Evening star., 1937-10-11
FINANCING SPURT
HELD GOOD SIGN
Bankers Hope for Revival to
Support Expansion of
Industry.
BY FREDERICK GARDNER,
Associated Press Financial Writer.

NEW YORK, October 11-A flicker
Of life in the capital market-source
Of money for industrial expansion
has stirred Wall Street hope for
broader revival to speed shift from
Government pump -priming."
Despite further slump in stocks
and secondary bonds, underwriters
brought out last week for offering to
investors about $144,000,000 in new
issues compared with about $20,000,-
900 the previous week. 1t was the big
gest week in the capital market since
midyear.
This week, judging by plans of in
vestment bankers, will be another dull
one in new financing.
From a longer-range view, how
ever. many bankers have been moved
to hope for lustier revival of the
capital market. The main incentives
to hope have been:
% Tapering of Federal deficit
financing" through use of bank credit
and recent pledges by President Roose-
velt of balanced budget.
(2) Resistance of top-grade bonds
to the sweeping washout of stock and
commodity prices since Labor day.
| 80 Estimates of a vast unsatisfied
need for construction and industrial
plant equipment. usually met in large
measure by borrowing through bonds
and sale of stocks.
Federal Billions Spent.
In its efforts to get the industrial
machine going Washington poured
many billions of dollars into the de-
preston breach in private borrowing
and spending, using the Nations credit
to obtain funds chiefly from banks.
Some months ago it seemed business
was ready to carry the torch. The
'pump-priming" flow of borrowed
money from Washington tapered.
Corporate security offerings to obtain
funds for plant Improvements and ex-
pansion-almost negligible from 1892
through 1935-started to rise.
Before it got up real steam, security
markets and commodities went into a
ta1l-spin last Spring. High-grade
bonds led the reversal. hit by "infla-
ton" fears and prospects Of rising
money rates. Except for a midyea,
squirt, the new capital market in the
interval had been virtually at stand
still until last week.
Now imitation ideas appear to have
undergone wide overhauling in finan.
cial circles. Analysts have seen the
change reflected in the decline ot
stocks and commodities, contrasting
with recent stability in the gilt-edged
list. They suspect administration ges.
lures toward balancing the budget
have been a major influence, coupled
with other Government moves to, use
boom" brakes.
Many Issues Planned.
Whether the change in heart ir
the market place will last long enough
to permit last weeks flicker in new
financing to grow into a man-sizec
comeback remains to be seen.
Over the horizon, bond men set
scores OF new issues waiting to bt
brought out as soon as the selline
storm clears and the capital market
demonstrates capacity to resume it.
old role in financing corporate enter.
prise. Many planned offerings have
been postponed since the 1887 cracl
IN security prices closed the partially.
) opened gates.
While Government planning 70,
housing, rural electrification, regiona
development and other projects have
opened new avenues for long-rangt
Federal spending, most Wall Streeter.
look to the market for private issue.
as the real key to sustained business
recovery.
Upon robust revival Of corporate
offerings, they hold, depends a sue.
cessful pass of the spending ball from
Washington to industry.