Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-24
IN STOCKS
HEARTENS STREET
Traders Feel Storm in Mar.
ket Has Passed-Re.
covery Pronounced.
BY CHARLES F. SPEARE.

| Each mas played an important part IN
re-establlshing securities in public ia
vor and In quieting the distrust and
fear that played havoc with prices
week ago.
Stocks have now had a substantial
recovery. The industrial averages are
! so points higher than on November 13
The rail averages have advanced about
| 20 points. The former group Is higher
/ by nearly 20 points than it was on Oc-
tober 30, the day of greatest losses in
| individual issues. In general, the mar
ket has rallied an average of about &c
| points after its decline of $50 points, or
| nearly so per cent, in less than so days
In the two sessions after the break on
october 80 the recovery was also vio-
lent. Then the market was far from
being liquidated Now distressed selling
seems to have been completed.
Readjustment Is Rapid.
The scenes on the Wall Street stage
are being shifted so rapidly that 1t is
sometimes difficult to follow what is
taking place there: The transition af-
| fectS not only stocks but bonds, money
rates here and abroad, and bank loans.
Investment securities that were u1sal-
able 10 days ago are now unobtainable.
Brokers' loans to the extent of $6,804,-
900 900, which, on october were COM
handing interest rates of from 8 to
10 per cent, have been cut down to
$685., 00O, 900, on which the official rate
is AZ per cent with plenty of money Of
fered at 3 per cent.
In such well organized center as
Wall Street, It is hard to keep step with
readjuStmentS of such far-reaching ma
ture. Their effects spread out over the
entire world and have been visible this
week in reduced rediscounts by the Bank
OF England and by other banks of issue
on the continent of Europe.
From all indications the crisis in the
stock market is over. The recovery
there has been sufficient to relieve
situations Of an acute nature and permit
them to be worked out later on and in
calmer atmosphere. After making
wide speculation in stocks. bankers have
been able to get control of an ugly
market situation. For this they should
have credit equal to the justif1able
criticism for their neglect to stamp out
the fire when it first broke into flame.
Industrial Problem Foremost.
The important problem now is with
industry and with the proper methods
to be pursued to Offset state of mind
on the part of producers and consumers
that is entirely natural in a country
that experienced in so brief a period
such an enormous shrinkage In its
potential purchasing power.
1t is just as foolish and to as little
purpose to deny that the stock market
collapse has affected the public attitude
toward what 1t buys as it was to pro-
claim few months ago that prices of
stocks were justified by what they
would earn in the next two or three
years. The fortunate fact is that all
of the industrial and banking elements
that were weak in other crises are the
main props Of the present situation. SO
1t is possible to look ahead to period
Of renewed progress and OF generally
Sounder business situation after the
immediate but pronounced effects of
the speculative collapse have been alb
sorbed and are not so much in the
public mind.
To a certain extent business can be
stimulated. The opportunities for this
have been greatly increased by the
release Of money previously employed in
securities. The very fact that interest
rates are now low encourages construc-
ton and expansion that had been re-
tarded by inability to borrow at rates
that would show a profit on new capital.
Public works have been postponed be-
cause there was almost no market for
long-term State or municipal bonds.
Today there is a sellers rather than a
buyers market in municipals which
should bring forward programs that
have been deferred for over a year.
Railroad Financing Aided.
Recently the strongest of the rail-
roads could not sell their short-term
equipment certificates, than which
there are no better corporation securi-
ties outstanding, except at per cent
basis. The rapid reversal in money
market conditions makes 1t possible for
them now to market long-term equip
ments close to a per cent basis. The
| aid which the carriers could give TO
the present industrial situation would
| be infinitely greater from relief given
| by the Interstate Commerce Commits
| sion from the uncertainties Of CONSOLE
| dationS than from carrying out pro-
posed plans for additional purchases OF
| equipments and contracts for new con-
struction, both of which have already
been considered in official budgets.
Public utility expansion will be en-
couraged by cheaper money. Here also
| an industry has, to some extent, held
| back by the difficulties of financing
with mortgage or debenture issues Of
| with preferred stocks Some sections
| of it were also affected by the specula
| tive mania which diverted attention
| from its main functions to that OF
mergers, in which the prospective
profits we're to be had from securities
rather than from operations in the
| power and light field Less will be
! heard of such developments after the
sad experiences of promoters of new
public utility holding companies. 1t is
| also doubtful II there will be the same
! momentum toward chain banking as
| in September, now that the securities
of bank holding companies are at such
a great discount.
Real Estate Comeback Slow.
The improvement in money cannot
| for some time restore the real estate
market to its former healthy basis
| Conditions In the construction industry
| the past year have reflected overbuild-
| ing and an overcreation Of real estate
bonds more than high interest rates
! So long as the supply Is so much in
! excess of demand, the effect of the
| downward trend of interest rates will
only be to alleviate conditions that
cannot quickly be corrected. 1t will
| take some weeks to discover whether
there is also an oversupply in lines
! other than automobiles, radios, furs
rugs. jewelry and similar products
which move out rapidly when the pub
lie is, or feels it is, prosperous.
The extent to which investors ma!
abandon common stocks for bonds L
one of the interesting sequels Of thu
recent market panic. So far, large
part of the buying on which bone
| prices have advanced has been fol
dealers, who are building up their list:
In anticipation of good year-end trade
| They have the advantage of relativel!
cheap money, limited supplies of high
grade issues and the certainty tha
many individuals who had a good scar
in the stock market will now revert t.
first principles in investments. One O
the significant sidelights In this situa