Evening star., 1934-10-06
OUTLOOK BETTER
FOR WALL STREET
Retail Trade, Rally in U. S.
Bonds and N. R. A. Plans
Arouse Hopes.
BY GEORGE T. HUGHES.

Special Dispatch to The Star.
NEW YORK, October 6.-There Is
no disgusting the better feeling in
the financial district, not alone
toward the markets, but toward the
business situation. At the same time,
it Is difficult to assign convincing
reasons for the change in attitude.
Perhaps it would be better to say
that Wall Street is regaining meas
ure of that confidence. which business
is said to lack and which the Presi-
dent is implored to create.
There are, however, some things
that have contributed to this end.
One of them is the rally In Govern
ment bonds, dissipating, for the
present at least, the fear of an un-
controlled imitation. Another is the
belief that under the reorganized
N. R. A, business will be freed of
the shackles which has held it back
so long. Then the undeniable i'm
provement in retail trade is making
an impression. The gains in sales re-
ported by leading distributors are not
to be laughed off," as the saying Is.
Stocks Fairly Steady.
From the technical standpoint. the
action Of the stock market has been
more than encouraging, in the face
of acute weakness in commodities and
the panicky selling Of securities Of
corporations domiciled or doing a
| large part of their business in Cali
fornia.
The general list has held steady all
through the unsettlement in individ-
ual issues and groups. Friday there
was a sharp increase in volume when
prices were rising.
Finally. although the margin regu-
lations are so complicated that hard
ly any one processes to understand
them, the fact is that they are in
effect Just as liberal as those fixed
by the Stock Exchange itself. There
is no reason for fear that the restora-
ton of an active market will be pre-
vented on that score.
The real criticism of the margin
rules is the necessity of two computa-
llOIlo W dSSCIIcA NllCl41Cl VI 1lOb .
given account is properly margined.
Wallace Views Studied.
Secretary Wallace is quoted as Of
the opinion that the Chicago price
of wheat should be allowed to sink
to the Liverpool level 1t is hard to
see just why that should be when
the United States has turned from an
exporting nation to one with an
inadequate supply of wheat for its
own use.
II is interesting, nevertheless, TO
compare the two price levels, Chicago
and Liverpool, and see what readjust-
ment would be necessary to bring the
two into line. On October /. before
the present reaction got well under
way. wheat for December delivery sold
at 81 bushel in Chicago. while the
corresponding price in Liverpool was
80 cents bushel. Shipping costs from
Chicago to Liverpool are about 10
| cents. so that on the Liverpool basis
( Chicago ought to be selling at 10
cents-a decline drastic enough to
satisfy the most aggressive bear.
! This relation has been maintained
! for long time, effectively preventing
exports from the United States, even
/ when there was a surplus to export
! If it is TO be remedied now. hard times
are ahead for the wheat bulls.
Speculation Hazardous.
Looking at the matter the other
way around, the Buenos Aires price
as of October l was about SO cents
bushel. Shipping costs from
/ Buenos Aires to New York are about
8 cents. to which must be added the
/ duty OF AZ cents a bIshel A Chi
I cago price of about sl.l0 would there
/ fore be around the limit on the side
/ of advance before imports were
/ threatened. In this case also there
I has been little consistency in the re-
/ lation between the prices in the two
/ markets
The only conclusion justified under
| present circumstances is that specu-
lation, either for the advance or for
/ the decline. carries more than the
usual hazard
/ Copyright 1894. BY the North American
Newspaper Alliance. Inc)