Evening star., 1948-05-30


above year ago.
On the financial side the going
was easy too. Underwriters found
investors eager to buy an assort-
ment of new stock and bond Offer
ings that poured $100,000,OOo or so
of ventured capital into corporate
tills. Most of 1t will be used to
expand and improve facilities.
The Governments June financing,
concluded during the week, was on
such favorable basis to the treas
ury that a net reduction in the
national debt of $53S, ,424, 900 was
accomplished.
The stock market remained in
what brokers call IAN area of con-
solidation" which means that every
time it tried to get past the recently
established high 1t was knocked
down by profit-takers and short
sellers.
But try it did, day after day. and
the resultant churning produced
volume that averaged close to 2
mllllOn SnareS daily.
Brokers Loans Higher.
A highly significant aspect of the
current stock market was contained
in the weeks banking statistics,
which disclosed brokers loans rose
to 1894 100000 from $500, ,O00, 900 in
the previous week, placing such
credit at the highest level since last
October 3.
This big Jump simply means that
buyers of stock made liberal use OF
margin privileges. You can buy
stocks now by putting up rs per
cent of the price in cash or its
equivalent. The broker borrows the
other 25 per cent from the banks.
The General Mortors new wage
formula that settled it's dispute with
the CIO United Automobile Workers
was by far the top labor develop
ment of the week. 1t was surprise
to everyone outside the negotiating
circle. Comment from business and
labor alike was cautious pending
full study from all angles.
Impartial observers leaned heavily
to the theory that this idea of
tie-in between wages and the cost
of living would grow like Topsy, at
least in those industries that are
able to pass increased costs along
to the consumer.
The automobile industry can do
that If it wants because there's
nothing to stop 1t except consumer
rebellion against high prices. The
demand for new cars is too great
to count that as factor now.
Steel, coal, electric equipment,
lumber, shipping and other heavies
in the industrial field that deal with
one union are similarly situated, at
least until better balance between
supply and demand brings compe-
tition between individual firms into
play.
There is another side to this coin,
however and it spotlights innumer-
able BARRIERS to the universal ap-
pljcation Of this type of labor con-
tract.
Hundreds of thousands Of indi-
vidual businesses and even entire
industries are back in a competitive
era after the war interruption. Such
large employers of people as the
railroads and utilities have little
control over what they charge for
services. The rates are fixed by
Government or State agencies.
Reaction at Washington to the
contract was generally
favorable. Cancellation Chief Cyrus
c. Ching hailed it as peace form
ula which may head off major
strikes this year.
Evan Clague, chief Of the Bureau
Of Labor Statistics, whose agency
will play the leading role in de-
the future course Of Gen.
eral Motors wages, said he did not
see any reason why the GIN formula
would automatically raise prices,
because there were counteracting
factors in IT.