# The New York Times/1929/10/24/Financial Markets

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FINANCIAL MARKETS
Heavy Break in Stocks; Second Largest Day on Record—Money 5 Per Cent.
The exceedingly violent decline in which stock market prices were swept down yesterday was immediately the result of the market's failure to maintain the recovery of the day before, following Monday's absence of any recovery whatever. It was manifest on both occasions, to experienced Wall Street watchers, that the market was not acting as it has usually done when causes of special weakness had been eliminated. Instead of resuming Tuesday's early advances in the initial trading yesterday, the market came momentarily almost to a halt. Aggressive "supporting orders" seemed to have been withdrawn; orders to sell, which had been held back in hope of rapid recovery in prices, were still overhanging. In the afternoon, these e selling orders came in a sudden deluge on the market.
In the rapid and chaotic decline which resulted, with total transactions exceeding all precedent except that of March 26, values were cut down with greater rapidity than on Monday, and the day's market ended in great confusion. That the violence of the break was aggravated by heavy professional selling for the fall was evident, but the response to such pressure showed that a thoroughly vulnerable speculative position had remained. On this matter it is superfluous to moralize. It was the plain enough reckoning for the manner in which the spirit of speculation has long assumed that, whatever might happen in the way of incidental reaction and whatever might be the state of the underlying credit market, prices for stocks were absolutely sure to continue rushing forward into previously unimagined heights.
As might be supposed, Stock Exchange money rates continued relatively low during this heavy liquidation. Foreign exchange quite as naturally held strong, with sterling at the higher (illegible text) this movement, and French exchange unaffected by the Briand Ministry's defeat. Other markets than that for stocks were weak. Wheat in particular declined to the lowest price yet reached in that market's long readjustment from the high point of midsummer. The December delivery, which rose 53 cents a bushel between May 31 and July 29, has now fallen back 33 cents. Yesterday's price was still 11 cents higher than at this date last year; but the grain market then was reflecting the largest world production on the agricultural records. It is that huge harvest which has offset reduction of the North American yield this year; creating, as the Department of Agriculture officially reported yesterday, a present accumulated American and Canadian surplus never equaled in agricultural history, and 125,000,000 bushels greater than a year ago.
Purely in comparison with this season in other recent years, yesterday's midweek reports on trade activity were not altogether favorable. The steel trade summaries place current production, on the average, somewhere around 75 per cent of capacity, with the United States Steel operating at 80 per cent and some of the independent mills at 70. In this week of 1928, production for the industry as a whole averaged 90 per cent; in 1926 it was above 85 per cent. Until this month, only one week in 1929 had failed to show substantial increase in loadings of railway freight over the same week in 1928, and the total loadings of every month had exceeded 1926. But yesterday's report for the second week of October, like the report for the first week of the month, shows decrease as compared with both those years, the Columbus Day holiday being included in all three.
The decrease is not great; it may not be continuous. But it attracts attention simply because it is a change of direction in what chartmakers call "the curve"; also because, like the steel trade figures, it disposes of the idea that the huge midsummer business was only the forerunner of equally unprecedented activities in Autumn. Mr. Mitchell is quite correct in contending that a break in stocks need not be deemed. alarming when it occurs with trade conditions "fundamentally sound," despite some slackening of activity. Still, if the stock market's extravagances last Summer were stimulated by talk of a similar "boom" in Autumn trade, then discovery of the real trend of business may have had its influence.