State of the Market

A prime current enigma is whether bankers are unwilling to loan money to businessmen or whether businessmen are unwilling to borrow from bankers. While this enigma was agitating the President (see col. 3), the cheerful news appeared that businessmen borrowed $114,000,000 more last week than they had the week before. This healthy spurt in commercial loans came on top of two months of slow expansion.

Also appeared last week clear evidence that the public is spending money. Retail trade in August exceeded estimates, was last week in some places running as high as 45% ahead of last year. Cinema attendance was running as much as 15% above a year ago. Manhattan hotel trade in August topped the same month of 1933 by 11%.

But not all this good news, nor the prophecies of Major L. L. B. ("Coming American Boom'') Angas, nor a blast of optimism from Propheteer Roger Babson, nor the fact that the American Federation of Labor plumped for the profit system, nor the universal pessimism of brokers' market letters--sure sign of better times ahead--could prevent the stockmarket from going down, down.*

Utility stock prices declined last week to the lowest level since 1932. The railroad averages rolled into new low ground for the year. Only a four-point drop in the Dow-Jones industrial averages was needed for chart-watchers to say that a bear market had been in progress for the major part of the New Deal. In terms of gold, stock prices were barely above the Hoover lows.

Federal regulation of the stockmarket begins Oct. 1. Chairman Joseph Patrick Kennedy of the Securities & Exchange Commission announced last week that there would be no "upheaval." He was proceeding cautiously, seeking practical advice at every step. It was announced that virtually all issues listed on the Stock Exchange would be available for trading after Oct. 1, thus scotching reports that companies like General Motors and Allied Chemical preferred delisting. But Wall Street knew the law.

Pools long stagnant were quietly liquidating. Individuals and investment trusts were lightening their holdings, so that they would not have to report transactions to the SEC as holders of more than 10% of a corporation's stock. And, gloomy over the whole outlook for securities trading, some brokers were walling to part with their seats on the New York Stock Exchange for $76,000, lowest price since 1932.

Across the frontier, seats on the Toronto Stock Exchange are now worth $60,000 and hard to get at that. Only three U. S. firms have seats. Only one U. S. corporation--American Cyanamid--has applied for Toronto listing since the Stock Exchange Bill was enacted. But Toronto has been reveling in an unprecedented boom in gold shares, and what the 113 members of the Toronto Board devoutly hope is that more & more U. S. money will be sluiced into Canadian mining stocks. In the ale houses off King Street it is freely predicted that Toronto seats will be worth more than Big Board seats before Christmas.

* James Mars Langham, writer of astrological forecasts for cult-ridden Southern California, advised his clients last week: ''While 1935 looks like a better year with rising stock prices, there is danger of a preceding lower level, until the disturbing effects of the Uranus-Jupiter 180DEG aspect is over."

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