Evening star., 1937-01-10
MARKETS REFLECT
STRIKE THREAT TO
RECOVERY TREND
Resisting Power OF Stock
Leaders Demonstrates
Basic Strength.
EFFECT OF EXTENDED
SHUTDOWN is FEARED
Other Demand Maintains Steel
Rate for Time-Congress Will
Face Labor Issues.
BY CHARLES F. SPEARE.

special Dispatch to The Star.
NEW YORK, January 9.-The frs
business week in the New Year pro-
duced a crisis in the relations between
capital and labor that threatened tc
involve more than 100000 workers anc
to check the recovery movement thai
had progressed, with little interruption
for eight months. Its effect on secur.
tiles was to cause temporary sharp de.
clines in stocks of concerns identified
with the automobile industry and tt
bring about some concessions in com.
modities.
Public sentiment was as unfriendly
to the attitude of the labor organizer!
in trying to force demands on the
motor manufacturers as it was in 1922
when the railroad conflict, involving
the shop craft unions, came near tyinl
up the railroad service of the country
It was the general feeling that 1t wa.
an inopportune time to foment q wal
that could only result in more unem.
ployment, especially when the issue!
were not primarily those Of wages anc
the workers involved were among thu
highest paid and the most securely
placed in industry.
Market Shows Strength.
The resisting powers of the stoci
market in a situation with such bearist
implications gave evidence of its funda.
mental strength. There was little sigr
nf Hnf1ido tfn1 Trno farhniral
Of the market had been improved by
the year end selling for tax purposes
and by those readjustments that are
natural to the period.
1t was apparent, too, In second and
third grade corporation bonds. thai
the influence of increasing profits and
promise Of their continuance were af-
fecting the attitude of the investor OF
speculator above all else. Further
large commitments to refund old
issues and to introduce new capital
loans to the market we're proof that
the period Of business expansion Is to
be prolonged.
Commodities were more sensitive to
the industrial conditions than were
securities. This was due to the rapid
and over-exaggerated advance that
occurred In them in December. Con-
sequently, what Wall Street likes to
term a corrective movement" oc-
CURED. 1t mainly affected grain,
rubber and metals, which had led the
rise since the end Of October. Ac-
cording to the Dun g. Bradstreet
wholesale commodity index. prices on
January l were well above those OF
1929. However. this was because OF
the extreme advances in a few COM
modities. Unfortunately for the work
ers and those on relief, the effect is
to curtail their buying power In the
necessities of life.
Steel Production Rises.
In spite Of the closing down Of au-
tomobile plants, the production of iron
and steel this week has approached an
80 per cent ratio to capacity. Some of
the suspension of motor company Or
ders has been balanced by railroad
buying and by contracts for construc-
ton materials. There Is also a spec
ulative demand based on the prospect
Of higher prices and fear of scarcity
of supply.
Any extended shutdown in the
automobile industry, however, would
quickly give different complexion to
the steel centers of the Middle West.
The automobile industry has become
too important in its employment and
in its purchasing power for general
business to escape injury whenever 1t
becomes depressed.
Budget Is Studied.
One Of the high lights of the week
was the budget message on Friday by
President Roosevelt to Congress. This
contained the pleasing information
that, for the fiscal year ending June
30, 1898, the budget would be brought
to balar>>-with the qualification, in
the meantime, that employers give
jobs to persons now receiving govern.
ment help, and exclusive of the statu-
tory item of $401 ,000, 900 for debt re-
tirement. This to-be-desired condition
was said to be possible even If the
appropriations for recovery and relief
in the year were as much as $1,537,.
100000.
President Roosevelt proved his fig
ures by showing estimated receipts Of
$7,293, 100000 and expenditures of
s6,135, 100000 for 1888, which gave
him balance of 1,I35,000, 900,
against q deficit of $2,652, 900 900 in
the fiscal year 1897, and one Of $4,-
1853 ,841 900 for 1896.
IFS" Are Important Items.
There will doubtless be critics of the
administration and Of its methods of
bookkeeping, who will be- ready to
pick flaws in the system of mathe-
matics from which a balanced budget
estimate is now obtained. The weak
point in President RooSevelt's reckon
ing Is possibly that of determining
18 months in advance what it will
cost to run the Nations business
when there are so many contingencies
that might arise to disturb recovery,
such as strikes, foreign wars, etc. His
(CAo syTDVEC D..@ -