Evening star., 1935-09-08
Business Improvement Held
Not Yet Discounted by
Wall Street.
SMALLER CROP YIELDS
PUSH UP COMMODITIES
Prospects for Railroads Called
Better-Frmer Money Rates
Held Possible.
BY CHARLES F. SPEARE.
,ecial Dispatch to The Star.

NEW YORK, September 7.-Se-
curities and commodities have shown
. disposition to advance this week.
The strength in stocks at intervals
during the period expressed the feel
ing among professionals and Of the
public that the present price level has
not discounted the improvement in
business or the probabilities of infla-
ton.
The highest prices for stocks were
reached after publication Of the letter
Of President Roosevelt. in which he
said the long-sought breathing spell"
for business has now arrived.
In the case Of commodities, smaller
crops and lessened production have
played their part in bringing about
some new high quotations for the
year.
The Italo-E Ethiopian dispute has
been aired before the League of Ma
tions with little satisfaction to the
peace-loving people of the world. and
Italy displayed an obvious intent to
60 ahead regardless Of public opinion
and political or financial conse-
Quences.
One refreshing incident was the
manner in which the Department of
State at Washington dealt with ex-
ecutives Of the Standard-Vacuum Oil
Co. in connection with its oil conces-
sion in Ethiopia. Capital must be
blind II it cannot see in advance the
political implications Of such an ad-
venture or its effect In increasing
those restraints by government against
which it now rebels.
Expansion in Business.
A week broken into by a holiday
again gives proof Of expanding busi-
ness. The most remarkable illustra-
tions are those from the iron and steel
trade and the electric power industry.
The Iron Age states that production
Is still above so per cent of capacity,
which compares with 1874 per cent a
year ago, and that the holidays de-
pressing effect on operations has
proved to be Of short duration"
Figures for the last week of Au-
gust show a gain in electric output of
ll.2 per cent over the corresponding
period q year ago. Once more the
greatest improvement has occurred
in the central industrial district of
the United States.
The aggressive sales movements in
wholesale and retail trade that are
initiated after Labor day are result
ing in a movement of merchandise
considerably larger than in 1894.
There Is every indication Of a busy
Autumn in the building trades.
The effect OF these phases of growth
IN industry. and in the distributing
trades, is clearly evident, at last, on
railroad car loadings. These in the
last week of August were larger than
for any similar period since 1880. Now
about 675,000 cars per week, they may
be expected to reach 100000 loads
during the peak Of the Fall move
ment.
The importance of this on railroad
earnings Is obvious. During the first
seven months of 1885 all that the
carriers could earn on their property
was about ITO per cent,
which compares with 2 per cent in
the unsatisfactory year 1884. 1t Is
reasonable to expect that comparisons
in the remaining months of 1895, with
those in 1884, will be favorable and
that they will be reflected in a more
friendly attitude on the part of invest
ors toward railroad securities.
The drag on the rail group, espe-
cially on the common stock and junior
bond members of it, is the great
amount Of railroad mileage in bank
ruptcy or in receivership and the
delay in bringing out rsorganizations
that would permit the 10 or IL large
systems in complete or partial default
to resume payments. There is little
prospect Of effecting this so long as
such wide differences Of opinion exist
among the various classes of security
holders.
The sooner, therefore, that the In
terstate Commerce Commission and
the courts exercise their rights under
the revised bankruptcy act. the better
will all the interests involved be served
and the earlier will the tone Of the
Nations business be improved.
Treasury Notes in Demand.
The heavy oversubscription this
week for the Treasury 312-year ~
per cent notes served to offset some
Of the unfavorable sentiment created
in Wall Street the week previous by
the partial subscription for the ~ per
cent Federal Farm Mortgage Corp. is
sue and to bring about recovery in
obligations.
1t is yet to be determined how far
holders Of the called Liberty ~ per
cents will accept the offer of ~
per cent bond to replace their present
investment. In this portion of the
'inal refunding operation of the war
oans the Treasury reduced its inter-
,st rate to the extreme minimum per-
nitted by general investment market
This is q questionable
policy.
While there is no perceptible change
In the rate for time money, and bank
deposits and bank reserves are grow
Ing. the extent of the business recov-
.ry and the prospects of future ex-
oansion in industry give sentimental
excuse for an anticipated firming in
oaning rates. This carries consider
able weight with the prospective buyer
Of high-grade securities.
Compared with the best prices Of
the year, United States Treasury long
.erm obligations are down an average
of points and the best of the cor
poration bonds show q decline aver
aging 2k points. At the end of the
week number of the new public
utility and industrial issues that had
suffered q serious decline showed some
signs Of recovery.
(copyrisht 1885. By the North American
TeWsnApoy Alliance, lne.)