Evening star., 1934-07-04
MARKETS CALM, INDUSTRY Is HEARTENED IN 1884
MIDYEAR MARKS
TRANSITION ERA
Regulation of Wall Street
Preceded by Many Vital
Changes.
RY FREDERICK GARDNER.
Associated Press Financial Writer,

ASS0clalP lPd PfeSS flnH0ClHI WTltf,
NEW YORK, July 4-Through the
first half of 1884, financial markets
presented a picture of outward calm
almost unmatched since the big post
war bull market in stocks began 10
Climb 10 years ago.
Although he stock market declined
quite sharply from April to the mid
Gle of May, the dOwnsWing was mod
e~ate in comparison with some Of the
hig movements of 1888.
The decline did not go far enough
To break the lower limits of the range
in which the market has moved since
last July. Moreover. losses we're part
j. recovered in an upturn which car
REQ into June.
In contrast with stocks. bonds held
steady around best prices of the past
two years and in June many first
grade issues sold at highest levels
recorded since 1928.
Commodity Prices strong.
Nor did commodities follow stocks
on the Spring decline very far. In
fsrt. underlying strength in commod-
itv prices in May again began to
assert itself and by the middle of
.mne leading active staples on the
average were At top levels for the
year. although still some distance away
from the peaks touched last July.
The unruffled appearance of mar
kets on the surface, however. did not
fully reflect momentous changes in
Wall Street.
II was a transition period as the
Stock Exchange and financial COM
nunity prepared to adapt itself TO
Federal regulation
All through the Spring until PreSi
dent Roosevelt signed the stock ex-
change control bill, Federal rule of
exchanges and speculative practices
vas uppermoSt IN Wall Street dis
Cussion and thought.
wall Street MOdifies Protest.
At first loud spoken in opposition
to the control bill, Wall Street modi-
fed its protests as the bill was
amended
Thus, midyear of 1884 becomes
red-Ietter day in wall Street. 1t marks
the passing of the old regime of un-
restricted speculation and the advent
of 4 new era of governmental regu-
lation.
How security markets will function
under the new control measure re-
mains 10 he seen. But there is a con-
siderable oodV o. opinion in the f1nan-
cial community which holds that long
term effects will rebound TO the bene-
fit of Wall Street as we'll as the
public
Whether or not it was directly at
tributable 10 the prospect of Fedora
regulation. speculative activity in
stocks waned rapidly after the stock
exchange measure was introduced in
Congress last February. Trading ebbed
to such extremes that daily sales on
several occasions in May established
low records for the past decade.
Large Spring Expansion.
From early February 10 Midmav
the trend of stocks was down. Sup
port came, however, and the trend
turned upward before the decline had
gone far enough TO break the ma jor
uptrend outlined on charts since early
July 1882
Spring business expansion was the
largest for the season since the de-
preston assumed serious dimensions.
But the upturn in industrial and trade
activity whicn extended through April
appeared to have been discounted by
stocks on a January and early Febru-
Rrv rise. On that swing. industrial
ne HlnlIcafpH
peak levels of the 1888 bull market
attained last July.
Seasonal recession in business be
came apparent in May At the same
time. strong resistance TO the usual
seasonal influences was apparent so
that sentiment toward midyear began
to improve Steel, car loadings. power
production and other major barometers
Of activity neld their ground stanchly
ir the face of seasonally depressing
Influences.
Capital Flows Back.
Aside from the business trend, secur-
ity markets derived strong support
from other fundamental factors
Revaluation Of the dollar in Jsnu-
AIRY. on basis OF $35 an ounce for
gold, touched off huge return flow
O. capital from abroad. Much Of the
returning capital went into securities.
as was reflected in a strong advance
il bond prices.
Deposits in banks continued to rise.
and excess reserves of Federal Re-
serve member banks increased to un-
pl ecedented figures. Groundwork was
laid for credit expansion, once other
conditions we're ripe for expanding
business enterprise, and sources OF
new capital were reopened.