Evening star., 1935-03-31
Uncertainties on Domestic
Industrial and Labor
Fronts Increase.
SIGNIFICANCE OF GAIN
IN MARKET UNCERTAIN
Factors May Have Been Discount
ed Previously-New Financing
Brings Ray of Hope.
BY J. G. DONLEY.


NEW YORK, March 30-In q week
which has produced increasing cloudi-
ness upon the domestic labor,
European military, international ex-
change and domestic industrial fronts
It seems strange to report some bright
ening on the domestic financial front.
For the first time since the decisions
in the gold clause cases were handed
down by the Supreme Court, late in
February, stock market averages have
scored two-point rally. In fact, the
rally has amounted to three points
in the general average of so stocks,
composed of equal numbers Of indus
trials and rails. The previous unin-
terrupted decline in this average from
the peak reached following the decis-
ions had amounted to IL points. or
something more than IL per cent from
the top of SO.
1t is still too early to say whether
there may be any lasting significance
in this action of the speculative mar
kets. But at least 1t points to the
existence of some support and may
suggest that the market, as 1t quite
often does, has worked itself into a
position where it has largely dis
counted some Of the unsettling infiu-
ences which are worrying industrial,
trade and Government leaders.
Capital Market Astir.
There is also a ray Of hope in
indications that the recent reopening
of the capital issues market Is some
thing more than q fash In the pan.
Financing announced or put under
way in the last week is expected to
top S150,000,000. This IS the largest
total for any week since the passage
of the securities act Of 1933-in fact,
since June, 193l-and 1t is calculated
to bring not only some long-needed
income but also renewed courage to
investment Arms. =
Most Of the financing now being
done, of course. represents refunding
Of old obligations at lower interest
rates, rather than the raising OF new
capital But in the past, refunding
has always paved the way for new
financing.
But the stock markets temporary
turn and the greater investment mar
ket activity are but straws in the wind
of current events, which, unfortu-
nately, seems to be blowing most
persistently in the direction opposite
to recovery.
The foreign exchange situation,
long held to some semblance Of order
by the seeming integrity of the gold
bloc, has gone completely crazy quilt"
with Belglum's detection.
What the final outcome will be no
one can now say. But it is obvious
! that the immediate result will be q
further disruption of international
trade. with perhaps a temporary ad-
| vantage for Belgium. Only ultimate
stabiliZation will remove the maze of
quotas, tariffs and two-party agree
ments between nations which now
throttles world commerce.
Labor Situation Troubled.
The most unSettling influences at
home are the threats of labor trouble
on four important industrial fronts
soft coal, automobile, rubber and tex
tile. In this situation the concession
recently made to organized labor,
whereby it now has equal representa-
ton with industry on the National
Industrial Recovery Board, may have
some bearing upon the final outcome.
For Federal Intervention in the most
threatening labor situation, growing out
of the inability to arrive at new wage
agreements to become effective April
in the soft coal industry, has taken
the N. I. r. B.
At bottom great deal Of the labor
unrest grows out of planned econ
omy'' which. being opposed to tradi-
tional individual economy on the side
Of labor as well as on the side Of en-
ployerS, has not worked out very well.
And the present difficulties on both
sides are aggravated by uncertainty as
to the future of this planned econ
omy'' in so far as its right arm-the
N. r. Ais concerned.
In the textile industry the problem
is particularly acute. Planning to
cure certain evils has produced others.
Artificial prices have reduced domes-
tic consumption and opened the way
for increased imports from Japan. The
difficulty seems to be that, at least in
the domestic market, cotton textiles
have had to carry the price burden Of
relieving the cotton growers. And by
Government loans the price Of the
staple has been kept above the level
at which world markets will take 1t.
One remedy would seem to be lowering
prices all around by turning Govern
ment aid to cotton growers into an
outright subsidy, which in the end
might prove less expensive to all con-
cerned
Workers Take Cuts.
Under the present arrangement
cotton growers are cared for, but mills
and workers must suffer through an
arbitrary horizontal reduction Of IS
per cent in operating time. Such q
move is uneconomic in that 1t reduces
all to the same status, regardless Of
the relative strength Of their posi-
tions. and so holds out no hope Of re-
ward for the more efficient.
Planned economy" has seemed all
along to imply an omniscience in the
planners which they do not possess.
The A. A. A. has paid farmers not to
produce the things they might have
produced, and now our foreign trade
reports indicate that we are paying
foreigners for food products which we
might better have bought from our
own agricultural population. At the
same time our exports of farm prod
ucts have dwindled.
February trade totals showed that
our exports Of meat products, as COM
pared with the month in 1884, had de-
clined SO per cent; lard 81 per cent;
manufactured cotton 81 per cent,
and tobacco l3 per cent. Wheat ex-
ports, which were relatively small 0
year ago, have fallen to insignificant