Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-09
FEDERAL RESERVE
PROvESSTAB|L|zER
Powerful Efforts of Bank,
Exerted in Recent Crisis,
Checked Panic.
BY JOHN F. SINCLAIR.
Il nisnatch to The Star.

BY JOHN r. SINCLAIR.
Special Dispatch to The Star.
NEW YORK, November 9-The
stocks of about 1000 corporations are
listed on the stock markets of the coun-
try. About half of these corporations
have their stocks listed either on the
New York Stock Exchange or on the
Curb.
When it is realized that in less than
two months there was a decline OF
slightly over 40 per cent in the general
list of industrial and utility stocks, both
the extent and basic character of the
decline are evident. History will record
the stock price decline of this year as
the most precipitate, violent and rapid
ever known,
Look at a few of the declines in the
past One began in June, 1901. Prices
moved down until November, 1903. An
other started in January, 1906, and the
price decline kept up until the Fall Of
1907. Another one began in September,
1912. This was a long one. 1t lasted
until December, 1917.
The decline Of November, 1919, was
not completed until July, 1921.
In all of these declines the extremes
were all between 40 and 40 per cent.
When the events of the past two
weeks are recorded the work of the
Federal Reserve will stand out. The
large volume of Federal Reserve credit
which was pumped into the market
was unprecedented. All records were
broken. Federal Reserve credit in
creased $4,000, 900, of which $780,
100000 represented additional redis-
counts and $117,000,000 was used to
purchase Government securities anu
acceptance bills in the open market.
The Federal Reserve never changed
its policy. But, unlike other days, 1t
said nothing about the part it was
taking in the crisis. That it was the
most important factor in meeting q
very serious situation now can be said
with confidence. Without its aid a
serious financial panic could hardly
have been prevented.
Representatives of 20 nations are
meeting in Paris under the auspices
of the League of Nations in an at
tempt to iron out some of the
more embarrassing questions that arise
when foreigners are living abroad, Ia
Guiding our old and ever-present
friend-double taxation.
Thousands of American business neil
and women, living abroad, are con-
stantly embarrassed because OF the
foreign" problem which always arises
through living outside Of the United
States.
The attitude of landlords toward
foreign tenants is one subject up for
candid discussion. In Paris and other
French cities the problem has become
extremely annoying.
But Americans are not the only "for-
eigners" interested. Italy is vitality con-
cerned. She resents today the efforts
of the French to make French citizens
of her people who reside in France be-
cause of better economic conditions.
More than a million Italians are in-
volved in this matter. France, anxious
to increase her tax revenues, has raised
many determinations regarding for
eigners living within France.
Sixty protests have been hled at the
ministry Of finance by American sub
sidiary concerns In France against the
nef federal system of imposing double
taxation. It is estimated that an addi-
tional annual fiscal burden OF $4,000
900 will be added to the tax burdens OF
these American concerns. Many OF
them are figuring, should the legisla-
ton pass, on closing up and turning
their business over to be handed by
French agency.
The American Government is repre-
sented in the conference by George A.
Gordon, first secretary Of the American
embassy in Paris.
1.-THE little fellows did get cleaned out.
Correct. But the big fellows always
walk in after the little fellows are
through. 1t ought to be closed up" says
an irate reader from Nebraska:
The big fellows were scorched, TOO,
and badly scared. Brokerage houses
showed no respect for the size Of margin
accounts in the crisis Of the last two
weeks. When the margins were impair
ed, the accounts were closed out IRE
spective of size.
Let me give you one Illustration. 1t
came under my observation. Tnree
weeks ago a New Yorker told me tnaI
his equities in the stock market tnsn
we're approximately 81, 100000. ne
named certain stocks that he thought
were good to buy. He had stock profit
of nearly 100000 In the last three
years.
When I asked him why he did not
realize on his profits he said that the
Federal taxes were so high that he pre-
ferred to carry the stocks and sell them
OF gradually.
Then Black Thursday arrived and his
equities melted away, for he, too, was on
q margin. His broker asked him for an
other $780, 900. He got it together with
difficulty. It was all he could do.
crashed again. his broker demanded an
other 100000. He could not produce 1t.
So his stocks were sold at the market
and he, too, was cleaned out.
Yes, the big fellows on margins have
found the sailing just as hard as the
little fellows. II one takes the long
chance he must expect to suffer In
such times. For the principle, whether
it applies to an account of $1,000 or
SIC, 000, 900, is exactly the same.
Europe is taking rapidly to the
"talkies." Every country reports that
a great part of its new building con-
struction at this time is in mammoth
picture palaces, now being built in the
larger cities.
An American sound reproducing firm
has just signed a contract for the in
stallation Of its equipment at the new
Odeon Theater of Milan, Italy. This
theater Is being erected by group OF
wealthy italian manufacturers inter-
ested in the cotton and silk trades. 1t
is expected to be one of the most beau
tiful and up-to-date theaterS in Europe.
The ground floor is given over to the
theater, which will have about 1000
seats. In the basement a music hall is
being designed capable of seating 1900
people. Nearly all Of the exterior. as
well as interior effects, are of Italian
marble.
other cities-Berlin, Paris, London,
Brussels, Dresden and Rome among
them-nave plans for new "talkie''
theaters which will compare favorably