Evening star., 1935-07-21
Continue Rise With New
1885 High 80 Per Cent
Above March Low.
SOUTH HAS BIG STAKE
IN A. A. A. LEGAL FIGHT
Supreme Court Expected to Deal
Death Blow and Force Basic
Shift in Farm Aid.
BY CHARLES F. SPEARE.
ecial DiSpatch to The Star.

special OlSp2JCn 10 l ne OldE
NEW YORK, july 2C-Further re-
spect must be given to the evidences
this week of business recovery. That
this is so has beel apparent in the
market for securities, where stocks
have been quite uniformly strong and
at the highest average of the year.
The best feature mas been the broad
ening out of trading end the activity,
of various share groups. 1t can be
said that stocks have bad an almost
unbroken advance sine they touched
their low point ir Msrch. The aver
age gain since then has been 80 per
cent.
Apparently Wall Street attached
little speculative Importance to the
court decisions in the A. A. "A. and
r. v. A. cases. Ho Teve,. they have a
significance that Cannot be ignored.
The opinion Of the Circuit Court OF
Appeals of Boston in The Hoosac Mills
petition, involving the processing tax,
is believed to be the forerunner of a
future decree by tie United States
Supreme Court dIss2lv;ng the A. A. A.
as completely as CID this court in
establishing the unconstitutionality OF
the N r. A.
South's Economic Fate Involved.
Assuming this to be true, there
must be an entire revision of the
method of dealing WITH the farmer
and his surplus products. The eco
nomic future of the South is deeply
involved in the question. So Is the
financial position of the Government,
for it may be compelled to find means
to support agriculture out Of Treasury
loans. If Wall Street, felt satisfs ction
in the apparent breaking up of the
New Deal projects, i did not openly
express it through the usual medium
of the stock marset
The reverse Of this legal situation is
contained in the decision OF the
United States Court OF Appeals OF the
fifth circuit, which overruled the
famous Grubb opIn:op rendered last
year and upheld the constitutionality
of the T. v. A. This involves the
right of this Federal agency to sell
electric power IN competition with
private utilities.
The case is one trat likewise will
be disposed of b. the United States
Supreme Court. The d'cision follows
the recent shift in the sttitude of the
House in passing arrenCments to the
T. ". A. which would rullify the legal
philosophy of Judge Grubb.
Adjournment Urged.
The constant oraye- of the business
world is that Congress adjourn and
take the next FIVE months to medi-
tate on the tax bill. as well as on the
aspects of the measure dealing with
social security. There is enough for
the administration - co in getting its
relief work started anc putting its
$4,000 900, 900 fund into circulation to
take up its time. 1his is the most
pressing matter II has before it.
There is nothing L.gerlt in the other
projects on which 1t appears to be
basing its insIStence of immediate
action by Congress.
The most positive proof OF business
recovery this week is given in the
reports from the iron and steel trade.
This is described by the Iron Age as
spectacular, for it represents an IL
per cent gain over the previous week,
which had increased J4 per cent over
the week before. The 40 per cent of
capacity of the steel mills today con-
trast with % per cert a year ago.
The unusual feature IF this imLrove-
ment is that it occurs at a season
when output normally shrinks instead
of expands. Another is that it rep
resents a miscellaneous type Ct de-
mand; not one, as n the past, de-
veloping mainly frorl the automobile
industry. It Is also significant that 1t
bears little relation to the projects
sponsored by the Federal Govern
ment.
Power Output Mounts.
Power output this week likewise
shows q substantial gain over the
same period in 1884. Turning to
specific industries, we find the General
Electric Co. reporting orders for the
first half of the year of s104,543 900.
against $92, ,154 900 a year ago. with
net sales billed in the June quarter
IS per cent more than in the March
quarter.
The Standard Statistics production
index for July stands at 62.3 per cent,
contrasted with co., per cent in July
last year. From another angle the
rise in production is suggested through
the demand on goods manufactured
and distributed by retailers. 1t is
estimated that in the first half of
1885 store sales were about $105, 5,000,-
900 greater than in the correspond
ing period of 1884, with those for June
the largest for the month since 1881.
Unfortunately, the railroads are
not sharing in this broadening out in
American business life: Their earn
ings for May were unsatisfactory. This
is suggested in the dividend reduc-
ton by the Louisville & Nashville.
But they should be better as the
crops begin to move. The early prom
ises of large harvests in the North
west are being modified with the
spread of the dreaded black rust
through parts of the Spring wheat
belt. The character of the reorganiza-
ton of the several systems depending
on the crops will be determined by
the events in the farming districts
contiguous to them in the next six
weeks.
The scarcity of bonds of high rating
reflects again this week in the remark
able prices paid for public utility is
sues authorized to refund those OUT
standing. The Boston Edison Illumi-
mating Co. received q bid OF nearly l02
for a long-term 3h per cent mortgage,
and the Duquesne Light Co. is retiring
Continued on Third Pase.l