The Washington times., 1929-10-19
BEARS SLOWLY !
DEPRESS
STOCKS
BY w. s. COUSINS

BY w. s. COUSINS
NEW YORK, Oct. - UN.S0.---
The severe drop in stock prices this
week on all of the important ex.
changes Of the country goes a long
way toward confirming the bearish
viewpoint of the experts who have
been pointing out stock market
trends since the middle of the sum.
mer.
Instead Of the bull market about
which so much has been said and
written, according to these econo-
mists, we have been witnessing the
progress of a slow and silent bear
market, which has carried values of
the best stocks from 80 to 80 per
cent below January's price range,
wiping out equities by the billions
Of dollars, and effecting the forced
departure of thousands OF traders,
big and little, from the market.
Long Down List
With United States steel down
so points from January's price;
Allied Chemical down A, American
Can down 25, Brooklyn Union Gas
down 40, American and Foreign
Power down 55, Consolidated Gas
down AZ; International Combustion
down II, Canadian Pacific Railroad
down so, Chrysler Motor down So.
New York Central Railroad down
3s, General Electric down 81 and
from 30 to 70 stocks recording new
lows almost every day, while a
scant half-doZen or more "personalIv
conducted speculative favorites
push into higher price ground, it is
not easy to detect any OF the usual
Slsh'poSts of bull market.
Call 1t what you villa secondary
reaction In a bull market. a Green.
ing bear market. a silent panic. A
distribution period In bull mar.
ket--there is little doubt that the
ranks OF the bSars have been con.
siderably swelled in the last two or
three weeks, while investment buy
ing has frozen up in important
quarters. Brokerage houses have
reported preponderance Of selling
over buying demand among small
traders. which means that the
wtping out of their slender margins
has compelled the little bulls to
unload. If not to drop out of the
race for keeps.
Steel Decline
Reviewing the week as q whole,
it Is easily to be seen that the
bears in the stock market had the
better OF the argument. A per
cent decline in steelingot production
was reported simultaneously with
the sweeping reduction in steel buy
ing by the automobile manufacturers
TO the lowest volume in IL months
Some huge steel orders were placed
by the railroad companies. but these
were not sufficient to offset the
shrinkage in motor-steel demand.
The automobile heads assert that
the cessation Of steel buying Is only
temporary, and necessitated by the
slowing down OF production plants
to permit OF absorption Of cars al
ready in the dealers hands and to
prepare new models for the automo-
bile show in January. Piling up of
money In the New York banks has
also been regarded as an unfavorable
commentary on business and indus
try in general, since it suggests q
lack of use for this money. A 5 per
cent call loan rate sounds the death
knell Of bootleg call loan money, and
WILL if continued, force millions of
dollars back to the bond market and
to other channels of occupation.
On Blue Chip Seal
The slump in prices this week was
largely confined to the blue.chips OF
the untility and specially stocks
Many of these issues had been forced
to absurd heights. where they bore
little or no reasonable relation to
present earnings or nearby pros
poets OF the corporations standing be-
hind them.
There can be little justification for
boosting a stock to twenty-five times
its annual earnings Of the corpora
ton by which it Is issued and hardly
the shadow of a lame excuse for
market ma nipulation Of stocks to 100
times annual income. The result
cannot be other than disastrous to
small traders and margin buyers. as
the 30 to 100-point slump in prices
since the first week in September
amply demonstrates.