Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-24
Fewer Than 20 Listed Com.
mon Stocks Now Selling
Above 500.
COMMODITIES GO LOWER
AGAIN DURING LAST WEEK
Outstanding leadership Seen as
Greatest Need of Wall Street
at Present.
BY CHARLES F. sPEARE.

BY CHARLES F. SPEARE.
Special Dispatch to The Star.
NEW YORK, May 23-There has
been little cheer this week for those who
hold securities. The fall in common
stocks and in junior bonds continued
until the averages for the former
reached level 40 points below that at
which the present monotonouS decline
began three months ago.
So extreme has been the defation
that fewer than 20 listed common stocks
are now quoted above 500 a share. By
far the greater number of issues and
the major part of the daily transactions
are in shares under so.
During the week the average return
on junior stocks was approximately 8l2
per cent, while so abrupt was the col
lapse in railroad issues on Monday that
substantial members of this group were
quoted at prices yielding from 8 to over
16 per cent.
Drive on Pivotal Shares.
With the liquidation that has taken
place and the adjustment In prices of
stocks to earnings per share, there is
evidence that certain groups Of stocks
and individual issues in these groups
are breaking away from the general
drift Of the market. The professional
element centers its attention on stocks
that are in the blue chip" category
and relsntlesSly drives them down from
day to day. Wall Street has been COM
PEELED to think of stocks like United
States Steel, American Can, Western
Union and Ingersoll Rand as being be-
low 100. rather than In the higher
realms of value to which 1t had become
accustomed in the past i've years. 1t
has also been forced to associate Ameri-
can Telephone 81 Telegraph with fig
ure Of about $165. A large portion OF
its $50 900 shareholders have invested
in the property since 1t sold around $3.50
share in 1927, and now few between
the levels of 5000 and $500.
Values as expressed in quoted prices
have, in many instances, more than
accounted for all of the economic, po-
littcal and financial circumstances by
which they are surrounded. When as
much as so per cent Of the list Of jun
Tor shares has descended into the price
area obtaining today, 1t Is a fair wager
that the stock market has taken the
worst Of its medicine and that, while
it may not improve for long time, it
has Witnessed cheek to the disease
from which it was suffering.
Commodities Go Lower.
Inability to buy because of reduced
wages or reduced income from invest
mefts and unwillingnesS to buy owing
to lack of correction of retail prices
to prices at wholesale finally get back
to the general average Of commodities,
which this week has fallen lower than
ever. The Fisher index Is now nearly
% per cent under that of 1929. Cotton
has sold this week lower than at any
time since 1915. The latest Sears-Roe-
buck catalogue reveals the fact that
many prices quoted are no higher than
those IN the Spring of 1913, when the
cost Of living was regarded as rela-
lively low. Department at Labor Stats
les indicate that in April retail prices Of
food declined per cent and we're 10
per cent lower than in April, 1880. This
includes the decline in the store prices
OF meats, which are said TO be from Is
per cent to 40 per cent below those
OF a year ago.
All Of this provides some compensa-
ton for those owning shares in the
hundreds of American corporations
that have reduced or passed their div
idens or for those having bank depos
its on which rates are steadily being
cut down.
Interest rates on thrift accounts as
well as on checking accounts have been
reduced in many parts of the country,
with the likelihood that this movement
will spread throughout the Summer. 1t
Is expected the funds affected by lower
interest payments will be transferred
from the banks into securities. This,
at least, Is the hope. 1t is not likely to
be realized. however, unless there Is
strong evidence that business is i'm
proving and the margin Of safety for
bonds Is increasing. Cheap money Is
not the panacea for a declining market
in secondary corporation obligations. On
the other hand it forces government
and municipal loans to extreme levels.
Market Needs Leadership.
What the market most needs now is
strong leadership. 1t has been allowed
to drift along and TO take knocks from
every quarter, High-grade stocks have
been permitted to sell at ridiculously
doesn't somebody say something?" OF
greater necessity is it for somebody to
DO something. The unwillingneSS of
men who in previous crises have as
sumed responsibility as bankers or
captains OF industry to do so now and
the many petty iealousies and personal
preJudices that have grown up during
the period when ambition for power
and great size in corporation measure
ments was dominant. has left the
market without a guide or a sponsor
This, latterly. has destroyed much of
the faith that great body of investors
had in securities until few months
ago.
Before conditions in Wall Street can
correct themselves some individual
there must be recognized and accepted
rs the leader of all factions. HIS arrival
on the scene With the resources which
he could command would mean the i'm
mediate and precipitate departure of
the gang o. "guerillas" who have been
sniping prices of all classes of WORTH
while securities in the last eight months
Copyright. 1881