Evening star., 1934-07-15
BUSINESS SHOWS
IMPROVED TREND
BUT MARKETLAGS
Decline in Stocks Volume
Regarded as Passing
Phase of New Era.
COMMODITY INDEX DOWN
DESPITE DOLLAR POLICY
Price Movements Suggest Failure
of Effort to Lift Levels by
Currency Changes.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK, July I4-If the reck-
oning OF business momentum were TO
DC taken from the Wall Street barom-
eter, the report would be a sorry one.
The grass is not yet growing In front
o fthe Stock Exchange but there may
be cobwebs around some of the trad
ing posts before the end Of Summer.
Transactions in stocks this week
were the smallest in a decade: those
OF Monday only one-twentieth of the
same July day last year This. how
ever, may be regarded as passing
phase OF new order which will even-
tually re-eStabliSh Wall Street in the
confidence OF the American public.
The picture Is more cheerful when
viewed from the standpoint of the
merchant and the manufacturer
There have been a number of notable
and encouraging trade development,
this week. Iron and steel production
which slumped of sharply at the be-
ginning of the month, recovered Al
points and a further gain Is antici-
pated.
The General Motors Corporation
announced the largest June sales OF
cars since 1929 and an increase OF
about 30 per cent for six months over
last year. The General Electric Co.
reported 40 per cent gain in book
ings for the June quarter in compari-
son with the same period of 1893. The
American Telephone d Telegraph Co.
experienced smaller cancellations for
the Summer months than in recent
years but is still much below normal.
which may determine change in the
present liberal dividend policy. Elec-
trlc output continues to exceed that OF
last July though the showing is not
now so promising as in the early
Spring.
Commodity Index Lower.
The Moody index of commodity
prices touched its high point OF about
lag in this week of last year. 1t has
recently been 10 points lower. which
suggests that the effort to raise COM
modities by deValuing the dollar has
not been successful, for this method
has now had sufficient time test.
During the past month the index OF
living costs has varied little from that
OF the month previous. and, according
to the Department OF Labor's survey.
has advanced only / per cent this
year. The drop in rents of from 25
to so per cent in various sections of
the country offsets advances in food.
clothing house furnishings and fuel.
The smallest wheat harvest In 30
years and reduction in other staple
crops will keep the level of food prod
ucts high until shortages are repaired.
Wheat skyrOcketed cents a bushel
within two days of the issuance OF the
Governments harvest predictions, but
did not hold its extreme gains
1t has long been the contention of
the traditionally minded American
banker that the surest and swiftest
road to recovery was along that Of
currency Stabilization and a return TO
the dollar gold standard 1t is nearly
six months since the price of gold was
fixed at S35 an ounce 1t is unlikely
that further change will be made this
Summer; probably not until late in
the Autumn. II then. Consequently.
degree Of currency stabilization has
already been created In this country.
In other words. the banking opinion
here is that we have done our part in
bringing about an international bal
ance in the exchanges and that the
time has come for London and Paris
to fall into line.
The British, however, have recently
rejected a proposal for a fresh study
of their monetary situation which
suggests satisfaction with the present
rate of improvement in trade under
the current rate Of sterling exchange.
The French are not so eocky over
their outlook, in spite Of The large
increase in their gold holdings since
March-to which l05 100000 francs
was added this Week-as they have
social and political problems that are
still acute. Germany is an enigma,
and Austria has been Whirled into
violent strife by Chancellor Dollfuss'
determined drive against NaZi-ism.
Sterilization Benefits Seen.
Currency stabilization is a delicate
subject for international bankers 10
approach and publicly confess d dis
cussion OF it in private. The Basic
visit OF Gov. Harrison of the New
York Federal Reserve Bank has
brought an unwarranted and foolish
attack from Senator Thomas, who
proposes to go the whole length to-
ward infia sion and whose cable reads
like a committee for the Nation uUl-
letin.
A year ago President Roosevelt put
his foot down when the monetary
and economic conference at London
recommended a tentative stabilization
plan. He used good judgment in 50
doing. Now the situation is different.
America has made her experiment
in gold buying and in dollar degalua-
ton. France and the other gold
countries have passed through the
worst OF their crisis There is reason
10 believe that normal improvement
IN domestic and international trade
would follow the adoption of financial
policies that re-establlsh some of he
principles OF banking
It is quite proper, therefore, that the
and the representatives
1f the public accept with good grace
that some OF the old
fashioned methods for curing depres-
sions be used as well as the new kinds
)f physic
1t is clear that the gold experiment
has brought no return in the direc-
ion Of expanding foreign trade.
the totals for the five months
)f this year which cover most Of the
period of the devaluatiOn Of the dol
ar. show up pitiably compared with
hose in the past. Exports are of
35 per cent from the January-May
1gures Of the year previous. They
we're down sharply from those Of 1882.