Milford chronicle., 1938-07-29

\ IBsefarabie from Local Weifare
According to some of the experts,
the upturn In the stock market was
the result of a heavy, sudden influx
Of foreign money into American Sc
curities. Foreign capital, so the
story goes, took the view that values
were at extremely, low levels, and
that the market was real bargain
counter. The foreign financial in
yasiOn gave a surge OF confidence to
American investors, who began buy
4 ing. Then the investment trusts,
which had generally been out of the
market for some time, waiting for
what seemed the low point, stepped
In and the major rise resulted. The
gains have been generally held, with
only minor reactions, on the basis
Of the latest quotations at the time
this column Is written.
Irrespective of the cause Of the
stock rise, there are some welcome
signs on the business horizon to
indicate that It is justified by the pO-
sition of commerce and industry.
The barometers have not gone far
ahead of their spring lows as yet.
But the tangible and intangible fac
tors affecting the late summer and
fall outlook are definitely improving.
There are sound grounds for argu-
ing that, even though nothing like
boom can be anticipated, the bottom
has been passed, and that the last
half of the year will be substantial
" better than the first. The upward
trend, in the view OF most authori-
ties, is due to start in August, after
the traditional July shutdown in
various industries, notably the auto
mobile, and to continue at a slowly
aecelerating pace.
Biggest late Industrial news was
the price cut in steel, initiated by U.
s. Steel. This has resulted in some
new orders, and much heavier orders
are anticipated. It is known that
some industries have been holding
off buying steel because they believ-
ed that a price slash was an immt-
nent possibility. Now that the price
slash has occurred these Industries
are surveying their low inventories
and again comm ginto the market.
The cut, on finished steel, according
to Iron Age, amounts to about 512
per cent.
Car-loadings remain at poor lev
els-but there is even an element of
announcement here, in that ever
since the third week in April, says
Business Week, the rate of loss as
compared with the year before has
steadily declined. Best improvement
in car-lOadings has been in the held
of merchandise shipments.
Electric power output is also tend
ing upward again, in spite Of the fact
that household load declines in sum
mer, which indicates a renewal OF
business activity in some quarters.
Output is running substantially un-
der last year, but is coming gradu-
ally closer to that level.
The inventory situation remains
favorable, especially in consumers
goods lines. Most experts think that
have just about touched
their lowest possible point. and that
buying will steadily improve. The.
outlook for buying in the heavy in
dustry field, on the other hand, is
far less favorable.
Also of great sifinifcance is what
seems to be a material Improvement
in the state of mind of some business
leaders, who are gaining the opinion
that the cycle is due to start upward
how long, no one knows.
And a considerable amount OF capt.
tai is coming out Of hiding.
Summing up, best guess is that ac-
tivity will slowly improve, but that
there will be no sharp upturns in the
indices. No one believes
we are on the verge of boom as we
were in 1886. Many believe that pro-
gress will be consistently made-but
hat it will be hard, slow going, and
hat there is no immediate prospect
'or regaining 1887 levels. Many feel
hat security values have come up
,bout as far as they will for some
ime. and that they will hold to about
he current level.
600
The Administration purge" is
definitely underway. The President
las stated that he feels himself at {
liberty, being head of the Democrat I
c Party, to take hand in state pri-
naries If he so desires. And accord
ng to all of the Washington cOrre-
pondents, the purpose of his swing
round the country was to endorse I
andidates he wants to see sent to
congress, and defeat those who have
opposed his major policies. The acid I
EST seems to be the Judicial Reor- /
anization proposal. Those who vot- I
d for It are considered good New |
Dealers by the Administration. Those b
rho voted against 1t, irrespective OF e
heir records with respect to other
sgislation, are mostly in the dog I
ouse.
The President gave Senator Bark i
~ Of Kentucky an extremely warm a
This primary is re- +
arded as a major test Of New Deal a
trength. If Barkley loses, it will be Il
serious blow to the Administration. 4
I he wins, It will be a significant II
lctOry. v
So far II Is hard to gauge the v
l.