Evening star., 1936-06-29
CAMPAIGN EFFECT
ON TRADE AWAITED
Business and Markets Pay
Little Attention to Infla.
ton Warnings.
BY GEORGE T. HUGHES.
Specia! Dispatch to The Star.

special Dispatch TO Tne star.
NEW YORK, June 2s.-Now that
the conventions are over, the candi-
dates named and the platforms
known, the effect. If any, of the open
ing presidential campaign on business
may be expected to appear.
So far, there has been no visible
retarding of the progress of recovery
that could be ascribed to political
factors. 1t may show itself later.
That remains to be seen. The fact
is, however, that the business man
who went ahead with his plans with
reasonable conservatism to date has
come out the best.
Curiously enough, that is true also
of those investors, institutional or
individual, who have bought Govern
ment securities in the face of all the
predictions of disastrous imitation.
These predictions have very recently
been reiterated by DR.. E. w. KEN
merer and DR.. H. Parker Willis in
most emphatic form, but neither in
dustry nor the securities markets
seem TO have taken cognizance of
them.
Deficiencies Accumulated.
The ability of business to stand up
against so much adYersity. or rather
prophecy of adversely, is doubtless
explainable by the necessity of max
ing up for deficiencies accumulated
over six or seven years of depression.
This is notably true of construction.
The Secretary of Labor reports that
the value of permits for residential
construction in May were up 70 per
cent over that month a year ago.
Non-residential construction is up As
per cent, and additions, alterations
and repairs to existing buildings up
80 per cent. The aggregate advanced
81 per cent.
1t is true that, because Of a sharp
drop in the value Of non-residential
structures for which permits were is
sued, the aggregate value in May
dropped below the April level, but the
trend is unbroken. Revival in con-
structlon is firmly established.
Index at Peak Since 1880.
One Of the best known business in
dices that of the New York Tines
is at the highest level since April IL.
1880, with pronounced gains in all its
components.
There may be some reversal in the
near future, as for instance in the
steel industry, where the weekly sur
vey of the Department of Commerce
admits that the present contra sea-
sonal gain represents, in part, business
borrowed from the third quarter.
This, however only supports the prop
osition that as yet there has been
seen no retarding effect of politics.
Electric power output continuously
expands, q new all-time record having
been set in the last report. Auto
mobile production keeps up surpris-
lngly we'll Finally, retail trade,
whether because of the bonus distri-
button or some other reason. moves
vigorously ahead,
While, as stated, there has been no
indication of weakness in the securi-
ties markets, taking them as whole,
there is some sign that bonds are ap-
preaching a temporary peak. New
offerings last week ran to more than
$3.50, ,0Oo, 900, and. as a rule, they were
priced to take all the advantage pos
sible of prevailing money rates.
Fundamentals Unchanged.
There is no change in the funda-
mentals. The greater part of new
financing is for refunding purposes
and the problem of the investor in
combining reasonable safety with a
fair return is just as difficult of So
luton as ever.
On the other hand, the bond buyer
is becoming a little more fastidious as
to quality. Most recent issues are
quoted in the street market at the
same price, or a higher one. than at
which they were originally offered but
there are exceptions. An interesting
feature has been the tendency to turn
to Governments, on the theory that
the price spread between the Treasury
obligations and those of municipalities
and corporations has narrowed to
make the former the better bargain.
(Copyright. 1888. by the North American
Newspaper Alliance, IncD