Evening star., 1931-11-29
Wall Street STEPPED in Gloom
as Securities Values
Hit Toboggan.
SENTIMENT is HOPEFUL
OUTSIDE OF NEW YORK
Forecasts of Better Business and
Rising Markets Freely Made
in Other Sections.
BY CHARLES F. SPEARE.

! during october and in the first week OF
| November. For the sixth time in the
past two years stocks have broken
| through what had seemed to be the
! final point of resistance. where their
market value, relative to that precedent,
had given them something of a bar
| gain" quality.
Fortunately, sentiment outside of
Wall Street has not been tuned so
/ closely to the fluctuations in the mar
! ket place as it was two months ago. In
| portions of the country there Is a dis
tinctly better feeling and willingness
to go ahead after standing still so long.
! The very cheapness of securities and
commodities, the liquidated condition of
Wall Street as reflected in brokers'
| loans, the low inventories and the
| strong cash position of many corpora
| tions, the attractive price level OF man
ufactured articles and the necessary re-
placements after two years Of living on
! the surplus stocks carried over from
| 1929 justify the increasing number OF
| forecasts of better business and stronger
markets next year.
Wall Street as Barometer.
It is easier to sense an approaching
| change at a distance from Wall Street
| than where ones feelings and actions
must be influenced by the daily spec
| tacle of a great depreciation in the
quoted value of the highest as well as
| the lowest grades of securities. 1t is
always a question how far Wall Street
accurately reflects the true state of af-
fairs outside of it's own boundaries.
Many persons believe that If the doors
of the New York Stock Exchange were
closed and the policy adopted of for
bidding the daily publication of prices,
in vogue in Berlin for over two months,
there would be more confident feeling
everywhere This is a debatable ques-
ton. 1t came to test on the morn
ing after Great Britain went of the
gold standard, when the governors OF
the exchange rightly decided to main
tain a market but to prohibit those
fictitious operations that would exag-
gerate the nature Of the crisis. If it is
necessary completely to liquidate the
situation before its health is restored,
the sooner this is effected the better,
even though the process Is a painful
one.
The investing public is not buying
stocks because it has lost so much
| money in them, even from its frequent
purchases since the low levels of Mo-
vember, 1929. The speculative public
has for some time reversed its normal
process and is selling stocks short" 1t
has the same enthusiasm for the bear
position today, after a def1ation un
equaled in any panic in SO years, as 1t
had for the same stocks when they
were at record heights two years ago.
This swing from one extreme TO an
other is an evidence that securities are
in buying range.
Two Cases Require Remedies.
Definite improvement in securities is
10 of
such remedies as may be applied before
the end of the year to betterment in
domestic railroad credit and to an ad-
| justment in the German debt situation.
| So long as these two sores remain un-
healed they will affect the entire body
! of national and International credit
! The tragedy of it is that both have to
be prolonged In order that men may
| play their petty game of politics. The
business world comes to nearly a halt,
| millions of wage earners lose their jobs
and tens of thousands of security own
ers their income while private and pub
/ lie interests trade back and forth be-
hind the scenes and, in the process Of
| trading, utter sentiments that they do
| not believe.
1t is known to be a fact that last
weeks conferences between the railroad
| executives and the representatives of
the railroad brotherhoodS were carried
on in spirit of great friendlineSs and
with sympathy that never before had
been expressed by each side of the
controversy for the problem of the
other side. Yet the announcements
that were published Monday suggested
/ an irreconcilable difference. between the
| two and the opening of a bitter wage
war between them.
Likewise, Premier Laval of France,
in order to satisfy his constituency and
to hold his Office, returns home after
! his conference with President Hoover
and puts out a proclamation not at
all in harmony with the spirit Of the
interviews here and probably not what
will be substantiated when the final
agreement with Germany is effected.
Strong Spots in Industry.
| There are many strong elements in
dozens of corporations whose securi-
ties have no support that might well
be exploited without hurting the dignity
| or upSetting the traditions of corpora
tions and banking houses that had
| plenty to say in favor of these securi-
ties when they were three and four
times their present prices. More leaders
in corporation and institutional life
might we'll follow the example of Presi-
dent Willard Of the Baltimore 81 Ohio
| who, whenever an unfair and inaccu-
rate attack is made on the railroads,
promptly hits it on the head and gives
the public a true set of facts. 1t Is
better to err little on the side of
optimism, after two and a half years
of industrial reaction. than to remain
mute for fear that 100 per cent of a
forecast may not be realized.
Compared with the average Of stock
prices on November 9, that of the in
dustrials has since declined % per
cent, of the railroads 80 per cent and
the public utilities 20 per cent. For
three weeks there has been almost no
interruption in the downward direction
of stocks and bonds. 1t is a strange
and mystifying situation. There are
fewer bank failures each week than in
good times. Thus the factor of insti-
tutional selling that unnerved Wall
Street some weeks ago has been re-
moved. In railroad shares 1t has been
to some extent replaced by a deep ap-
prehension on the part of tfeif holders
| over the future of the entire steam
transportation industry. SO we have
leading stocks like Pennsylvania selling
this week at the lowest price since 1877
and New York Central, LOuisville g.
Nashville and others at figures with
which the older men of the present
Wall Street generation ara v,ot familiar.