Evening star., 1928-05-05
YOUTH HAVING WAY
IN STOCK TRADING
"0Id- Timers" Are Confused.
Young Men Defyng Fed
eral Reserve Banks.
Special Dispatch to Tho Star.

NEW YORK, May 5.-The scope OF
the stock market, both in It's size and
its range Of prices, It's indifference to
former measurements of values and to
credit influences, and the optimism ex-
pressed by Spokesmen for the present
campaign is confusing and often un-
ineligible to those with background
of Wall Street experience
II a dozen bankers and stock ex-
change members were to be brought
together to discuss the present specu-
lative situation half OF them with
Street experience Of from IS to IS years
would be found conservative and visibly
alarmed. The other half. whose inti-
macy with business and speculation
dated from the ending Of the war,
would be confident and fully expectant
of markets of even greater size and of
higher prices than have so far been
developed.
Young Men at the Wheel.
It is an axiom in Wall Street today
that to be old and to be obstinate is
costly The market is one mainly pro-
NOTED by young men, with new ideas,
new visions of business opportunities
and with the reckleSSness that goes
with youth. They do not fear the fire
that has not yet burned their fingers
and see no point in applying old pre-
cedentS to the present situation. They
would rather play with Radio Corpora
ton stock at 100 than with American
Telephone & Telegraph stock at the
same price, regardless of the fact that
Radio pays no dividend, while Tele-
phone pays per cent. Certainly the
former corporation Is in no better posi-
ton to take advantage OF discoveries
IN air communication than is the
latter and has made no more progress
In this field.
Similarly they will buy a stock like
Texas g. Pacific at 140 and ignore
Pennsylvania Railroad stock at the
same price, though the one has never
paid a dividend and occupies an indif-
ferent territory, while the other pays
per cent, has paid high rate for near
~ three generations and criss-croSses
the most densely populated and most
actively developed Industrial section Of
the United States. Many more COM
parsons of the same sort might be
made from the list OF industrial and
railroad stocks.
Novices Reap Fortunes.
Those who have been wrong on the
market for the past SIX months and
frankly admit II are beginning TO feel
that there Is something the matter with
their judgment With their experience
and their knowledge of intrinsic values
they have made no money, while the
novitiates in speculation have coined
fortunes. Naturally they are beginning
to have a strong itch for speculation,
and are trying TO revise their opinions
so they will be more in line with those
of men who have been successful.
It is poor time TO start in TO pluck
the market fruit. A good deal Of 1t has
lost its favor and is beginning to be
pithy. Whatever may be the course OF
prices during the next three or five
years-and intelligent students OF con-
ditionS say they will be TO higher
level--it is nevertheless true that we
are Just now In the gambling stage Of
a bull movement. and that those with
the best Judgment of securities have
left the market TO a public that buys
because 1t sees quick profits and has no
intention OF making long-term In
vestment at the present price level.
Federal Reserve Is Defied.
The members OF the Federal Reserve
governing bodies are a silent group of
men. Upon the witness stand they oc-
CAaAOllAlAy ulhAC SOIttE GpAAtNlGAAt tAt4t 40
Illuminating and significant Their
public remarks are occasional and
somewhat trite. 1t would be interest
ing to look into the composite mind
OF this body and discover what mental
or emotional reaction there had been
TO the fact that the stock market has
almost steadily advanced ever since the
discount rate was raised from to Ala
per cent In five of the reserve districts,
with call money at 6 per cent. time
money at the highest average for this
season In five years, 1885 100000 OF
Government securities realized by the
Federal Reserve Banks in order TO
tighten money rates and rediscounts In
creased about 1892 100000 in the last
three months.
The element in control of the mar
ket has, In effect. said to the Federal
Reserve Banks, Go TO -" There Is
a good deal OF bravado In this attitude.
Eventually ID will come q cropper. II
Is among the amazing and confusing
features of the situation that an older
generation does not understand and by
which 1t is alarmed
Market at Highest Average.
Since June /, 1927. there has been
an appreciation in the market value of
about 220 active stocks, in II different
groups of between $500. 900. 900 and
S6, 900 ,00000 This weeks statement
of brokers' loans indicates they are now
81, ,908, ,000 900. This represents an ex-
panSion OF Sl.450.000000 in the past
year, or about IS per cent Of the amount
Of increase that has taken place in only
one-third OF the stocks regularly dealt
in on the exchange. Brokers loans are
also affected by what goes on In the I'M
listed markets for stock as well as in