con-
troll. One Of the advisers of the ad-
mlnlstration even took the view that
1t assured early uncomfortable credit
expansion and hence q great and con-
tnued price rise over a period Of
1t is certain that there has been
more momentum to the price list since
devaluation was decreed. The advance
OF the past month has been striking.
So are textiles. The only CONSPICUOUS
lag has been IN metals.
Wnen We turn to comparison with
quotations of q year ago, we discover
how far back along the road of re-
coVery We have come At the end of
January, 1888, cash wheat was so cents
bushel under the present price; corn
v as rs cents lower; oats had only half
tnelr current market value: flour was
S3.75 barrel against about s6.75 to-
DAY: cotton was lust above 6 cents
a pound and is now about 1II2 cents;
steer scrap was at $8.25 ton compared
with $3.50 ton now; hides were so
per cent below this months figure:
copper metal sold at S cents a pound
against around 812 cents today, and
sllVer was 26 cents an ounce in con-
lraSt 10 the going rate of 44I4 cents.
obviously these revalued commodities
nave created large purchasing power
ana provided the means for liquidating
depts and giving increased employment.
IL is well occasionally, in moments of
Despair, for the business men of the
country to glance back over the situa-
ton in January. 1888, and see how
much better of they are today. A per-
spective that narrows down to a few
weeks or months is likely to give the
wrong focus on events that are shap-
Ing the future destiny of the Nation.
Charts Show Results.
me charts OF industry show more
specifically how the tide is flowing
once december there has been a grad
ual rise. which, however does not vet
compensate to any extent for the de-
cline from August through November.
is needed for the capital in
and steel, for instance.
Operations of the steel producers are
now smaller than few weeks ago, The
rallroads have not taken up the offer
OF the Government to borrow and buy
rails and equipment which they do not
feel they need. There is, on the other
hand, the prospect of as large an out
put OF automobiles next month as in
June last year and of an active Spring
In this branch of business The public
works program moves slowly. Private
building operations are held back by
inability to finance them.
In contrast to these conditions is the
volume Of retail trade, which Is re-
ported as Is to so per cent greater than
year ago, with the outlook for dollar
value in the first quarter of 1884 at
least 20 per cent above this period In
1888. This and other comparisons for
Inc current three months. including car
oad1ngs, electric power output and bank
clearings. should be read in the light of
the events Of a year ago, which were
rapidly leading to the March banking
crisis. - =
The confidence in business recovery.
general acceptance Of the belief that
imitation of the German or French type
Is not probable, various concrete facts
Of improvement to be had from corpo-
ration earnings and dividends and the
stabilized banking situation have to-
gether been an incentive for speculative
and investment interests to enlarg-
their market operations.
Stocks and Bonds Rise.
The average of common stocks this
week was the best since last July. II
was 100 per cent higher than In March
another guide-post along the route
Of recovery-and 80 per cent above the
low October range, which representa-
he end Of the liquidation after the mid
Summer madness
In bonds there has been relatively as
great an appreciation. The average to-
day Is about points higher than three
weeks ago. 1t is Is points over the low
March average of 1888. While most OF
his improvement has occurred in the
second and third grade issues, It Is
significant that nearly all corporation
md municipal credits Of the first rank
have escaped any effect of imitation
hreat Or the possibility of. higher money
Is the Government financing program
In fact, one Of the surpris-
ne things about the market situation
5 its breadth. 1t may be gaining some
advantage from the lack of new Sc
,urity issues which previously at this
'eason Of the year have come into COM
3etition With those outstanding.
Copyright, 1884. BY North American News.
naner Alliance Inc