Evening star., 1937-12-22
RENEWED FOREIGN
BUYING OBSERVED
Fears Evidently Subsiding
as to Strength of U. S.
Business.
BY GEORGE T. HUGHES.

The report from Washington that for
eigners are buying on balance in our
stock market, together with the as
surance of Secretary of the Treasury
Morgenthau that the recent outflow
of gold to France was not the re-
suit of liquidation of American Sc
curities, is both interesting and sig
nif1cant. 1t seems to show that Eu-
rope is no longer alarmed over the
business setback on this side.
Probably it would be too much to
assume that the British and the Dutch
are confident about our outlook, but
at least they feel funds invested here
are as well placed as they would be
at home. The Treasury, it is stated,
will shortly make public detailed
report of foreign trading in Amer
ican securities, covering the time since
the first break came in the late sum-
mer.
No Shift in Trade Balance.
There Is no doubt about the fact OF
repatriation of French capital, but
there is some mystery about the rea-
sons therefor. Certainly the return
OF funds was not actuated by an i'm
proVement in the balance of trade.
quite the contrary is the case, for the
excess Of imports for the first IL
months of 1897 was some Is billion
francs against 81 billion francs in
the Same period of 1896. For the
month Of November the excess of
imports was billion and half francs.
some of the Paris dispatches discuss
the possibility of instituting foreign
exchange control. The budget situa-
tlon Is u1lfavorable also. The figures
as gwen by the present minister of
finance are disputed by his predeces-
soF, who alleges that the loans the
government will have TO issue next
year TO cover the deficit will be twice
the amount in the official estimate
Against this we have the outflow of
gold from this country to Paris. which
the United States. at least. has no
cause to be concerned about. The
more gold that goes, within reason of
course, the better for us.
Market Continues Hopeful
Speculative attitude toward the
sIock market continues hopeful. Not
much help is expected from the busi-
ness statistics, except perhaps in a
negative way. 1t is felt that they will
not get any worse, even if they get no
better. The main reliance is put
upon the fact that, with prices 50
low, all the adverse has been dis
counted, including probably the dismal
fourth quarter reports still to come.
Stocks are in strong hands, as the
saying goes, and holders are not easily
scared. They are looking forward to
improvement some time in 1888 and
are willing to wait
Considerable buying is going on in
the aviation stocks and in those shares
Of heavy industry which would benefit
from an extensive armament program
Nervousness over the outcome of the
Panav affair is dying down, but in
any case large expenditures for ma
tional defense are anticipated.
If there should be any fear of actual
hostilities, the market would break at
once, but strengthening the Navy is
quite another matter.
With regard to the railroad stocks
an increase in rates is taken for
granted. The Street is busy calculat-
ing just how much per share an in
crease at various percentages would
mean to different carriers. Some OF
these estimates make allowance for a
falling off in loadings due to the bus-
ness recession. as well they may. and
yet the conclusion always is that the
stocks will be worth more if and when
rates are advanced This being so
the poor November reports are being
overlooked
tCopyright 1887 by the North American
Newspaper Alliance, Inc)