Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-07
STOCKS DEPRESSED
ON SMALL VOLUME
IN WEEKS TRADING
Steady Liquidation Forces
Many Issues to New
Low Levels.
AVERAGES HOLD ABOVE
YEARS MINIMUM POINT
Securities Apparently Tagging Be-
hind Business, Which Shows
Slow Gains.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, December ct has not
been its volume but the persistency of
the liquidation that has caused discour-
agement to investors in one of the dull
est weeks of the year on the Stock Ex-
change. Many new low prices have
been established. The average of the
market still holds we'll above the bot
tom level of a month ago.
Reason for the new outbreak Of SELL
ing may be discovered in another acute
banking situation that was taken care
of" this week and was quite unexpected;
in lack of response to the advance in
iron and steel prices; in the increased
number of dividend reductions; in cum
ulative effects Of over year Of depres-
sion exhibited in statistics Of car load
ings, pig iron production and chain
store and merchandising companies;
and in tax selling that has been revived
since the suggestion was made that the
capital feature Of the income tax law be
repealed.
Nervousness over political conditions
in Germany and in France, and with
respect to the economic situation in
Italy also served to unnerve investors
and provide the professional bear ele-
Tuent with arguments for lower prices.
There is rather more of lag just
now in securities than in business. Pos
sibly this Is due to the fact that, in the
November rally, stocks outpaced the in
dustrial recovery that had begun to
show at that time. There have been
SO many false starts this year that Wall
Street Is suspicious of every sign of i'm
provement that lasts through three
market sessions and carries more than
five points in the averages.
December is an inopportune time to
promote a bull movement; more so this
year than ever when there Is such O
long daily record of effects on corpora
ton earnings of nearly 16 months Of
contracted production and falling COM
modify prices.
The moderateness of the selling in
dicates the degree to which stocks
have been nquidated. This Is eernphas
sized by the reduction In brokers loans,
which has carried over into the tenth
week. Prices of stocks are highly SEN
sitive to small Offering in the same
| way that bonds have been for the past
three months. Transactions in securi-
ties that have experienced the widest
| fluctuations recently have frequently
been of nominal amount.
Technically, the market becomes
stronger as the liquidation proceeds
and the liabilities Of Wall Street are
reduced. There is too much timidity
however, to gain advantage on that
score. Nor Is there leadership at the
present time to make capital of it. Wall
Street has never been so weak in organi-
zation to meet crisis as in the present
one. Nor has it ever had such a lack
Of strong men to guide it and give
commands.
Railroad Situation.
1t Is difficult, for instance, to conceive
! Of such a situation as has developed
in the Eastern railroad world, involving
! the Pennsylvania holding of the
Lehigh Valley and continuing through
weeks Of stubborn and unreasonable
| refusal Of compromise, had the elder
Morgan and the elder Schiff been here
to deal with it. Not a little Of the
faith that investors have lost this year
Is due to the mess that those to whom
they entrusted their money have made
Of their obligation, and this includes
quite q long list Of those who were
supposed TO possess sound business
| Judgment
It will take some time for this dis
| trust TO wear of. This Is one of the
reasons for delay In approaching secur-
tiles that are obviously nquidated and
whose yield and ability to continue
present dividends make Of them invest
ment opportunities in which investors
Will take pride year or two hence. II
does not often happen that sound com
mon stocks may be purchased to return
from to 8 per cent, nor have there
been many occasions in recent years
when second grade bonds of the best
| American corporations were available
on 5h per cent basis.
(Copyrieht, 1900