Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-15
.UPSW|NG IS STOCK
MARKET DRIVES IN
FRIGHTENED BEARS
Unusual Strength Shown Dur
ing Week-LiSt Near
Cash Basis.
FAVORABLE, INDUSTRIAL
NEWS AIDS SECURITIES
Consumers Show Disposition to
Take Advantage of Fall
in Prices.
BY. CHARLES F. sPEARE. .

M CHAhLES r. SfEAhEs
Special Dispatch to The Star
NEW YORK, February 14-With the
stock market steadily advancing through
January, brokers' loans decreased about
$500, 100000 They had previously de-
clined over 81 ,O0O, 100000 during the last
quarter of 1880, when stocks were fall
ing. This was absolute evidence that
such speculative interest as remained
in the market was being closed out,
with the transfer of securities from
those who were carrying them on mar
gin to others who were buying them
with cash.
For weeks the market had been near
est to. a cash basis in years. Loans
were down over rs per cent from Oc-
tober, 1929. Unfavorable developments
of various kinds had ceased to have an
adverse effect N values. In spite of
the lowest level of business activity
since 1915, shown in the January sta
tistics, stocks continued to creep up
ward.
Technically the market was In a po-
sition of great strength. Apparently
the professional bear element did not
or would not recognize this. The bears
tried to bring out further selling by
artificially making some of the leading
industrial shares weak, but found they
were butting their heads against a
stone wall Then they began TO cover.
This started the advance which first
became impressive week ago today
and finally broadened out this week
into the most spirited upward move
ment since last April, with trading
more than double that of recent ses-
sions and with about 10-point aver
age advance which met no check until
Friday.
Shorts Now Have Worries.
1t may be that the recovery will soon
run out. It is certain, however, that
those who own good securities today
have less to fear than those who are
short of them; also that others who
have been Withholding purchases on
the assumption that the market would
have its final break this month or next
have missed the opportunities for cap
ital appreciation and high returns on
capital that were held out to them in
December and during portion of
January.
No one loves the bear on stocks. He
may have function in speculation, but
he is commonly regarded as parasite
in the world of markets in securities
and in commodities. He is just as apt
to be too cocky at the bottom of a
long decline as are the public and pro-
moters of stock pools when prices are
at their tops.
This is not the season Of the year
when definite improvement In business
is to be expected. And there have not
been many signs of it this week. March
should, however, show a greater mo-
mentum. The degree Of this will de-
pend on Congress. The prayer of the
American people today is that Congress
will vote to adjourn on March 4. Seldom
has there been such universal demand
for a cessation of political harangue
and an opportunity for industry to pro-
coed without the daily fear of some
development in Washington that will
chill the hearts Of producers and con-
sumerS.
Favorable Trade News.
There have been a number of favor
able developments during the week,
such as partial breaking of the drought
over large areas in the Middle West
and Southwest, an advance in the price
of copper, a recovery of 1a cents in
silver metal after it had touched a
new low and the moving up Of iron
and steel production to SO per cent OF
capacity from below 80 per cent in
December. Automobile output is grad
ually expanding and active preparations
are under way for a great deal OF con-
struction work throughout the country
with the opening of Spring. Railroad
car loadings were larger last week than
during the week previous. They are
still far below those of February in
ka fV1o-
preston on comparative statements Of
gross earnings.
While the general average of COM
modify prices is moving downward,
there are evidences that consumers are
beginning to take advantage of the I'M
paralleled reductions. Already in some
lines net profits are rejecting the good
Judgment of merchants and distributors
who had the same accurate sense OF
values toward commodities that in
vestors displayed in buying securities
last December.
From many angles, therefore, it would
appear that liquidation has run its
course, that the low point in the de-
preston in this country was reached
about two months ago and that a slow
growth in confidence is now taking
place and will be influenced as much
by what securities do in the remaining
months of this Winter as by any other
one factor There is always point in
every national or international crisis
where conditions compel action after
those who are expected to initiate 1t
have recovered from a certain amount
of stupefaction from continuous defeats.
This we find in such recent proposals
as those to stabilize the price on silver,
to consolidate some of our railroads,
to oppose vicious financial measures in
the American Congress, to develop an
economic rather than political point
of view toward the English labor and
trade situation and to stop the growth
of such movements as Fascism in Ger
many.