Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-03-09
STOCKS WEATHER
BLOWS IN NEWS
Speculative Issues Keep
Chins Up-I. C. c. and
Whitney Shocks Latest.
BY FREDERICK GARDNER,
Associated Press FinaucIaI Writer.

ASb0cl1teo ere66 FINANCIAL WflLer.
NEW YORK, March SIT never
rains but it pours" Is an old Wall
Street observation borne out in q
deluge of dismal tidings in the mar
ket place.
Suspension Of Richard Whitney &
Co. by the stock exchange capped a
budget Of news which has been hard
reading for the financial district-de-
Ginning business barometers, sweep
ing dividend cuts and omissions,
groggy market for rail bonds, freight
trafi1c down to about the low levels
Of 1888. virtual cessation of new f.
nancnig by corporations. speculation
in stocks almost at q standstill most
Of the time in recent sessions.
Yet speculative markets-stocks
and major mmodities-have sailed
through it thus far in fair shape.
Most surprising to many observers
was the way they took the blow of
the Whitney firm suspension yester-
day. an event which made the most
sensational headlines for q similar
Wall Street upset IN many day.
I. C. c. Ruling Is Blow.
On top Of the suspension came the
I. c. c. decision on freight rates.
High hopes had been built up for it
in speculative circles. Many had
guessed the I. G. c. certainly would
come through with . fiat increase Of
at least 10 per cent to ease the suf-
fering Of the carriers, on their meager
freight diet.
But on hasty examination after the
decision came through late in the
afternoon, many rail analysts tagged
it disappointing" since it restricted
the increase to only S per cent on
some Of the largest freight classical
tions and exempted others entirely,
including soft coal, the biggest rev.
enue producer.
Thus rail men were left waiting for
trafic expansion to provide the main
help in digging out Of the cellar into
which carrier earnings have fallen.
Many Buying Outright.
Why the stock market has been so
impervious to the recent run of bad
news, brokers say, may be guessed per-
haps from look at brokers' loans and
s. E. c. data showing steady absorp-
ton Of stock in small amounts by pur-
chasers who probably buy outright for
longer-term holding.
Evidently, 1t was held, so much
stock has gone into investment hands
and out Of margin accounts, holders
have been able to ignore the black
clouds in hope the storm would pass.
Brokers loans, an index to speculative
holdings on margin, have been cut
about in half since last March. Before
that there was little expansion in
speculative borrowings, 50 far as bank
figures show, compared with the extent
Of the advance In stocks from March,
1885, on.
On that upswing, the Federal Re-
serve Board lacked up margin require
ments until buyers had to put up IS
cents out Of every dollar Of the market
price In cash. That tended to keep
margin operations at the lowest in
market history Of recent decades for q
comparable advanee in prices, analysts
say.
Echo Of Washington Policies.
In the I. c. c. ruling restricting rate
increases on farm products and some
building materials, like lumber. an
alysts professed to find an echo Of
Washington policies aimed at reviving
construction and helping the farmer.
Federal authorities have argued
building materials, among other prod
ucts In the administered" price
category, have been too high In rela-
ton with prices of farm products and
basic raw materials. Apparently .
stid rise In freight rates would have
exaggerated the hump in building costs
still more for transportation costs are
considered q considerable item in
ultimate expense to the user Of the
heavy products which 60 into factory
and home construction.
How much help rail equipment