Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-08-25
STOCKS HESITATE
AS TRADE FORCES
STEADILY AHEAD
Most of August Average
Gain Is Lost During
One Session.
BY CHARLES F. SPEARE.

opcCIhl DlSpaLCn 10 ! ne star.
NEW YORK, August 24.-In one
market session this week nearly all
the average gain made by stocks in
the first half of August was Cancelled.
Later came a rally.
The reason for the relapse was
technical in part, for stocks had been
rising with little interruption since
March. It was really the result of
confused situation in Congress over
bills that have been responsible for
price fluctuations for several months,
and OF the new alarms over the Italo-
Ethiopian dispute.
Meanwhile, business continued on
the upgrade with more evidences of
recovery in the statistics of trades than
have been backward during the period
when retail activities were expanding.
The strength and assurance of the
business outlook are the steady growth
Of orders in the major industries and
the ability Of retailers to enlarge
their sales in spite Of the constant ad-
vance In wholesale prices Of. COM
modities.
Bank Measure Helpful.
The compromises effected between
the administration and the financial
world in the new banking bill have
produced a measure quite generally
satisfactory and one that should con-
tribute to the stability of members
Of the Federal Reserve system. More
authority is given to those best equip
ped to exercise 1t. Policies that were
impotent in the 1929 panic. and in
the subsequent period to March, 1888,
have been recaSt.
On the other hand, the compromise
reached on the public utilities bill
satisfies neither the advocates of the
death sentence" in its original form
nor the bitter opponents of this de-
structive feature of the measure. 1t
leaves the issue in a confused and
complex form, difficult to interpret
and still open to political manipula-
ton. 1t does not eliminate 1t as a
bone Of contention in the 1885 cam
paign.
The public utility interests are
shrewd enough to know that their
sins of omission and of commission
have been quite generally revealed in
the long debate in Washington, that
no more Hopsons will be tolerated and
that their rates must be lowered in
order to avoid municipal and Federal
competition.
A simplification of their financial
structures Is also mandatory. This
being so, 1t Is best that they should
be permitted to operate under the
present regulatory laws, for from now
on they will undoubtedly reflect in
their policies an experience gained
in the present controversy and seek
to avoid in their public relations and
their financial methods the mistakes
Of the past.
Funds Go Into Stocks.
So long as the business recovery
impresses the public as it does today,
1t will be the paramount influence
over the stock market. People with
idle money, or money giving a low
return. are eager to improve their
position. The savings banks are be-
ginning to note withdrawal Of funds
and can trace their flow into securi-
ties.
That prices can go too high and
yields fall so low that the investor
ceases to buy the select type of Sc
curity which has been interesting him
is suggested by the reaction in rail-
road and public utility bonds Of the
first rank and the indifference to new
industrial issues, as well as by taper
ing of Of quotations on United States
Treasury loans.
(Copyright 1885. by the North American
NsYspaper Alliance. IncO