Evening star., 1938-05-05
Wall Street
Topics
BY FREDERICK GARDNER,

ny EnEO61e1NA OAnON616s
NEW YORK, May s @.-Looking
at tbs stock market in the light Of cur
rent conditions In industry and trade
evokes no strong bullbh impulse,
analysts admit. But, putting aside for
. moment the OBSERVATION-DISCLOSURES
factory earnings, the doubtful dividend
prospects and recovery uncertainties
and concentrating attention on the
markets internal position. some traders
think the speculative position has been
pretty thoroughly debated in the last
few months.
Confirming this belief among market
students was the May stock exchange
report on brokers' loans. Considered
q reliable index Of the amount Of
public speculative interest, the borrow
ings were the lowest for more than
20 years with the exception Of brief
periods In 1892 and 1888 when forced
liquidation incident to the Wall Street
panic reached peak force.
As Of May I, the exchange reported,
members collateral borrowings were
around $466, ,760, 900; in other words.
the brokers owed this amount to the
banks for loans contracted to handle
the margin accounts Of customers.
It was only a little more than S per
cent Of the total borrowings of men,
bers at the peak of the boisterous 1929
boom, and far under the monthly
average of the ensuing comparatively
tame years.
Checking over the collateral loan
figures, analysts found they were con-
siderably above the present level when
the market unfurled sail for the two
year bull run which ended last spring.
On April /, 1885, they totaled roughly
$773 ,000, 900, and by May l, 1887, they
reached q top at $1,186, ,327 900. With
the October November collapse in
stocks the loan account shrunk
markedly.
Considering total value Of listed
stocks, the market appears to be not
far from the zone from which 1t
started its climb two years ago. On
April the stock exchange list has a
value Of $31,858, ,461 900, in contrast
with $50. .936. .000, 900 on the same date
in 1885.
Whether in bull markets or bear
swings, there Is always divided opinion
in Wall Street as to whether prices
are too high or too low. A good many
analysts feel that present values, even
after the big decline Of the last year,
should not be classed as bargains in
view Of the low level Of corporate
profits generally.
On the other hand, some argue the
fact that the last years decline
squeezed out about so per cent Of the
early 1887 value is q strong commen-
tary on the extent Of the liquidation
the market has undergone.
The question Of the steel industry's
policy with regard to prices of finished
products Is again stirring interest in
financial circles. Word from Pitts
burgh Is that consumers generally are
not keen to place orders until they
know the price schedules for third
quarter deliveries. Leading producers
are expected to post them later in the
month.
There Is talk that the industry is q
bit disturbed over recent claim by out
side observers that prices are holding
back consumption, but whether quo
tations will be cut to test this point
is Z question still to be decided.
Among steel manufacturers it Is
said to be the consensus that price
shaving would influence consumption
only negligibly and would deepen
operating Losses. Most big producers
were in the red in the first quarter.
Bethlehem was a notable exception.
Some pressure for cuts in prices Is
being felt in the industry, according
to stories heard in Wall Street, as q
result Of increasing willingness Of GER
tain steel companies to grant ''conces-
sions" from the established quotations.
Steel men insist the shading so far
has been confined to smaller COM
panies, but observers say the practice
has recently tended to spread because
Of the low volume Of consumer de-
mand.