Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-22
'STOCK LIST MOVES
IN narrow RANGE
Traders Adjusting Operations
to Higher Money Rates.
Merger Movement Grows.

taken Wall Street and the country at
large long time to adjust its mind
and its speculative and commercial
commitments to a money rate 80 per
cent higher than normal This 1t ap-
pears to have done. Today there are
few indications. outside of the bond
market and in the field of building con-
struction, of contraction due to loanlng
rates that would have seemed prohibit
tive to borrowers year and half ago.
In like manner, familiarity with high
prices for stocks has resulted IN &C
quiescence to the extraordinary levels
attained by various groups OF corpora
ton issues which have passed through
various stages Of advancement until
they are now quoted from 100 per cent
to 800 and 400 per cent higher than In
the Summer Of 1928.
The present phase of financial I'M
reality, to which the business mind of
America is beginning to accommodate
itself, is that Of units of gigantic size
around which the successful undertake
lngs Of investments, banking, industry
as expressed in the output of raw ma
terials and their manufacture and dis
tribution. and in the fields Of electric
light and power and communications
are centering. The only major line so
far unaffected by the current passion
steam transportation. Here the in
hibition comes from Federal authorities
represented in the Interstate Commerce
Commission. Release from the chilling
influence of this body would quickly be
followed by railroad mergers equaling
those contaminated elsewhere.
Vast Corporation Projects.
An enumeration Of a few of the prof.
ectS made public within the last few
days gives an idea of the scope Of cor
poration activity and the extent to
which the material affairs Of the coun-
try are being vested in q comparatively
small group of men. Reference was
made in this dispatch a week ago to
the formation since the end of August
of investment trusts with total CAPT.
talization of nearly S40O 100000 follow
ing others of similar character in the
previous eight months with capital Of
81 ,800,0 900. Now comes a corpora
ton with 81 ,000, 000, 900 Of resources for
the specific purpose Of purchasing con-
troll Of a chain Of banks and admins
tering their affairs from common
center.
Following it in rapid succession was
the consolidation of two New York
mately $2,400,0 900 900, producing the
largest banking organization in the
world-on top of this the creation of
two investment trusts to function pri-
marily in the banking field and grad
ually to absorb chain of banks not only
in the metropolitan district, but in this
and other States.
Although the American investment
trust movement is only few years old, |
the big trusts are beginning to gobble |
up the little ones. More Of this will
a holding MES
in the public utility industry have been
engaged for some time in matching
their resources against each other and
in competing for operating concerns in
growing localities. They also have
combined for mutual benefit. This has
involved, from the nature of their bust
ness, the bringing together Of large
amounts of securities, some with free
market and others held in escrow, and |
giving these corporations the character
of investment trusts. Among the an !
this week was one to the |
effect that two such public utility hold |
ing companies, members of the same !
family, would merge, bringing under
single administration stocks valued in |
excess Of $2,l00, 100000.
Public Led into Market.
It is no wonder that the imagination
movements Of capital and that the ex-
pectations OF others like them should
lead to extensive operations in specula-
tive securities. They also act as eau
ton to those who, believing that the
present price level cannot be main
tanned, are tempted to sell the market
short" They have the further effect
of causing holders Of stocks .stubbornly
to resist all advice to sell them. There
q fV1Na rnt
at an extravagantly high average level
had tbs moral support Of such a large
numb? az contented shareholders.
The TACT that stocks have been NOV
ing in narrower price area during the
past month and that those who trade
in and out of the market are finding it
increasingly difficult to make profits
justifying 8 and 10 per cent interest
charges, Is overbalanced by the well adj
vertised success of pools in q limited
number OF issues and by the immediate
premiums at which so many of the in
vestment trust and trading corporation
shares have sold. There is a much
greater body today of free riders In
the market for new stock issues than
in. former times, when 1t was possible
to buy popular mortgage and debenture
bonds and realize a premium within "a
or 48 hours. This is responsible for
the unusual proportions Of trading in
securities on "when-iSsued" basis.
Unknown Equities Popular.
The fact that the public in many
cases is buying into a blind pool"
seems to attract to, rather than de-
tract from, given situation. It has
been proved recently that the stocks Of
trading corporations that do not expose
their portfolios sell at high premium
over those Of investment trusts which
have listed their shares and, conse-
quently, have been compelled to make
public the nature of their holdings.
Wall Street today is in the mood where
1T Will pay more for certificate with
an unknown equity than for one whose
value it can closely approximate.
This again Is one of the common
phases Of a speculative market that has
run on so long and with so few inter-
ruptions that the public becomes
hypnotized and can be made to act
contrary to ordinary good judgment.
Eventually it will have to pay the
reckoning. In some respects its mental
attitude now Is similar to that of 30
years ago when industrial combinations
were all the rage and there was no APP
parent top for the stocks of iron and
steel and copper companies.
Business Structure Sound.
The business structure shows no in
IAra