Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-27
|N|NE-MONTH GAIN
| IN MARKET IS LOST
Twenty Per Cent of Value
Sliced From Shares in
Selling Orgy.
BY CHARLES r. SPEARE.

period of speculation for a rise when
those who have been buyers with one
accord attempt to sell and find 1t i'm
possible to do so except at a sacrifice
of most of their profits. This is usually
attended with a tremendous volume OF
| transactions, intense excitement and
rumors of trouble. which eventually
to inspire confidence and check liquida-
ton.
These varied phases of the market
we're exhibited on Thursday this week
! when conditions approXimating those
of 1901. 1907 and 1914 developed.
! Unlike other days of panic, however,
they were not intensified by high rates
of money, failures or emergency meas
ures such as the closing of the ex-
the brink Of the precipice and then
| turned back.
Nine Months Rise Vanishes.
In the past month, most OF the APP
probation in common stocks, or ed
Iities" as they are now popularity
| termed. created during the previous nine
months, has vanished. Approximately
| 90 per cent of the market value Of
shares listed on the New York Stock
Exchange has been sliced off in this
period Just what has happened may
best be illustrated by producing some Of
the declines both IN points and in
percentages that have occurred and
which are embraced In the composite
picture of an average decline of 10
points in SO selected stocks between
the high of the year on September 19
and the low of October "a
Group one deals with IL of the most
active and recently popular of the listed
public utility common stocks. practically
all of which are of the holding cor
poration type. The declines here range
from 40 points to ITO points. with an
average loss for the group of rs points.
Then there's are 10 similar stocks from
the New York Curb Market in which
the individual losses run from 80 to
100 points, with an average decline of
20 points. These % stocks, and prob
ably or 10 more, are the ones which
the public, the investment trusts and
the trading corporations bought into
most heavily during the Summer and
for which much higher prices were pre-
dicted as late as the middle of Sep
TENDER.
Trading Corpora tions Hit.
Group two Is represented by the
common and preferred stocks of trad
ing corporations and those that are
more conservative in their management
but still are not of a strictly investment
trust character. The average decline
in this list of Is issues is 81 points
but the percentage of shrinkage range
from 80 per cent to 10 per cent. And
more important even than this Is the
fact that in a majority of these stocks
this weeks price has been frequently
as much as 80 and 40 per cent below
that at which the public in recent
months was encouraged to buy them.
Next to the aviation shares no group
of newly created securities has fallen
so fiat as that of the trading corpora
tions, with most of the change in atti-
tude toward them dating from the day
that the Blue Ridge Corporation stock
was placed on the market. 1t Is
grave question whether the present
prices for many of these mushroom
securities growth are justified by their
break up value on the basis Of the
contents of their portfolios.
Group three includes a miscellaneous
list of stocks of leading American cor
porations which had come TO be
designated as the blue chips" of Wall
Street. That they were not immune
from the ravages of market panic is
evident from what has happened TO
them.
For instance, General Electric de-
clined 100 points or 80 per cent, Mont
Johns Evansville 100 points or AZ per
cent, Westinghouse Electric 1872 points
or So per cent, Case Co. 257 points or
SIS per cent, Radio II points or IS
per cent, United States Steel SO points
or 20 per cent, and Bethlehem Steel
So points or IS per cent, with Sears
Roebuck down 66 points, Simmons
about so points and National Cash
Register nearly 20 points. Anaconda
nf uh ch
600 were distributed considerably above
par, dropped to 81 compared with lao
earlier in the year and United Aircraft
declined 102 points or SIS per cent.
while United Corporation was off 60
per cent from the price paid by an
enthusiastic public last month.
Rail Stocks Show Vitality.
Group four, with IS units in it, has
to do with railroad stocks which we're
the last to advance this year, when they
showed belated recognition of the
value of the O'Fallon decision and a
progressive rate of monthly net oper-
ating incomes. In the weeks market
debacle they declined from ls to so
points under the high of the year and
an average of 81 points and were among
the flrst to make substantial rallies
after the pressure Of liquidation had
been lifted from the market.
1t is not clear at this writing whether
stocks have been sufficiently llquidated,
for most of them are still well above
the lows of the year in spite of the
extreme losses indicated above; or
whether more distress selling will have
to be absorbed before Wall Street again
regains its poise. As always happens in
such situations, thousands of Individuals
have lost all their paper profits and
more to boot. The liquidation, however,
which brought about the panicky con-
dition on Thursday was due chiefly to
the throwing overheard of the security
cargoes of pools, trading corporations
personal holdings OF half dozen OF
the most militant bulls in the East and
West.
Investment Trusts Cautious.
AS usual, there was a great deal of
salvaging by those who are always on
the ground when this work has to be
done: also an enormous amount OF cash
buying by wealthy individuals who have
been on the sidelines for months, and
have been waiting for just such OPP
portunities as this weeks break gave
them Undoubtedly investment trusts
employed to good advantage liberal
portion of the estimated $500 900 900
to $500 100000 of free cash which they
had in reserve In the call money mar
ket or in short time securities, in TAX
ing up stocks that they had the courage
to reject when they were offered to
them so to 100 points higher. In this
connection it may be said that the
prolonged poStponement of investment
trust buying as the market declined be-
tween September 10 and the end OF
last week was one of the factors CIV
ing holders of stocks most anxiety, for
it indicated that they did not, during