Evening star., 1928-04-21
TRADE IN STOCKS
SLOWING DOWN
New Groups Brought to
LimeIight-Curve of Prices
More Ragged.
BY CHARLES r. SPEARE.
to The star,

BY CHARLES r. SPEARE.
Special Dispatch to The star.
NEW YORK. April 2l.-~New fashions
i'll stocks have replaced old ones this
week. with the latter discarded for the
season. This is the only visible change
in a speculative situation that today
attracts greater public interest than any
other phase of American life,
The speed at which the market Is
moving is not quite SO high as 1t has
been Transactions have again dropped
below the 1000 000-share mark. The
curve of prices is more ragged than 1t
was in March or in the first half of
April The general average today is
not far from that of last Saturday.
During the week there were a score
or more shares that exhibited the effect
of prolonged campaign. They were
off s to IS points from the highest of
the year. They had a fagged-out ap-
pearance. being churncd about SO much
that they had lost their vitality. IT is
enough to say that since January |, the
entire capital stock Of the Radio
CORPORATION has been turned over nine
times and that Of the iT,400.000 shares
Of General Motors and 7.l10.000 shares
of United States Steel common. SO per
cent of the one and IS per cent Of the
other have changed hands thus far
in 1928
New Stocks in Limelight.
II has been necessary TO introduce a
new group of stocks 10 a public over
familiar with the old leaders, reserving
the latter for occasions when the Others
failed 10 do their respective parts. This
has given the oils. public utilities, cGp-
pers and few Of the rails an oppor-
tunity TO demonstrate their worth. 1t
reminds one of the substitutes that the
foot bali coaches send into game in
the last quarter so that they may win
The coveted varsity letter.
The power of the captains of Specu-
lation has not vet been broken. 1t Is
gradually being reduced. The public is
becoming suspicious Of the tremendous
milling about in selected issues and is
wondering If the well advertised pro-
moterS of these movements really keep
all of the stocks they buy; also the
public is being made to feel the cost of
its speculative pastime in rising margin
requirements and higher month end in
tereSt charges. The fact is worth re-
Deating that a market of low average
stock yields may run on from month to
month, but 1t is all the time wearing
itself out from lack OF nourishment in
the form of return that exceeds the
carrying cost,
Conditions Similar i'm 1890.
Except. that imitation then was in
commodities and in merchandise and
now is In securities. the conditions in
1920 parallel those of 1928 and require
the same scrt of cure. The necessity Of
floating many billions Of war bonds led
to a Treasury policy Of low interest
rates. This was established by Secre-
tary McAdoo and carried through the
period directly following the aTrnisticc.
It resulted I'm Nationwide speculation
in commodities argi in the end, series
of business disasters and threatened
hank failures.
In January, 1920. there was the same
sort Of anxiety over credit expansion
as has recently prevailed. Conditions
were then more acute than now, for in
addition 10 domestic troubles there
were those involving practically every
other nation In the world. 1t was urged
on the Treasury Department and on
The Federal Reserve Banks that they
exert pressure ON speculation through
the medium of higher discount rates
NSkE aEiANlAA1A 4A 00 l188&. &42d4"
~ they were compelled To take action
The discount rate was raised from 414
per cent 10 per cent. later 1t was adj
vanced 70 per cent. Ii took some
time for the rate to become effective,
Those who were specuiating scoffed at
II as they are now scofiing at the eff
forts 10 stop imitation In securities be-
fore IL becomes a menace to the cOun~
try'S business. Eventually the COM
modify markets we're iiquidated and re-
turned 10 a normal basis.
War Debt Plays Part.
Ii Is of interest TO note that the
present situation Is the product Of pol
icies similar 70 those Of i9i8-20. but
that where. In the first instance, low
interest rates were enforced In order
To distribute Liberty bonds at Ala per
cent, they have i'm the past year been
established for the purpose of effcc-
lively refunding these same bonds into
others with lover coupon rate Thus
we have had la the past decade two
periods Of dangerous credit imitation
growing 0ut Of the creation Of our war
debt and its retirement
Secretary Mellon cannot escape crit
icism for the part he played In this
latest episode In national finance. nor
can the Federal Reserve Board mem.
berS who have stuhbornly resisted the
opportunities or those advocating
higher discount rates for weeks past
Business Running Smoothly.
In spite Of the absorption Of public
interest and bank credits in speculation
the course Of business is running m0re
smoothly. Steel production is At high
8ssssK a Sta$f3 sskt 4
factory figures of March Nearly all Of
the leading automobile companies
should show excellent earnings for the
March quarter. in spite Of intense com
petition and price cutting. The orders
received by the General Electric Co. for
the first three months Of this yeas
amounted 10 nearly $40 600 600, conf
pared with S77.500,000 In the first quar-
Ter Of 1927.
Thftg~tnfee chain store companies
did a gross business in the first quarter
of 1923 Of S297 $50 .203. against S25i.-
39l .s9d In the same period last year, an
increase of over ID per cent. In tns
month 0f March alone these concern3
gained nearly ~ per cent II Is eSti~
mated that on the basis Of electrical
energy consumed. industrial activity in
the first quarter of this year was about
Az per cent ia excess Of the year pre-
gi0ns
The Improvement In oil shares fol-
lows better prices for oil In some dis
triets and considerably larger profits In
others on sales Of gasoline The pro-
duction situation does not improve a
great deal from week to week The
small companies viii be hard pressed
again this year. bat the larger ones
should RnTW HuaIgl nf "a uatF over
1927 10 warrant a return Of confidence