The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-02
STOCK UPTURN
FORECAST FOR
COMING YEAR
Liquidation So Complete
Business Recovery Felt
Certain.
BY ELMER G. WALLER
United Press Financial Editor

NEW YORK, Jan. 2.-The trend
Of markets and business continued
downward throughout 1881 with few
interruptions. Liquidation was so
far-reaching and drastic that the
markets we're considered in a posi-
ton TO stage a recovery on a bust
ness upturn in 1882.
One phrase sums up the 1891 sit
uation in the financial world
flight Of capital"
Capital fled from the security
markets. Capital left Germany and
caused world repercussions. Then
it left Great Britain, and that
country had to abandon the gold
standard. 1t left the pockets of the
workers, the banks, the railroads,
the United States treasury, business
in general.
Where did the capital go; what
made it leave; when will it return?
New Low Levels Seen
Before answering those questions
it is essential to examine the devas-
tation in the economic world for the
last year. And it is as essential
to remember this years. break in
prices was a further part in the de-
fiationary process.
First of all, business crashed to
new low levels for ten to twenty
years or more. Then foreign coun-
tries began to exhibit signs of finan-
cial exhaustion. The troubles of the
latter reduced our foreign trade and
accentuated the American depres-
sion.
Stocks on the New York Stock
Exchange lost nearly SO per cent
of their value, the dollar decline
amounting to approximately $"3,-
O000OO,000, a sum nearly equiva-
lent to all the savings deposits of
the nation. The latter we're not
impaired. In fact, they increased
in volume as the depression entered
its twenty eighth month.
Rail Bonds Slump
Bonds, especially railroad issues
and foreign loans fell to new low
record prices. In some instances
the issues we're selling at 10 to 20
per cent of their par value.
Industrial stocks broke SO per
cent for the year as measured by
the Dow-Jones average; rail stocks
broke Sc per cent and utilities 48
per cent. The industrial average
was at a ten-year low; railroad at
a record low and utility at a new
low since the compilation was
started.
The stock market rose in Janu-
airy and February on prospects of
business recovery which did not
materialize. Failure of the recov-
cry to continue brought sharp
decline in March, April and May.
In June President Hoover an
nounced moratorium for Ger
many and a sensational recovery
took place so that at mid-year only
moderate losses we're recorded.
Gains Wiped Out
AT the end of June the barometric
averages Dow-Jones) stood as fol-
lows:
Net Change
open High Low Last 'rO Il. P iSsC
1884 i54ae 1910 l5O.1s off l4.4O
1888 iii.5o $685. s4.ss off 1922
~ oti ~ si TAO 4osa so 81 of IA
These June gains were not held
long. In July the industrial av-
erage broke nearly Is points and
the railroad nearly IL. In August
there was respite. But when the
autumn recovery in business SO
long anticipated failed to occur, the
market went down again.
In September industrial shares
crashed 1870 points in the average
and in early October the whole list
made new lows for the bear mar
ket-Oct. S. Then a recovery en-
sued until the first week of Novem-
Der when the decline set in again
and continued almost without inter-
mission to the end of the year.
The real difficulties began when
Great Britain abandoned the gold
standard. That sent the pound down
80 per cent. For a time confidence
in the American dollar was impaired
in Europe by vicious whispering
campaign, but as the year drew to
an end the dollar had regained its
prestige and reigned supreme.
The British situation was caused
indirectly by abject failure of Ger
many financially Back in June the
German situation came to the
fore. 1t, in turn, followed dis
aster in Austria when the mighty
Credit AnStalt failed. Germany
could not meet her bills. President
Hoover then announced his famous
moratorium after consultation with