Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-10-14
Distribution GAIN
is SHOWN IN MONTH
Record DiscIoses Increase in
List of Purchasers of
Securities.
ny CoRRINGToN GILL.

Distribution. as applied to the Stock
Market Is one factor that is measured
more or less accurately by data avail
able to every investor and Spectator.
Brokers loans, as released by the
Federal Reserve Board each Thursday
afternoon. and by the Stock Exchange
around the third of each month, loans
to customers other than brokers con-
weekly statement of reporting banks,
and changes in the value of listed
stocks are probably the most useful
data when properly applied for measur-
ing distribution.
AS comparativly heavy volume of
trading and distribution occur stimuli
taneously with speculative leaders soar
ing to new highs while the whole mar
ket, generally speaking, is heavy. the
volume of transaction and the breadth
of the market must be used to con-
firm the aforementioned data.
Values and Loans.
The transfer of stocks from strong
to weak owners is not necessarily ac-
companied by headlines such as
Brokers loans set new high records"
The change in stock values during the
period covered by the brokers loan
otdCeiHeuG AHuSG De TAKEN INTO CONSIDER
alton.
AS long as values increase propor-
tionately with loans there is no EVIL
dence OF distribution. On the other
hand, If loans have increased mate
rally during any given period of time,
while values have remained practically
stationary. 1t can be said with GER
tainty that securities have been sold
to the speculative public by those who
have either owned them outright or
who have had them hypothecared at
their bank. In either case, they have
gone from strong into weak hands.
Confirmation of such distribution can
usually be found in decreasing loans on
stock and bond collateral to bank Gus
toners other than brokers and in heavy
volume of trading.
There is but one conclusion to be
drawn from the present situation.
On June 6, Just before the reaction
which lasted throughout that month,
brokers' loans Federal Reserve figures)
stood at their high for all time S., $685.
100000, while loans to other customers
on stock and bond collateral aggregated
O3o.OO0,000. That much of the stock
sold during the reaction was purchased
with bank credit rather than brokers
credit is indicated by the fact that on
RAASCS WCIG dt tIlElT low.
brokers' loans had decreased over $500,
100000 while customers loans had In
creased $200,000,0 900. Broadly speaking,
stocks had passed from weak into strong
hands.
During the rise in August loans did
no more than keep pace with increasing
values. September, however, witnessed
a slight increase In values, while
boxers loans increased over $500. 900. =
900, according to the Federal Reserve
figures, and by over $3.50, 900 900, ac-
cording to the Stock EXCHANGE figure.
Those who borrow directly at banks on
either stock or bond collateral reduced
| their loans by nearly 800, 900, 900 DUR
ing September.
Trading Increases.
The volume confirmation of distribu-
| ton is not lacking for last month,
| After three months with about $4,000, 900
| shares traded daily on AVERAGE
| Including Saturdays the September
| figure leaped to 3.700.0O0 shares. An
/ index of cun1ulated plus and minus
signs kept by the writer to gauge the
breadth of the market also showed I'm
n1istakable signs Of distribution during
the month.
A decision to sell stocks must rest on
more evidence than distribution. # Is,
however such an important factor that
Il is studied closely by every one In
terested in stock market movements.