Evening star., 1930-06-15
STOCKS SUBJECTED
|. TO SHARP SELLING
IN WEEKS TRADING
Market Is Beaten Down
Steadily on Bearish Char
aCter of Business News.
BALANCING OPERATIONS
PREVENT WIDER BREAKS
New Low Records Made by Many
Issues on Heavy
Liquidation.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, June 14.-This has been
the most nerve-wracking week Wall
Street has experienced since last No
vember. Liquidation in stocks has been
heavy and of significant character.
Prices have been much depressed.
There have been sinister rumorS, most
of them unfounded.
At times the market situation ap-
peared to be getting out of control, but
it has recovered its equilibrium in the
balancing operations between invest
ment buying and selling for long and
short account.
Developments in the business world
have been unfavorable. Those who
take their pound of flesh whenever they
can get it have capitalized to their
fullest extent such incidents as bank
failures, reduced dividends, poor earn
ings and the tariff bill. At the closing
of the week stocks had a more sta
bilized appearance after the longest
continuous period of decline since 1925,
but there were prospects of another
dull period in speculation ahead.
Three Violent Breaks.
Since the break eliminated on No
vember 13 last year there have been
three violent reactions in stocks, all
tending to disturb the business and
financial interests of the country. That
of the latter part of December was in
f1uenced by selling to establish income
tax losses, though there was in it
certain amount of response to the
earliest indications of industrial recess
sion caused by the market panic. The
May decline was the aftermath of an
ill-advised bull campaign in stocks
predicated on an early recovery in busi-
ness to which the Government and its
agencies gave color. The low prices for
industrial and public utility stocks on
May were we'll over those of December
20, as the latter had been much above
the figures of November IS.
The seriousness of this weeks mar
ket lay in the fact that more than
two-thirds of a representative list of
so industrial and public utility, shares
declined below their lowest quotations
of last month and Is per cent fell
under those of November. In this lat
ter group were the copper stocks, sew
eral Of the motors, the leading ma
tional distributors, shares of the rail-
way equipment companies and of
manufacturers of specialties that had
enjoyed great speculative popularity in
previous months. Five of Is of the
most active rails were lower than in
November and practically all available
at prices under those of December or
May. On Thursday the market as a
whole was at the lowest average of the
year.
Pyramiding Of Stocks.
The new era" period of 1928 and
1929 developed many new holding
companies whose destinies were under
the command of young Napoleons OF
LnlIfv1r AA @-I
other holding companies. There was a
great pyramiding of corporation stocks
The result is that today the decline
in the shares of a manufacturing con-
Germ, of producing power and light
company. of a railroad, of a bank or
an insurance company affects not only
its individual owner, but the shares
of one or many holding companies
which has the particular stock in its
portfolio.
Again this week the stocks Of half
dozen finance corporations Of ire
mendous capital, and ramificationS so
intricate that few can understand or
comprehend them, have been under
great pressure. During part Of a ses-
sion there was absolutely no market
for one Of these stocks. In every in
stance there is the record of buying
blocks of stocks of independent COM
panies at prices for which there was
no warrant in a long record of earn
ings. 1t will be some years before the
premiums paid for control of producing
properties, so that one group might
obtain strategic advantage over an
other group, are absorbed through in
creased earnings and dividends.
Tariff Opinions Revised.
Wall Street may have been less
frightened over the tariff bill than it
had supposed, for once the fact became
known that the measure was to be
enacted into law, the financial district
began TO revise its opinion of the effect
on business. Unless one is a student of
politics one cannot understand how
Senators could have taken the floor
and abused their associates for pre-
sentng such measure and then en-
oraced 1t themselves. Business has been
lrrltated long enough by tariff discus
sion, SO their argument ran, and could
not stand the shock of another con-
gressionaI campaign for revision which
was pound TO come If the present bill
should lapse. Putting the tariff bill
side by side with the ACKNOWLEDGEMENTS
program for stabilizing business we And
political expediency, as almost ALWAYS
happens, getting the better of economic
necessity.
Industrial progress continues Slow
The cumulative effect of eight months
of business depression is ali the time
more evident in the policy of cornora-
tions OF conserving their cash resources
at the expense of their shareholders.
Copyright. ls3o)