Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-09
Bears Use Democratic Sue
CeSSeS as Excuse for
Depressing List.
SENSE OF VALUES LOST
IN SCRAMBLE TO SELL
Market Ignores Signs Of Definite
Pickup in Business Of
Nation.
BIZ CHARLEs F. sPEARE.


NEW YORK, November st Is
clear from this weeks depressing record
Of new loan prices for all classes Of
stocks that holders Of them have lost
their sense of values They nurse every
rumor afloat in Wall Street and reject
all evidence pointing to improvement
in the business situation.
Liquidation, which apparently had
been completed in various industrial
share groups last month, has broken out
in the public utilities and rails. Reason
for 1t in the power and light issues is
to be found in the elections, which ele-
waited to State and national office men
who have been conspicuous either for
their opposition to private ownership of
the utilities or to the modern method
OF control OF producers by a holding
company with q pyramided capital
structure.
TIE latest raid on railroad shares
would have been more impressive had
1t not centered on the issues of car
r1ers that have the longest record for
paying dividends and whose present
earnings, poor as they are compared
with 1929 and 1928, give them a high
margin of safety for all Of their Sc
curitieS
We have today stocks Of this type
selling not only much lower than in the
1929 panic, but well under the Quota
tions of three. four and even Ave wears
ago, with no recognition Of the enor-
NOUS reserves that they have accumu-
lated meanwhile and which are at their
disposal during lean period. The only
logical argument against them Is that
they do not afford high enough weld.
Even this is losing its force as the re.
turn rises. being from 51z to 6h per
cent at the present time.
The plain Interpretation of the con-
tlnuous and heavy decline In brokers'
loans reported by the Federal Reserve
ana BY the New York Stock Exchange
Is that securities are changing from an
ownership that is timid and precarioIIs
70 one that Is bold and Permanent.
There has undoubtedly been much en-
forced selling by houses and individ-
uals In distreSssH Each new low level
brings further impairment Of accounts
IN which the equity has steadily dimin-
ished.
1t may be said that the market Is
now IN a stage where 1t is more af-
iected by technical conditions than by
tnoSe 70 which 1t normally reacts, such
as earnings, floating supplies, the ratio
income
yield. It also has to deal with a state
OF mind that develops near the end of
every depression, but which Is no worse
than that exhibited in 1921. in 1914
wnen the Stock Exchange was closed.
In 1907 or In 1908.
Extent Of Decline.
The present decline is the longest
snce the bear market began in October
l Is. year. 1t started on September 10.
since Then industrial stocks have fallen
an average of 20 points. Rails and
pubic utilities are on an average of
20 points each. It Is necessary to 90
back to the Summer of 1927 to find =
comparison In composite prices with
those now prevailing.
Ine reversal Of political opinion In
CnlS country, as evidenced In last Tues
Gays elections, Is given as q cause for
Cne latest wave Of liquidation in stocks
ana IN commodities. It follows traii-
ION Ano nao an earlier parallel In the
POpuIar Notlng In Canada and in Ger
many, where unfavorable economic
conditions brought q change Of govern
ment In the one case and close calI
ior the coalition cabinet in the other
NOW that the American people have
expressed their feelings through their
DaloIS ana the leading parties have
equal power In the next Congress- II
WoCid seem as though political wisdom
respecting 1892 would compel both to
WORK Tor q re-eStablishment Of business
creolt and bring back to normal earn
ing capacity the several millions of I'M
employed. Some Of the nonsense that
wan Street listens to avidly as II
watches stocks 60 down, especially that
which refers to the alleged political
raiders Of the market, Is evidence of its
present lack Of discrimination in other
Things than market values.
Business Pulse Quickens.
This Is not the season of the wear
Wnen It Is natural for business, other
IMAM that related to holiday trade, to
improve. So there is little in prospect
Tor the next six weeks on which to
warrant expectations Of developments
that would inspire the stock market.
Those who have their finger on the
pulse OF business detect a quickening
there and believe that trade Is now
ahead of the market.
1t is certain that in different lines
consumption Is in excess Of production.
Stocks OF merchandise are low. The
pickup just noted In. carloadings is
one indication Of freef buying to re-
pleniSh exhausted supplies. More mer-
chants each week are realizing the ne
cessity Of adjusting retail prices to the |
TAIL In commodities and In wholesale |
values. There IS always q good buying |
demand when goods are offered at the |
right price.
(Copyright. ls3o)