Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-10
STOCKS SHAKE OFF
|DULLNESS IN SHARP
PLUNGE DOWNWARD
Market Suddenly Comes to
Life at End OF Draggy
Weeks Trading.
TRADERS IGNORE SIGNS
OF BUSINESS RECOVERY
Pickup in Motor Industry Fails to
Offset Effects OF Long
Drought.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, August 9.-Until Fri
day, when the stock market collapsed
in a heavy wave of selling engendered
| by the crop situation, together with a
| number of small items of adverse news
this had been one of the dullest weeks
! experienced by Wall Street in several
| years.
Up to this point, the contrast in the
volume of trading with that of last
| August was as great as between the
f! level of prices in the. two periods. The
! fever of speculation that ragged IL
| months ago produced an exhaustion so
complete that, after year of recupera-
| ton, the stock market was in liStless
and indifferent mood.
But at the end of the week, when
| cotton broke SO bale on publication
of the bearish Government crop report,
when Warner Bros. Pictures omitted
the quarterly dividend, when drought
conditions had passed the point where
they merely promised to be the har-
bingers of higher and beneficial COM
modify prices and became the heralds
of national distress, the market broke
badly.
Amusement Group Breaks.
Ignoring the appearances of seasonal
improvement in industry, the selling,
which started with Warner Bros. and
other amusement shares, broadened out
to include the entire list. Standard
Statistics index of 80 stocks ended the
day at 161, which compared with the
recent high of 1888 and the June low
of 1874. The liquidation was accom-
panied by much increased volume, Fri
days total of over 100000 shares
traded being more than double that OF
any other session of the week.
What the market took cognlzance OF
served to nullify many prominent signs
of improvement which came TO light
during the week. Most notable was the
activity in automobile plants closed dur
ing the greater part of July. This
should be translated into orders for the
numerous products that enter into the
manufacture of cars and give an I'M
petus to retail trade in districts where
the sluggishness of the motor industry
has caused the lowest percentage OF
sales in the entire country. Statistics
of employment and of industrial &C
tivity show that an advance or a re-
cession in the motor trade has a most
pronounced effect on the aggregate
business of the country. The mild de-
preston in 1928 was due primarily to
the shutdown of the Ford plants.
Before the market turned, the in
creased activity of the automobile in
dustry was accompanied by firmer
market for motor stocks, a better tone
to iron and steel and the shares of the
chief steel producing companies, with
collateral benefits in other directions.
Public utilities were buoyant at times in
spite of conspicuous political prejudice
that is likely to be an issue in State
elections later on. Railroad shares, too,
had some recovery, although car load
ing forecast more poor earnings for
August.
Railroads Help Corn Grower.
The reduction in grain rates brings
losses to the carriers that overbalance
the gains from tariffs earlier revised.
Now they are threatened by still further
sacrifices in the interests of the corn
grower, in spite of the established fact
that low rates on export wheat into
which the railroads we're forced last
year brought no benefits to the farmer.
Gold Outflow Continues.
Gold continues to go out under the
compulSion of exchange rates that ia
vor it for France and Canada and tend
in the same direction in England
About S65, 900, 900 has so far been ship
| ped since the middle of July. It Is not
| unlikely that the movement may reach
double this amount before it runs its
| course. This would not be serious
matter for the American money mar
! ket, whose net gold increase in the first
| half of the year was S242 100000.
Bankers whose funds are earning lit
tie or nothing above the rate paid to
| depoitors would welcome some reduc-
| ton in the surplus of credit, especially
as this would at the same time benefit
the countries that are now drawing our
| gold.
No signs have as yet appeared of a
! seasonal tightening in money rates
| They will be moderate when they do
come, but may be delayed until the end
| of this month instead of showing up
about August Is. The current low
| quotations for all classes of credit &C
commodations still favor high-grade
| corporation and tax-free bonds as well
| as preferred stocks. They have so Tar
made little impression on junior securi-
| ties. There is not much evidence that
they have encouraged industrial or
mercantile promotion Such inspiration
| as there has been for this has come
! from sources other than the money
! market.
! Copyright. l930D