Evening star., 1931-12-27

pected when industry revlTeS and when
those whose operations make the
market recognize the revival. For the
record shows that the initial stages
of recovery do not reveal themselves
in the usual statistical indexes BuSi-
ness initiated its reaction in the Sum-
mer of 1929, but the market persisted
in its insane advance for two or three
months after trade began to fall off.
There is reason to believe that this
will be true of the revival. Beyond
that point no prediction has any value.
The Course Of Prices.
The market record of the year can
be quickly summarized. Stocks rose
nregularly from January to February
28 and then reacted to what was then
a new low on the 2d OF June. An
nouncemcnt of the Hoover moratorium
in June brought a sudden but brief
recovery. On June 81 the downward
movement was resumed and another
new low level was reached on October
5. Once again there was a deceptive
rally, this time lasting to November 9,
and then another break, with the low
est prices of the year and the lowest
of the bear market reached this month.
AS it stands now, all accepted aver
on record For other stocks they are
the lowest since 1921 or 1922 The
market is nearer a cash basis than it
has ever been. Brokers loans reached
their peak of $680l ,000,000 on october
l6. 1929 and have now dropped well
under the previous low of $3.50. .448 900
on September 7, 1921 Whatever may be
the case with outsiders, the spectators
who have survived are lquidated. In
1929 a membership on the New York
Stock Exchange sold for S625, 900. To-
day seat may be obtained at less
than one-third of that price.
Volume of trading has diminished in
similar ratio. The largest turnover on
record was that of october %, 1929,
with l6,4l0,030 shares This year the
greatest activity in any one day was
on February "a, with 5,345,7l shares.
Traders Attitude Changes.
Even emotions of the trader have run
from panic to deSpondency. to resigna-
tion No one looks now for a return
of the new era" when no price was too
high to pay for an equity With the
man in the street it is no longer a case
of striving for speculative profits in
the stock market, but one of hope Of
recouping speculative losses, or of
checking the depreciation of invested
capital
The devastating extent of the decline
can best be illustrated by taking a typ
ical series of each of the three stock
groups, utilities. industrialS and rails.
In the accompanying tables 10 stocks
in each classification have been selected
and the high price of 1929, the close as
of December 81, 1880, the low of 1881,
and the percentage decline from the
close of year ago to the low this year
are compared.
OF course the high of 1929 is no fair
comparison, inasmuch as imitation
prices of that year were as absurd as
the def1ation levels of today but it
does serve to measure the extent OF
the fall More significant, perhaps, is
the percentage decrease this year, as
that started from an average price OBJ
tanning after Is months of bear mar
ket,
Utilities Show Resistance.
Take utilities first, for the reason
that they are the stocks representing
the industry that made the best show
ing during the depression and are stocks
that retained a market following longer
tnan mdus;r:als or rai:S. There have
been fewer dividend casualties in the
utilities than in the other two sections
yet the price losses on any basis are
staggering. American & Foreign Pow
er common is the most notorious case.
Here is a stock which never paid a
dividend, During the new era" in
sanity it sold within fraction of 5000
a share. 1t started in this year around
$28 share and this month sold just
above ST a share, or II per cent de-
cline in 1881 alone. If the reader
chooses to calculate the loss from the
1929 peak he will find depreciation
of over 95 per cent. The impressive
fact is that so much of the loss was
recorded in the present calendar year.
Here are the 10 utilities: