Evening star., 1934-08-12
Decline of u. S. Issues
Accelerated by Foreign
Exchange Market.
CURRENCY SPECULATION
IN PARIS is FACTOR
New York Circles Doubt That Sill.
yer Plans Will Bring More
Imitation Soon.
BY CLAUDE A. JAEGER,
Associated Press Financial Editor


NEW YORK, August l1.-Not since
last November have the financial mar
kets seen such an inflationary furry
Of selling Of dollars and bonds and
buying Of commodities and equities
as this week.
The Governments grain crop esti-
mates, together with general rains
over the drought areas, tended 10 de-
fate the rise in staples at the end OF
the week. The imitation fervor did
not at any time seem 10 take q very
f1rm grip on the stock market, but
1t sent the dollar down and helped
to send u. s. Government and other
high-grade bonds into the sharpest
decline since November.
Last November 1t was the r. +. C.'s
gold-buying and price, fixing pro-
gram. This time it was silver. The
announcement of the naturalization
Of the white metal on Thursday came
when drought damage 10 corn, and
the Governments first estimate of
the cotton crop, already had the
commodity markets rising, and specu-
lators we're quick 10 interpret It as
inflationary. Wall Street banking au-
thorities and monetary experts said
that In itself, however, the silver ma
tionalization and the printing Of sill
yer certificates as outlined at the
Treasury, was unlikely TO make any
important change In the volume OF
currency In circulation. at least in
the near future.
Lowest Since Autumn.
But foreign exchange SPECTATORS.
particularly in Paris, actively sold the
dollar, sending 1t to the lowest level
In relation to the gold currencies since
last Autumn, and considerable selling
OF U. 8. Government bonds developed.
The Federal issues, however. were in
duenced by a variety Of factors, and
had started downward before the new
silver moves had even been rumored.
Among other things, dealers and in
vestors. seeing the Treasury issues
touch about the highest prices of a
generation q few weeks ago, wondered
II they were not getting too high.
Then In the past fortnight the Treas
ury put out its guaranteed issues of
farm mortgage and home owners loan
bonds on a rather wobbly market, and
they Gid not 60 very well. Further
more, as the drought damage spread
1t became apparent that Government
relief expenditures would be consider
ably larger than anticipated. And
after silver took the headlines selling
of the Treasures became the heaviest
in long time.
Corporate bonds also sMmped, par
ticularly rails, as traders took an ad-
verse view Of the carrier outlook, what
with reduced crops to haul, fixed rates
and costs rising. The Standard Sta
tistics Co. price index OF so corporate
bonds dropped two full points for the
week to 82.6. The years high, touched
in April, was 88.l, level reached In
an advance from a January low Of
TAB.
Metal Shares Rise.
Non-ferrous metals made the best
headway in stocks, but several other
divisions ranged higher at the close Of
the week. The price index Of 90
issues showed gain Of 1.s points, at
I'LL.
Sensitive commodity price indices
reached the best levels in about three
years. Cotton touched the highest in
four. Despite reaction on Friday
and Saturday, cotton futures showed
gains for the week Of around 50 q
bale. A scent drop in wheat today
about Cancelled its earlier rise, and 1t
finished approximately unchanged
from a week earlier. Corn, however,
was stin up nearly 4 cents for the
week.
The bar silver price at New York
was fixed at 49% cents, up az cents
from a week ago and Just under the
naturalization price Of 50.01 cents.