Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-26

necessary. The collection and Dispatch
ing of quotations from the floor Of the
exchange were modernized some eight
years ago. But further efficiency in the
system could only be obtained by I'M
proving the ticker instruments which
actually print the quotations all over
the country. And this has been a vast
ly more difncult problem. BY changing
symbols for share issues, and abbreviRt-
ing share quotations, the Stock Exchange
did what it could to render the old
ticker machine more ,eficient. These
palliatiyeS helped to some extent, but
the extraordinary growth of the daily
share markets in the last few years
continued to require greater and
greater capacity for speed and volume
upon the tape, which could only be
supplied by ticker Of novel design.
Many suggestions and alleged remedies
were proposed without practical results.
Finally, few years ago, new ticker
machine based upon new mechanical
principles was invented and success;
fully passed its initial laboratory tests
But these new stock tickers could not
be used until the machine. gave thor
oughly, satisfactory assurances not only
Of speed, but, also of reliability against
breakdown. Ironically, enough, 1t was
only a short time before the panic that
ciently reliable to be installed. There
is no doubt but what the delay expert
enced In obtaining quotations during
the panic considerably aggravated the
violence Of liquidation. Not only did it
lead to panicky selling. but in some
cases stocks would have been better sup
ported II their current prices could have
been. learned more promptly. The in
adequacy OF the ticker system was, am
persuaded, q cause of the tremendous
volume of dealings and the great iuc-
tuations on the worst days of the break.
This whole situation with the ticker Is
all the more irritating to the exchange
because it occurred at a time when
practical methods had finally been
found for vastly improving the service
in the course Of another year.
Another cause in the minds of many
people for the intensincation of selling
to the point of panic arose from
brokers' loans This question of
brokers' loans, particularly those made
by other lenders has, Of course, been
highly controversial subject for the
past two years, and time does not per-
cussion of it. here, Undoubtedly, the
great increase in brokers' loans. by.
other lenders. during 1929 was due to
the great demand. for. stock market
credits neceSSitated both by rising Sc
curity prices and by the huge amount
Of new share financing done for Ameri-
can companies, but 1t must be remem-
bered that these loans represented in
the main free capital which had been
raised by corporations through security
issues and which was loaned while it
was awaiting investment. 1t is difncult
always to say concerning past events
what. might have happened under con-
jectural circumstances. But I am per-
Suaded that o less. artiflcially tight
money market during the early months
Of 1929 and more reasonable rate of
interest on ordinary banking deposits
would have prevented the undue extern
sion Of the loans. for the account of
other lenders In the last analysis,
however, I do not believe that 1t was
due to credit. conditions that the stock
market collapse occurred.
- Federal Reserve.
ut is always, of course, very easy to
criticize after the event. During the
past two years, the Federal Reserve au-
thorities have undoubtedly faced very
complex and in some ways very novel
situation. Any attempt to make the
Federal Reserve system, scapegoat for
the securities panic last Fall, would be
both unjust and undesirable. It is.
however important that the moral of
our. recent financial difnculties should
be clearly ascertained, IL we are to avoid
such episodes in the future.
After every stock panic people who
have suffered losses, very humanity,
hunt about for something or, somebody
upon which to lay the blame. AT such
times the short seller always comes in
for sharp criticism because he is as.
sumed to, have made profits at a time
when the vast majority of investors
have suffiered losses. Short selling is
then constantly harped upon and
greatly exaggerated and every price de-
cline is promptly and positively at
tributed to bear raiding. The last pENic
was no exception to this rule Entirely
sincere and public spirited citizens have
taken the New York Stock ,Exchsnge to