Evening star., 1935-11-10
EQUITIES BOOSTED
BY ELECTION NEWS
AND TRADE GAINS
Industrial Stocks at Highest
Levels in Four Years
as Profits Climb.
MOMENTUM QUICKENED
BY UTILITY DECISION
Heavy Industries Continue to Lag.
Consumer Goods Nearly Equal
to Boom Year of 1929.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, November 9.-The
Wall Street contention is that this
weeks breadth and buoyancy OF the
stock market grew out OF the results
of Tuesdays elections in Eastern
States. This is. in part, JUSTIFIED.
But. as stocks have been rising for
over seven months on distinct evl-
dences of business recovery, 1t is more
than likely that the impetus furnished
bv the increased dividend Of the Cen
eral Motors Corp, following earlier
proofs of manufacturing profits IN the
form of larger disbursements to share
holders, had equal effect in lifting the
industrial averages to the highest level
in four years.
The momentum Of the rise was
quickened by the decision OF Fed
eral district judge at Baltimore de-
claring unconstitutional the public
utilities holding company act.
Unemployment Remains.
In spite of the serious unemploy-
ment situation, 1t is no longer ac-
curate to speak of the county as in
a state of depression. Total indus
trial production is about 80 per cent
of the 1926 average and, in con-
sumerS' goods nearly equal to that in
the boom year of 1929 The lag con-
tinues in the heavy industries, though
in these there has been steady gain
for several months.
Output of electric power. one Of the
new barometerS of business activity
and of consumer spending ability, is
higher than ever before Month by
month. retail trade exceeds the totals
of recent years. with Interruptions IN
the upward trend as unreasonable
weather delays purchases of seasonable
goods. Automobile production and
sales at the New York show are ex-
ceeding the expectations of the in
dustry.
Engineering awards last month in
dicated the greatest volume of build
ing construction since October, 1881.
Nearly all the corporations identified
with the building trade have been
making highly favorable reports for
the September quarter. The conf
dence of the iron and steel trade in
developing a broader market for its
products is suggested in the proposed
price advances.
Banking Situation Strong.
The banking situation as a whole is
certainly strong. probably more so
than at any time since the early part
of this century. The Reconstruction
Finance Corp. is taking in more money
from its old borrowers than it is pay
ing out to new ones. Both urban and
farm property are appreciatine in
value, and, as result, greater inclina-
ton is shown by institutional and
private lenders to buy mortgages and
to accept a lower rate of interest
than has prevailed on this type of
paper in 80 years.
The one sore spot in the business
situation Identifies itself with the
railroads. This is a sore that does
not heal. It is true that railroad car
loadings are running we'll ahead of
those at this date in 1884. They have
apparently reached the 1885 peak.
From present indications the net re-
suits in 1886 should better those of the
current period. Even so, the margin
of safety for a considerable sum of
bonded debt is too small to make in
vestment in near railroad capital at
tractive. The private investor hesi-
tates to enter a field over which is
strewn so much wreckage and in
which the prospects for the continued
solvency Of carriers now on the bor-
der-line are none too good.
Utilities Score in Court.
Again contrast may be made be-
tween the prospects of the railroads
and the present achievements of the
utilities. In the week when their
production has reached a new high
water mark, the utilities are given
decision which favors them in the
holding company controversy and
brings much market appreciation to
their securities. The opinion of Fed
eral Judge Coleman may be reversed
by the United States Supreme Court
but the implications of his argument
will meanwhile cheer many anxious
owners of power and light securities.
Discussion of excess bank reserves
carries with it quite naturally the
implication of imitation. There is no
indication. however, that imitation is
any more likely to develop in quarters
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