Evening star., 1939-08-29
BY SMITH REAVIS,

mohlllzed Tor purchases Of Amer
lean materials and machinery in
event OF general conflict.
Suspension Unlikely.
Confidence has been growing in
certain brokerage quarters the New
York Stock Exchange could avoid
another suspension of trading such
as followed the outbreak of the
World War in 1914. when the New
York market closed for five months.
The precautionary move Of the
British authorities in clamping re-
strictions on sale Of foreign securi-
ties generally was taken in Wall
Street as restraint on panicky SELL
ing in event of hostilities. Besides
this, brokers cite the Federal Re-
serve Boards control over the mon
ey market, s. E. G. powers to rule
the exchanges and the great return
Of American securities from Europe
in the last conflict.
Moreover, it was reasoned the
Government controls existing today
would be exercised over business
conditions which have been seasoned
by the defiation of prices since 1929
and presumably much better sit
uated for withstanding blows from
outside the country than in 1914.
Business and brokers loans total not
much more than at the depths Of
credit deflation in 1882 and 1898.
D~ir> Dl.n r.
Bankers are entertaining the
thought that heavy wartime draft
of American business and raw ma
terial supplies might raise prices
and stiffen money rates. But there
is little talk at this stage OF any i'm
portant change in Wall Street
money rates, despite the doubling of
the Bank of England's discount rate
boosted from to 4 per cent-and
the iacking Of the Bank Of Neither
lands lending rate to per cent
from 2.
The advance of money rates and
fall in gilt-edged securities in Eu-
rope, on the contrary, partly have
been reflection of conditions
which have been operating to
create a vast pool OF idle money
here-namely the flow OF gold and
capital to New York for safekeep-
ing and for purchase Of war sup
plies.
Excess reserves of member banks
of the Federal Reserve system-al-
ready at a record figure-are ex-
pected to soar when the large ship
ments of gold now en- route from
London enter the Nations banking
system. While the plunge Of the
pound since the British stabilization
fund stopped pegging it last week
may cut off the golf flow, latest re-
ports indicate more big shipments
are on the way to New York.
Today finds the United States
with 1899 wheat crop of around
73l 100000 bushels and a carryover
from other years of 265 900, 900.
Supplies are put at around 100000
900 bushels above domestic needs.
Wheat crops aborad are reported
adequate in most other countries,
and grain men say there is little
likelihood the huge United States
carryover will be reduced much
through normal peace-time exports.
1t would take enormous war buying
to cut heavily into the huge surplus.
Wheat, No. 2, hard quality, closed at
Chicago yesterday at tbs cents a
bushel. compared with 67A cents a
fortnight ago.
Cotton Goes Down.
Cotton-on July 25, 1914, middling
upland cotton was selling at New
York at $66.05 & bale. BY the end
of December of that year it had
plummeted to $39. European buy
ing of American cotton dropped
promptly with the rolling of CONT
mental war caissons, and remained
low throughout the war
Workers who ran Europes cloth
mills were in the army. Europe
stumbled through 1914-19l8 short on
clothing as the nations able-bodied
industrial workers bore guns and
fought it out in front line trenches.
The annual rate of continental con-
sumption of American cotton drop
ped from 4600,0 900 bales to l,400, 900,
and the British rate from 5000 900
to 2,300,000. Cotton tilted up in
1915, however, despite the lower Eu-
ropean demand. But the highest
prices for cotton were not seen until
the spring of 1920 at the peak of the
postwar boom-when cotton mills
slowed by the war got under way
again. A "buy-a-bale" movement
started in the South lifted the staple
IN 1920 to nearly $2l9 a bale.
Today the United States expects
a 1899 cotton crop of IL ,4l2 900
bales and carryover of l3,O32,6ll
bales from other years is the highest
on record. Cash cotton, middling
New York, closed yesterday at
$44l0 bale, contrasted with $46.45
two weeks ago.
Steel Jump Delayed.
Steel-In August, 1914, the average
price of leading finished steel prod
ucts prices was $3.50 a ton. Steel,
important sinew of war, didn't Jump
with the outbreak of World War
fighting. BY December Of that year
it had even slid q little lower and
was holding around $30.59 q ton. It
was not until around the end OF
1915 that steel started up, but when
it began rising 1t rose with ven
geance. Steel products were selling
at $11757 a ton In 1917 just before
the War Industries Board fixed
maximum prices. The maximum
price set for steel products in that