Evening star., 1936-09-20
|STOCKS WEAKENED
|bY LONG ADVANCE,
EUROPE WATCHED.
Technical Factors, Tension
Abroad Bring Period
of Uncertainty. II
REFLECTS
HIGH MARGIN RULES
Present Requirements Constitute
Element of Danger in Case
of Sudden Selling.
BY CHARLES r. SPEARE.
Ere rIsl Dispatch to The Star,

BY CHARLES F. SPEARE.
srerial Dispatch to The Star.
NEW YORK, September 19.-The
clouds over the foreign situation
proved more of q factor in stock
market movements this week than the
results of the election in Maine. The
tension abroad was emphasized by
Secretary Hull's speech In New York
Tuesday night and the suggestion that
abandonment of part Of President
Roosevelt's campaign trip was due to
this condition.
Wall Street had accurately FORE
cast the general trend of the vote in
Maine and discounted it. That the
public utility shares should have ap-
peared SO soft in view Of it was dis
appointing: also the heaviness at
times in the rail list in spite Of con-
tinuing evidence of net income by
the carriers far In excess of q year
ago.
Market Technically Weak.
Technically, the market has been
weakened by its long advance. It
appears to be without leadership. It
requires q period Of digestion. Just
now 1t Is stale. It's narrowness Is
. reflection Of the unreasonably high
margin requirements which constitute
an element Of danger in the event Of
liquidation forced by some unsettling
incident abroad.
After i've days Of decline and an
average loss Of over three points it
was to be expected that q fair-sized
rally should occur. as it did at the
week end.
Nor has the publicity given this
week to the security Of life insurance
companies and banks been at all help
full to investment and speculative mar
kets. While the facts as to the in
creasing assets Of one and the stabil-
ity Of the other have been satisfac-
torily presented, the loose statements
made with political intent have devel-
oped implications Of weakness among
the country;s chief fiduciary and finan-
cial institutions, with q disturbing
effect on . portion Of the public.
It Is . fact that does not admit
that the assets Of both insurance
companies and banks have been stead
ily increasing In volume and In market
value for several years, that the policy
loan and real estate aspects Of the
life insurance situation have greatly
improved and that the banks are LIQUID
to the point Of absurdity.
Trade Barometer F1uctuates.
Variations in the business barom-
eter are noticeable this week, but with
out the effect Of producing any change
OF consequence in the average index
figure.
Warmer weather has benefited retail
sales. From practically every section
OF the country come reports Of q heavy
demand for Fall goods, larger factory
an active building trade,
railroad freight and pas
senger earnings and, unfortunately, q
recurrence Of the new era" period of
installment buying.
To some economists this tendency
has even greater possibilities for harm
than the rising Government debt. It
Is being applied to purchases Of cloth
ing, radios, furniture, electrical ap-
pliances for household use, as well as
to automobiles. It Is being fostered by
the credit companies, whose exper-
fence during the depression seems to
justify their faith in the willingness
or ability Of the average person to
meet such debts whenever possible.
However, the effect Is to lift the cost
If domestic operations Of the purchasers
by 10 to Is per cent over their ordi-
nary budget and to mortgage their
future to o dangerous extent.
Cost Of Living Rising.
The direct cost Of living, that Is
those essential costs which each fam
lily has to face, as food, clothing, rent
and fuel, Is rising slowly but not dan
gerously. There Is no suggestion Of
an imitation that need worry the life
insurance policy holder or the bank
depositor.
According to the latest figures Of
the Bureau Of Labor, the total advance
in such costs In the three months
ending July IS, was less than 2 per
cent.
It has since gone higher. In the
last three years, the advance amounts
to slightly over 10 per cent. Food Is
going up faster than rents. This makes
q problem In relief that will be more
apparent three months hence than It
is today, when outside employment Is
absorbing large numbers of those who
were dependent on some form Of
made work" or dole prior to May /.
An evidence Of business recovery is
to be found in the steady expansion in
loans. Members of the
Federal Reserve System increased
such loans this week nearly $50, ,000,-
600. Compared with year ago, loans
for strictly business purposes have ad-
vanced $491 900 600. Moreover, the
total Of commercial paper outstanding
ut the end Of August was the highest
In i've years. This Is one Of the tru-
est indications available Of reviving
business activity. In spite Of the
drought. the Sears, Roebuck CO. had
the largest sales through August and
into September In its history.
tcopyTisht. 1896. By the North American
Newspaper Alliance. .nc.)
SCHEAFFER PEN VOTES
81 COMMON DIVIDEND |
by the Associated Press.
CHICAGO, September 19.-Directors
,f the w. 3. scheafier Pen Co., Fort
Madison, Iowa, today declared divi- |
lend Of 81 on the no par value COM
mon stock. payable October Is to
took Of record September 30.
Net income for the ok months end
I'd August 81 was $20S,574, against
|l4i.2es the corresponding 1885
,eEtod