Evening star., 1935-12-01
STOCKSDEPRESSED
BY UNCERTAINTIES
AFTER LONG RISE
War Tension, Fears for
Franc and Technical Fac
tors Bring Recession.
SIGNS OF DISAGREEMENT
ON NEW DEAL WATCHED
Growing Labor Unrest Also Gains
Attention as Spectators Take
Part of Profits.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK, November 30.-The
net average advance in stocks which,
on November 20, was seven points over
the closing figure at the end of Octo-
ber, has been whitfield down in the
last 10 days under the influence of
fear Of devaluation of the French
franc, increasing war tension. and
the opportunism of speculators who
realized the weakened technical state
Of the share list and cashed in on
part Of what they had made.
It is now apparent that industrial
stocks have been discounting the larger
corporation profits and the increased
dividends. Of which there were further
announcements this week, and that
there is more disposition to take into
account, as a market factor, the
numerous signs of disagreement be-
| tween business and the Government
over New Deal legislation; also the
growing strife in the ranks of labor
Suits and counter-suits, in which
the public utility holding companies
are involved, have their bearish as
well as their bullish aspects. The
temper of the delegates to the A. B. A.
Convention in New Orleans has not
aided in establishing harmony between
the administration and an important
arm of the business world. Refusal
Of the American Iron and Steel Insti-
tute to participate in conference in
Washington, looking to industrial CO.
operation, reflects suspicion of motives.
If these are believed to be unfair, it
might be more polite to resist them
openly around the conference table
than to ignore them cavalierly.
Industrial Upturn Continues.
In spite of situation characterized
by the growing militancy of business
toward the administration, the indus
trial position of the country continues
to advance. There are this week the
same favorable reports as heretofore
from both the consumer and the
durable goods trades and on which the
better feeling toward the investment
markets have been predicated.
Every indication suggests that the
most active period In retail distribu-
ton since 1929 is about to be entered.
The most striking change has
occurred among the railroads. In Sep
tember, for the first time during 1885,
they covered their fixed charges. The
surplus earned was $l3,543,000. COM
pared with deficit the year previous
of $1,179,o0. This left them, however,
| with a net loss for nine months of
| s66, ,671 900, or double that for the same
period in 1884. In October the net
operating income promises to be fully
so per cent higher than last year. The
quickened pace in favorable returns
| has continued through November and
| is likely to prevail in December.
| There is the prospect, therefore, Of
income in the final quarter of the year
sufficient to cut down most OF the nine
| months loss and permit the carriers TO
close their books owing less and having
more cash in their treasures than at
any similar period since 1888. The
effect of this has already been wit
messed in the appreciation in market
values of defaulted railroad mortgages
and debentures and tentative plans
for considering the early reorganiza-
ton of roads in receivership since
| 1928.
Devaluation Held Inevitable.
France, so far as her currency sys-
TEN is concerned, is like a cardiac
patient suffering from angina pee
toris. She has severe pains followed
by recovery after rest, and then a
recurrence. The attacks may continue
for long time. Eventually they are
| fatal The devaluation of the franc
and the reformation of the currency
system is inevitable if France is to
place herself in a position to meet
her competitors now of gold.
Her adherence to the gold standard
might have been prolonged, and per-
hapS sustained, had there not de-
veloped serious internal opposition to
the government and had there been no
war between Italy and Ethiopia, with
all of its collateral implications and
the need for increasing cost of arma-
ments. This combination of new
| circumstances Is more than France.
with all of her riches in gold, can
successfully oppose permanently.
Social Security Studied.
One of the most perplexing ques-
tions now facing corporation managers
is the probable future effect on their
income statements of the social Sc
curity bill, which goes into operation
January /, 1887. They are concerned
over it for the following reasons:
Q) The net cost of the taxes by which
the unemployment insurance and old
(Continued on Fourth Page.)