Evening star., 1935-10-20
WAR TA[KEXERTS
SLIGHT INFLUENCE
ON j. s. MARKETS
Americans Center Attention
on Domestic Situation.
Stocks in Demand.
CORPORATION EARNINGS
CONTINUE TO IMPROVE
Huge Excess Balances Constitute
Problem for Reserve Board.
Jobless Remain.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
, NEW YORK, October 19.-The in
f1uence of arms spending and warlike
tendencies abroad on speculative and
investment sentiment here has not
been important.
Americans are concerned with their
own affairs; more and more they re-
sist any suggestion that they become
parties to European dispute. Stocks
have at intervals been notably strong
in a market whose volume has glad
dened the hearts of brokers.
The demand from the public for
their favorite issues has increased.
Tipsters, who have been ignored for
months, find their predictions eagerly
sought after
1t is a question whether the present
interest in stocks represents response
to more promising earnings by cor
porations or is another of the many
phases, in the past two and half
years, Of hedging against the possi-
bility of credit imitation. If the latter
Is true, how may one explain the fact
Of heavy absorption OF new public
utility refunding bonds at top prices
of the year, the recovery in all of the
direct obligations of the Treasury to
above par and a strengthening along
the entire line Of municipal and cor
poration issues, when imitation is sup
posedly the enemy of this type Of Sc
curitieS?
Excess Reserves Huge.
The excess reserves of the banks are
so huge that they constitute a prob
lem for the Federal Reserve authori-
ties. They have been expanded by the
unexpected gold imports which are
now approaching a total of S400 ,000,-
900 since the movement began six
weeks ago. While there has been some
increase in the. demand for CONNER
cial loans to balance the rise In prices
of many raw materials and to cover
expanding inventories. this has made
but little impression on the vast stores
of unemployed, or sterile, capital in
the banks.
The Anaconda Copper Co. financing
this week was mainly for the purpose
Of nquidating bank loans. So long
as so little new money, representing
the deposits of the public in the banks,
goes into business in the form of pri-
vate loans, will there be a plethoric
condition and a continuation of the
institutional policy of buying Short
term securities at a yield of fraction
of per cent.
Industrial Outlook Better.
Casting up the industrial account as
1t stands today, one finds much for
which to give thanks. The deeply
abused public utility companies are
producing the greatest amount of elec-
trio power in their history. 1t is sig
nificant that the highest percentage
of their gain over a year ago is in the
central portion of the United States,
where manufacturing Is the chief oc-
cupation.
Present indications point to an out
put Of 100000 automobiles in the De-
cember quarter, one of the largest
for the three months in automotive
history. Iron and steel production is
So per cent Of capacity, compared with
23A per cent last year at this date
and 3l.6 per cent in the third week
Of october, 1888. It is expected to
reach 55 per cent during November.
Railroad car loadings just reported
show an increase of Is per cent over
a year ago. Bank clearings are up
more than 20 per cent. Retail sales
this month will run from 10 to Is per
cent over October, 1884, comparing
with an increase in September of
less than 10 per cent. Profits on this
turnover are said to be rising.
Turning to individual companies, we
have the reports this week of the two
great electrical companies, whose nine
months sales ran 20 per cent in ex-
cess of those in 1884, with substantial
improvement in the amount of net
income. The statement of the Ameri-
can Telephone & Telegraph Co. for
the January-September period indi-
Gates gain of about 100000 in the
number of phones used. However,
there must be considerable better
ment in this situation to cover the re-
quirements Of the present 9 per cent
dividend on the outstanding capital
stock Of the corporation. Since 1881,
when a surplus Of slightly over
100000 was earned, the company
has paid from surplus, to its share
holders. approximately $135, 1000 900,
representing the difference between
earnings and disbursements.
The domestic situation would be
more comforting if one were able to
produce substantial facts showing an
improvement in the unemployment
figures. 1t is clear that the efforts to
put men back to work through the
use of Federal funds have not been
successful. The Winter is coming on
with a huge army of those for whom
some form Of relief must be provided.
Seasonal Lull Likely.
The peak in railroad traffic, in
building construction and, probably,
in automobile production, will be
reached in the next go days. After
that, a seasonal lull is likely to occur.
At the same time, a reduction in the
number of those engaged in the vari-
GUS Federal services must be made If
serious measures are taken to bring
the national budget into balance. This
Is the most perplexing problem facing
the administration and one whose So
luton is not now apparent. It is COM
plicated by the rising cost of living
and by such social disturbances as may
develop from the proposed advance in
the price of bread.