Douglas daily dispatch., 1928-01-06
HALF BILLION in
QUOTED VALUES
CUT OFF STOCKS

NEW YORK, JAN 5 (R)-Half bill
lion dollars in quoted values of stocks
listed ON the New York stock exchange
was wiped out today in sweeping re-
action inspired by the Unexpectedly
large increase in brokers' loans. The
days total sales of 3,404,100 shares
have been exceeded only once before
in stock exchange history, the record
breaking total of 3,785, 700 in the SEN
sational decline on March 3, 1896
EARLY declines of SO to Sc share in
standard indlistrials,t and considerably
more in a few specialties, were partly
recovered in the rally which followed
the lowering of the call money rate
from AZ to 4 per cent.
Spectators. for the decline, who
have been unsuccessfully endeavoring
to bring about a major reaction since
the first signs of business recession de-
veloped in some Of the countrys major
industries last spring, launched a SER
les Of vicious attacks against some of
the recent pool favorites. Midland
Steel Products preferred, which had
been bid up last year from LOG to 315
a share, opened at 274a4, broke to 252
and snapped back to 1854, off 14A
points net. Greene -Cananea copper,
which sold last year for less than $50
d, share, collapsed from an early high
of 15415 to 139, but rebounded to 1881
U. S. Steel common fell points and
rallied / which means net loss of
more than $1O,00O000 in market value
of the 5083O25 shares of stock out
standing. The net decline of 81
points in General Motors represents a
loss of $28,275,O0O in quoted value.
American Smelling, American Radia-
tor, American Tobacco, Brooklyn Edi-
son, Calumet and Arizona, Interna
tional Harvester and long list of
other recent speculative favorites
showed net declines of SO a share and
more. Rails yielded with the indus
trials; but. the losses were relatively
small
The announcement that stock eX-
change members loans had increased
4,O71 ,018 last month, setting a new
high record for all time at $4,432,907,-
321, or nearly equal to the actual
amount Of money in circulation in
the United States, brought flood of
overnight selling orders into the mar
on the floor were sWamped and the
ticker, which recently was speeded up
by a, system of abbreviated quotations,
quickly began to fall behind the mar
Eket.
1t was not. long before prices. estab-
Iished on the floor of the exchange
were a point or two away from those
being printed on the tape, causing
widespread confusion in brokerage
houses. which we're thronged with ex-
cited customers. The initial break was
followed by brief rally which gave
way to another violent decline before
mid-day The second reaction was
checked by the lowering Of the call
money rate to per cent temporarily
1quieting fears of credit stringency.
After the market closed, however, the
New York federal reserve bank, which
publishes brokerage loan figures of
member institutions, reported an in
crease of $92, 2,401, 900 in loans in the
week Nnded January f. bringing the
total to new peak at 90 BIO n23. 900
Speculative uneasiness over the
volume of brokers' loans arises from
fears thai federal reserve authorities
might regard them as excessive and
force their reduction by increasing re-
discount rates. :.
& No; change was made today in the
.31a per cent rediscount rate of the
New York federal reserve bank at the
weekly meeting of governors after the
close of the market.