Evening star., 1930-06-22
DECLINE IN STOCKS
DECLARED SETBACK
TO TRADE REVIVAL
Heavy Selling and Sharp
Bear Raids During Week
DepreSS List Further.
MANY SHARES DRIVEN
BELOW LEVEL OF PANIC
Commodities Also Lose Ground, but
Recovery Is Believed
at Hand.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, June 21.-Stocks, bonds,
commodities and money rates have all
gone down together this week, each be-
ing influenced by the action of the
other in liquidation of securities and
commodities that is worldwide and ag-
gravateS and prolongs the business de-
preston.
Stocks have lost between rs and 80
per cent of the average recovery that
took place between November IS last
year and the first of May. On Wednes-
day more than a score of prominent
shares went we'll under the prices to
which they had dropped last Autumn
BY various market measurements the
stock average at that time was about
20 points above its 1929 low, although
as the number of separate issues in a
compilation of this sort increases, it is
significant that the averages of last
November and this week come closer to-
gether. This reflects the large mass of
loW-priced shares in the official list
whose present market values are an in
depreciation of the severity of the busi-
ness depression on various kinds of pro-
ducing and distribution organizations
OF about 900 separate stocks dealt in
one day this week, over 400 were quoted
at $50 or less. In fact, three-quarters
of the number carried prices that would
not average $50 a share. The average
of all the common stocks listed on the
New York Exchange at the end of May
was about $50 share.
Course of Secondary Reaction.
A serious question now is whether
stocks have reached a level where Sus-
pended liquidation and Investments buy
ing will support them or whether under
the influence of the pessimistic mood
of business, there will be further selling
and an approach to, or a decline be-
yond, the limits at which the banking
pool gave its aid last November. There
is very little precedent to support the
theory that secondary reaction, such
as Is now being witnessed goes through
the average reached in a major decline
in security prices. II an approach to
this low average occurs, it has usually
been within comparatively short time
of the event and not seven months later,
as is now the case.
In dealing with commodities there is
stronger basis for expectation of an
early recovery than may be held con-
corning common stocks. The COM
parsons in the commodity situation are
not with so recent a period as 1929
They go back in the grain market to
the pre-war period, in other instances
beyond the memory of the present gen.
Grafton and. in large group of COM
moditieS, they represent the lowest
average in 10 yaars
All, of course, indicate overproduc-
ton, whose effect will be corrected in
time. 1t is recognized that they are
at level where it Is good Judgment for
manufacturers to use surplus funds in
accommodating them against the period
when there will be a revival in business.
Undoubtedly, the violent renewed de-
cline in agricultural products and in
copper this week has served to intensity
trade pessimism. This has been COL
ored, too, by the passage of the tariff
bill
1t seems to be the opinion, however.
that there is less probability of busi-
ness index, which had f1attened out at
the end OF March, making a subsequent
dip below that period than that a de-
cline in stock market averages below
the November level can be avoided.
Lack of Buying PuzzIing.
There is either less buying power to-
day to apply in resisting the downward
trend of stocks, or less will to buy.
Those who are in a position to know
have been puzzled recently by the com-
paratively small balance of their daily
purchases.
This week it has been possible to
buy many of the stocks for which in
vestors were eagerly bidding in Novem-
Der at prices under those ruling at that
time
What does this suggest? 1t NAV
mean that the public has not been
able to save enough since November
to buy stocks. 1t certainly has not
been withdrawing its money from the
savings banks or making loans nv, in
Surance to any extent Or, its mega
tive attitude may represent an unwill-
ingness TO invest so long as there is
no evidence of leadership in the bank
ing world similar to that which became
conspicuous and supporting factor
during the panic.
(Copyright, 1900