Evening star., 1928-12-31


scarcely be neces- E
Sary to review in ~
detail the charac- 4sA
teristicS of this
most remarkable of C.orrs r uv~bs,
all Spe ulations.
The stock market has been on every
ones tongue from January to Decefl-
Der. It has been discussed publicly and
privately by those well informed and
by those not informed at all: it has
been featured in the newspapers and
the magazines, preached about and de-
bateC about and even cartooned. No
market ever had so much publicity as
this one. Its story is so well known
that it hardly seems essential to retell
1t here, but SOME analysis must preCeGe
attempts to solve the two pending prob
LENS.
Was It Period or Comma?
The two points OF vital interest are:
First, whether the punctuation mark in
the December market was a period or a
comma as 1t was in June; and. second,
whether the stock market in 1928 diff
fered from its predecessors in kind or
only in degree. In other words, is there
new era in speculation as well as in
investment or is it the same old process
simply magnified enormously?
Let us take up the second of these
Two questions first. There is no doubt
about the market differing in degree
from other periods of rising prices. In
volume the transactions were far great
er. On Friday, November 23, the days
sales reached the total of 6,942, 500
shares, the greatest for all time. On
Saturday, December 8, the turnover was
3,744,900 shares, total for two-hour
session not matched before that time.
In the last two months of the year
000,000-share days were common.
When the total fell under that amount,
the market was said to be dull. and yet
only year ago a 5000, ,00O-share day
would have been deemed extraordinary.
More issues were dealt in than ever be-
fore. Listings were larger and the mar
ket was broader.
Exchange Facilities Swamped.
Human and mechanical facilities for
conducting this unparalleled speculation
broke down repeatedly. It was neces-
sary to close the exchange every Sat
urday during the month of May to en-
able brokers to catch up with their
bookkeeping arrears. In one week dur
ing the latter part Of May an hour was
cut off the trading time so that the
Stock Exchange closed at in the after
noon instead of at 3, also for the pur-
pose of giving time TO post the books.
Similarly, in November there was a
Saturday holiday necessitated by the
food of buying and selling orders.
Every device possible was employed
TO enable the ticker, the machine
that records transactions, to keep UP
with the market on the floor, and while
progress was made the effort was only
partially successful. The first move was
to drop everything but the final figure
OF quotations, and when that proved in
adequate, the figure representing the
number of shares was dropped. The
idea was to give traders who buy and
sell by the tape" chance to know
how they stood.
In the biggest markets of the year,
however, the tape still fell consistently
behind On November 20 the last sale
vas printed on the tape at 5:42 o'clock,
almost three hours after business had
stopped, This was before the figures
for volume had been dropped. After
that expedient had been adopted, the
largest lag was on December 8, when
the last sale was printed "A minutes
after the close, and that in a two-hour
session.
The prodigious amount of money bor-
rowed to finance the market is another
indication Of its record-breaking char
acter. Week by week Federal Reserve
compilations and month by month the
Stock Exchange reports showed brokers'
loans steadily advancing toward higher
levels.
Mania Seizes Whole World.
While statistics do not apply, 1t is In
order to say something about the hold
the mania took upon not only the
United States but the entire world.
Stocks were bought by residents of every
large city in the United States, by a
certain number in all the great capitals
in Europe. One large wire house one
day during the peak of the excitement
received a 10,000-share buying order
from South Africa. A passenger on
the Graf Zeppelin on the return of that
airship to Germany radioed his buying
order to his broker in New York.
But it was not simply spectators
and investors with sizeable resources
that plunged. They were. of course,
the important factor in making the
market, but they were not the only one
Men and women of small means drew
their money from the savings bank to
buy stocks. People who never dreamed
of speculating before were dragged into
the whirlpool. It may seem trivial and
yet it illustrates the all-embracine
character of the craze to cite the story
of two young women who had heard
about every one else making money IL
the stock market and who took few
hundred dollars apiece TO a real estate
Office, thinking that any kind of broker
could buy securities for them.
Now all these figures of magnitude
all these details of the worldwide ex.
tent of the speculation prove nothine
st all as to the market being different ir
kind from that in other bull markets
They simply show that the world Il
larger, communications are better es
tablished and that information q
pseudo-information about financial af
fairs is more widespread. There i
nothing here to demonstrate that th'
1928 market was anything but bull
market such as has been seen man,
times in history, only on larger scale
"Ncw Standards" Hailed.
Of course it was said time and TIM
again while prices were going up tina
new era had arrived, that old standard
of values had been discarded, that tn
Federal Reserve System had mad
panics forever impossible, even tha
there would never be again any yiolen
collapse. Such arguments are hear'
in every bull market. They soun'
plausible at the time, but somehow the
seem to lose their force when value
melt away in a single session.
In one or two respects, however, ther
was something new in the market c
1928. something that other markets ha
not witnessed. For one thing, the oil
and long venerated theory that bond
were safer investments than comno
Stecks was rudely assailed. Propagand
Ii favor Of the stock and against tn