Evening star., 1932-12-18
December Markets Have Re-
veaIed Stubborn Resistance
to Selling Pressure.
BANKING CIRCLES CALM
IN FOREIGN DEBT CRISIS
Lack of Tax Liquidation Has
Proved Beneficial Factor Dur.
ing the Past Month.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, December 17-An in
teresting comparison may be made
between the action of the stock market
this month and in December of 1929.
1880 and 1881.
In 1929, from December 7 to 20. there
was an average decline in industrial
points In 1880 the liquidation started
late in November and ran to December
is, resulting in an average los in
industrials Of SO points and in rails of
81 points. In 1881 the last phase of
the years liquidation developed on Nc
vember 19 and was not completed until
December II. The net result Of it was
an average loss Of 43 points in indus
trials and "a points in rails.
This year there was a moderate re-
action in the latter part Of November,
following the rise in october and just
after the election. Since then there
has been a gradual improvement and
the middle of December finds both in
dustrials and rails several points higher
than at the end of last month.
Defation in Securities.
This new December market trend
seems to confirm other evidences that
the liquidation in stocks has been COM
pleted and that, CT all classes of prop
erty, securities are today the most
thoroughly Debated. In December, 1929,
the reaction in stocks represented a
secondary liquidation movement, com
ing after the abrupt rise in November
from the panic levels Of that period.
In 1880 heavy selling was precipitated
by the closing CT the Bank of United
States. Last year it was the cumulative
effect Of foreign banking troubles. the
suspension of gold payments by Great
Britain and runs on numerous American
banks that produced state OF excessive
fear among security holders.
Fortunately this year is ending with
a surprising degree Of calmneSS IN
banking circles, which even the de-
faults this week by France, Belgium and
Poland have not disturbed. Those
prophets of market movements who
have been proclaiming that the low
prices Of the year would be reached IN
December are now without honor IN
their profession, for with the market
average more than 20 points above the
low of last July it is fair guess that
the minimum quotations of that month
will stand as the record for 1882 and,
pOoSlUly, AOl lAC CAAeAC ASPASoSAoA ~
riod.
Less TAX Selling"
One Of the factors that has been OF
assistance in keeping stocks on an even
keel this month has been an absence OF
large-scale selling in order to establish
losses for income tax purposes. Such
liquidation no doubt aggravated the
situation in the three years prior to
1882. The change in the method OF
compiling income tax statements, IN
which profits and losses offset each
other where derived from securities held
less than two years, and the fact that
there has now been such universe!
taking of losses since 1928. gives less
opportunity for building up case Tor
small income tax payments.
Still another aid to price Stablllzatlon
has been the withdrawal of large and
aggressive group of spectators who ex-
aggerated the fears of investors in pre-
vious years through operations on the
short side Of the market, but who have
been brought under such close super
vision by the New York Stock Exchange
authorities that they now proceed with
caution. It has not been found that
the market has suffered any from the
lack of q short interest, which Is sc
much advocated as a necessary cushion
It is a waste of time and energy for Of
flcials of the New York Stock Exchange
to maintain that short selling had little
part in the 1881 decline of the market
The facts are all to the contrary.