Market & Trade

What really made the stockmarket newsworthy last week was not that it took the worst one-day tumble in more than a year but that it did not tumble more. War was the worst but only one of a series of disturbances. One day reports flew fast that New York, New Haven & Hartford R. R. would most certainly default on an October interest payment, and the stampede to unload New Haven shares on the New York Stock Exchange demoralized trading at the New Haven post. Though New Haven met its obligations on the dot, Nickel Plate and Denver & Rio Grande Western both deferred payments, the weekly carloading report dipped sharply as a result of the coal strike and RFChairman Jesse Jones put New York Central in the headlines (see col. 3). Heavy selling spread throughout the rail list.

After its first war scare, the rest of the market suddenly snapped back smartly with "war babies" like airplane, chemical and copper stocks in the lead. Only notable effect of war and preparedness on business so far has been in the price of foreign copper, which continued to climb last week until it was above the domestic level of 9-c- per Ib. A boost in U. S. copper (tariff protected) is likely to follow shortly.

But the market's amazing resiliency was not due to prospects of war profits. Flowing in from banks, power plants, mines, mills, farms, factories was mounting evidence of broad Recovery. Power production last week was the highest on record with the exception of one cloudy week in December 1929. Bank deposits revealed in third-quarter statements were higher than in 1929.* Bank clearings were up 37% from a year ago. All indices of commodity prices were at a five-year high. Wholesalers were experiencing difficulty in obtaining prompt deliveries. Shippers predicted carloading would show an average increase of 6% for the rest of the year.

Retail trade, revived by brisk weather, was again running 10% ahead of 1934. Merchants were surprised at the demand for quality goods, particularly suits, dresses, home furnishings. Toy-buying for the Christmas season was as much as 15% better than last year. Night club, hotel and theatre trade was reminiscent of the boom.

Steel production, surest index of basic recovery, held above 50% of capacity, although its best customer, the automobile industry, was practically at a standstill with big plants like Ford, Chevrolet and Plymouth just beginning to turn after their yearly halt for retooling. Since the motor season starts in November this year instead of January, steel and the dozens of other industries that supply the motor-makers will feel the full force & effect of rising production before the year end.

*Noteworthy was the statement of Bankers Trust Co. showing for the first time resources of more than $1,000,000,000. Other billion-dollar U. S. banks: Chase National ($2,200,000,000), National City ($1,800,000,000), Guaranty Trust ($1,700,000,000), San Francisco's Bank of America ($1,100,000,000), Chicago's Continental Illinois ($1,000,000,000).

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