Evening star., 1934-02-18
TRADING Marrow
! AS WALL Street
AWAITS CONTROL
Reform Concessions May
Be Too Late to Avoid
Drastic Action.
STEADY FLOW OF GOLD
TO U. S. IS CONTINUING
Further Lowering Of Dollars Peg
Anticipated Trade News
Shows Steady Gains.
BY CHARLES +. sPEARE.

BY CHARLES r. SPEARE.
Special Dispatch to The Star.
NEW YORK, February 1.-THE
security markets this week have mar
rowed down. both in volume and In
the spread of fluctuations.
Wall Street has faced some stern
realities In the form of proposed re-
striction of its speculative operations.
These have absorbed Its attention. It
is fighting to preserve its unity and
the most compensating portions Of
its business. It already has, perhaps
too late, made concessions to reforms
that are to be demanded II the
Fletcher report and the bill drawn to
carry out its recommendations are
enacted into law.
Obviously this measure has been
composed in the spirit of revenge
by representatives of those who have
suffered losses. II Is, therefore, un-
fair In certain particulars and carries
the crusade against the New York
financial district to an extreme not
justified by conditions. Undoubtedly
1t will be modified. for, In spite Of
an incensed public opinion, the
Washington authorities recognize that
stock exchanges have a legitimate
place in the business affairs Of a
Nation, and that, while they should
be regulated. they should not be
crushed.
Eleventh Hour Reforms.
Wall Street always has placed un-
due emphasis on the need of q free
market for securities. It has not
been willing to allow any hindrance
to its professional exploits, even
when these bordered ON the type one
might find at the race track or over
the faro table. 1t now comedies that
pools are not what they should be
tent.
Other practices against which per-
sistent complaint has been made for
years are to- be taboo. 1t is. not to
be 50 easy hereafter to operate
market account on a "shoestring."
The Dickinson report on the Stock
Exchange situation, q fairer and more
understanding document than that
Of the Senate Committee, accepted
the fact that the average man has
the gambling instinct. It properly
sought to preserve him against undue
stimulation Of 1t.
The Wall Street banks, which have
loaned on securities more than on
commercial paper, may not be so busy
as In the past. "A larger proportion OF
the buying Of securities viii be for
cash. Bonds and other prime evidence
Of wealth wi1l be sought after.
No one who has followed the history
of Wall Street for the last IS years
expects to see grass growing there
this Summer or next. On the other
hand, there may be q migration Of
those elements who crashed the
Street between 1927 and 1929 and did
not help 1t with its reputation. This
cleansing process would be helpful to-
ward recovery of public good WILL
Gold Flows to U. S.
In no week since last October has
so little been heard Of the Govern-
ment's gold-buying program. Its ma
chinery has been working noiselessly.
The evidence of 1t, however, has been
abundant In the shiploads Of gold de-
posted on American shores. Between
$125 .000, 900 and $50, 600. 900 has been
received this month or Is on the water.
The latter amount approximates the
gold loss of the Bank of France IN
the last fortnight. Now that tie
profit on imports has dppped sharply,
owing to the drawing esther Of ex-
change rates and the doubling of in
suranoe costs, the inward gold move
ment will steadily contract. The next
step may be further lowering of the
dollar price peg.
Taking a survey of business condi-
tions throughout the country, we find
increasing evidence of Improvement.
One of the best barometers is the
weekly statement of electric power out
put. This was liza per cent over the
same period q year ago. Every section
Of the United States showed q gain.
More striking was the rise to Al
per cent of capacity in the iron and
steel production figures. This COM
pared with 81 per cent in November,
80 per cent in December and 81 per
cent in January. The high point OF
the 1888 recovery was So per cent In
July. Railroad earnings for January
are expected to run from to Is per
cent over those Of 1888 and so far in
February are maintaining this degree
of betterment.
Insurance Volume Up.
The volume Of new life insurance
written last month was 8.3 per cent
greater than In January o year ago,
which is evidence of growing conf
dence In the most important Of our
fiduciary institutions and also Of
disposition on the public's part to IN
vest rather than to borrow.
There have been no spectacular I'D.
vances In commodity prices this week,
as the leading staples have been
affected. like securities. by the pro-
posal to limit speculation in them.
However, the general price advance
continues. The commodity average Is
today the highest IN nearly three
years. It has been consistent in its
gain for the last month. This has
caused further rise In living costs,
conspicuously in the wholesale prices
Of foods. Living costs are now higher
than . year ago. but still about ~ per
cent below the level Of this season IN
1929.
Satisfaction may also be felt in the
success Of the most recent offerings
of Treasury notes. The $500 900 900
issue was four times oversubscribed.
Like the January loans, 1t Is quoted