Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-23
ISTOCKS co HIGHER
| IN STEADY MARCH
Weeks Operations on Ex.
change Marked by Bid
Advance in Prices.
BY CHARLES F. sPEARE.

business 1t Is TO buy and sell securities
and that other group who from their
position In the banking world are able
to anticipate coming events in corpora
ton fairs have been the agencies
through which the stock market mas
made most of Its advance since the
May liquidation eliminated. Their
operations have been more intelligen'
than earlier ones, rs q review OF the
recently prominent shares will show.
The market has been under pro-
fessional control rather than In the
hands Of the public as it was through
out 1923 and in the first quarter OF
1929. This explains the comparatively
small volume Of daily transactions, al
though groups Of stocks have been
rising with nearly as much swiftness
as they did when business on the stock
exchange was double that Of the pres
ent. It Is not the season when the
public takes an active part In specula-
ton. It may be enticed into it If prices
continue to rise as rapidly as In the
past two weeks.
Attention on Few Issues.
An analysis of market results recent
ly reveals some interesting facts. OBJ
viously attention has been concen-
trated on q limited number Of issues
The rise in them has been sensational
It has distorted the price average, max
ing them appear more bullish than
they are actually.
Separating the public utilities and @
few Of the industrials from the general
list, we ind that, although the indus
trial average now Is quite as high as In
May, prior to the slump in the latter
part Of that month, there are many
other groups Of stocks whose current
quotations are much below those OF
the crest Of the Spring rise. This In
cludes the coppers, the automobile
trade mark, chain store, oil and farm
implement shares and those Of the ma
tional distributing concerns.
It was in this class Of stocks that
the public made its greatest speculative
adventures and on which the heaviest
borrowing to carry its securities took
place. In lquidating them to more
reasonable price basis, brokers' loans
were reduced over $500, 000, 900. These
loans stand today, even with this
weeks increase of $136.000, 900 nearly
$375 900, 900 below the figure represent
ing the public's maximum market COM
mitments.
Money Situation Eases.
Another evidence of the change In
the character Of the buying since last
Winter and last Spring IS the compare
tive ease In money rates, although we
have o market average for industrial
and public utilities exceeding any In
financial history. The average rate for
cali money 50 far this month has been
between 6h and per cent, or lower
than for any like period this year. The
smallness Of the market accounts for
this. Although the price average Is
high, Wall Streets daily requirements
are comparatively low. The money sit
uation has adjusted itself without the
enforcement Of Federal Reserve ma
ctinery to produce an easier credit stu
alton. In fact the Federal Reserve has
for several weeks been reducing its hold
ings Of acceptances and Government Sc
curitieS until the combined items are
so per cent smaller than q year ago;
those Of acceptance lower than they
have been for nearly five years.
There Is no question that the market
needed to be liquidated and restored
to q healthy basis last month. While
this naturally imposed financial hard
lowing the professional "tipsters," II
has not greatly injured the investors
who either owned their stock outright
or had q substantial equity In them
The demagogic talk Of the counties,
thousands Of small investors who lost
their all' In the May decline, blamed
on the Federal Reserve, Is entitled Il
about as much consideration as ex.
pressions Of sympathy for those who
lose their money In betting on the
wrong horse.
Discount Rate May Go Down.
The next important step Is to keer
the market under control and to pre-
vent, II possible. the exploitation Of
shares that represent moderate equities
but which In the hands Of conscience
less manipulators can be made to look
like promising gold mines. There are
already intimations that instead of ar
advance in rediScount rates there may
be Q reduction in August There is
surely no reason to anticipate q pei
cent rate Of rediscount with time money
declining and now for the first time
this year below per cent and gold
coming into the country on a fairly
America.
The balance, however. between the
present money rates and q level that
would compromise those who are COM
mitted to another broad speculation In
stocks Is . delicate one and might be
thrown out quickly should the market
broaden into 100000 or 5000, 0OC
share sessions and stocks jump rapidly
from day to day.
II speculation can be controlled, It
may be considered advisable to reduce
the rediscount rate to effect q revival
in investment securities. There has not
been Q year within the memory of the
present active generation when so little
interest was taken in anticipating July
! disbursements by purchasing bonds
or preferred stocks. The bond market
holds steady. That is all. Short term
issues have improved as the call money
rate has stabilized around per cent
and long term funds have reacted. The
best illustration Of this Is to be found
in the new United States Treasury 5M
per cent notes which were issued q
week ago at par and are today quoted
at q premium Of about "a. Various
forms Of corporation paper, such as
railroad trust equipment certificates,
have also stiffened. There Is more en-
couragement now than a month age
for municipalities going ahead and SELL
Ing long term bonds rather than taking
recourse to short term notes. When q
strong industrial concern, however
finds 1t necessary to give stock pur-
chase warrants to the buyer Of Its flrst
mortgage bonds, as happened this
week, 1t Is clear that new era In in
vestmentS has been entered and that
radical departures from former methods
Of issuing and distributing fixed interest
obligations will be required in order
that they may be successful competitors