Evening star., 1936-06-21
MARKETSREFLECT
CONTINUED CLIMB
IN TRADE ACTIVITY
Cleveland Unity and Landon
Platform Changes Are
Helpful Factors.
COMMON STOCKS REACH
HIGH SINCE MARCH, 1885
More Interest in Bonds of Middle
and Lower Ratings Also An
pears During Week.
BY CHARLES F. SPEARE.
SItcial Dispatch TO The Star.

NEW YORK, June ZU.-1ne III
terval between the two party con-
ventions has been one of rising levels
Of industrial production and mer-
chandise distribution, as well as OF
prices of securities and commodities.
Some portion of this uplift may prop
erly be credited to the unity achieved
at Cleveland and to the liberal
amendments to the Republican plat
form demanded by Gov. Landon. In
large part, however, it represented
continuation of a recovery that has
been under way for nearly year.
Prominent among the exhibits Of
returning activity in the business
world were those from the iron and
steel industry, whose II per cent
figure of production is the highest
in six years: from power and light
output, 142 per cent ahead of a year
ago; from car loadings, which are
approaching 100000 cars for the first
time in 1886 and likely to reach
100000 cars in the early Autumn,
and from retail trade, 10 to Is per
cent higher than in the same week
of 1885 in spite Of somewhat disap-
pointing purchases by the recipients
of the bonus.
In all of these departments OF do
mestic commerce, results in the pres
ent quarter outstrip those of the
previous six months, Of which the
governors of the Federal Reserve
Board wrote with enthusiasm in their
review published this week.
Weather Spurs Optimism.
Better weather conditions in por-
tions of the drought affected States
in the Southeast and Northwest have
contributed to the countrys optimism.
At the same time there has been evi-
dence of a distinct trend toward
higher commodity prices. This has
come about in cotton as result of
a broader domestic and foreign de-
mand for the staple The average
of wholesale commodity prices is lower
than a year ago. So is the average
of retail food costs. Without any
detriment to business, the commodity
level could rise to the high average
Of 1885.
One probable feature Of the labor
situation this Summer will be an
advance in wages. 1t is believed that
a movement of this sort Is pending
in the iron and steel trade looking to
a 10 per cent raise. This would re-
lieve the tension now existing there
and follow the proposed increase in
steel prices in the next quarter. The
pay rolls of numerous industries are
increasing. 1t is significant also that
a growing number of employers are
granting vacations with pay. This
has been one of the ciief demands
of the strikers in this months labor
disturbances in France and in Bel
gium. 1t is a reasonable one.
The relative prosperity of the ag-
ricultural districts is suggested both
by the volume of sales of the national
distributors and by the present ac-
tivity in the farm equipment trade
The gaining credit position of the
railroads, likewise, is indicated by the
amount of their refinancing of old
securities, their expanding purchases
of equipment, the amount of repair
work being done in shops in antici-
patton for large demand for cars in
the Autumn and by e-employment
of employees who have long been idle
or on part time.
The partial restoration Of the emer-
gency freight rates did not satisfy,
but if the railroad industry is to re-
main an independent part Of Ameri-
can business life it can hardly expect
to be carried indefinitely by the pub
lie or by the Government.
Executives Energy Revived.
It has been relieved this week OF
the interference in its affairs by
Joseph B. Eastman, Federal co-ordi-
nator. In the opinion of this writer,
Mr.. Eastman did much to revive the
energy of the railroad executives OF
the country and bring them to an
appreciation of their immediate prob
lens. He unquestionably stood be-
tween them and the movement to-
ward Government ownership.
The vitality of the market for Sc
curities Is shown in the recovery OF
the loss that occurred in the Spring
decline. The advance this week in
the averages of common stocks car
ried them to a new high level for the
movement which began in March,
1885. Accompanying this there has
been a revival of interest in bonds in
the middle and lower ratings.
From time Ito time, as investors
grow discouraged over the small re-
turn on high-grade issues, they make
resort to securities that provide both
a fair yield and some prospect for ap-
probation. Movements of this sort
lave usually run a short course. There
is possibly more justification for them
now in the railroad and public utility
groups than heretofore, as earnings
supporting junior issues are expanding.
Another factor, applying solely to
the power and light bonds and de-
bentures, is the savings effected by
refunding. In the case of one large
utility this amounts to per cent pei
annum on its heavy total of common
stock. Obviously it immensely improves
the position of classes of bonds thai
were not covering their charges in the
worst days OF the depression.
The refunding process continues
though at a slower pace recently. i
has been in railroad and industria
issues more than in public utilities
An extreme instance is that Of tn.
Chesapeake & Ohio 4 per cent equip
ment trust certificates, sold in 1884
and now reflnanced with a 10-yea
note carrying rates varying from y
of / per cent to 27s per cent.
On the other hand. the program
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