The Washington times., 1934-01-01

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dition been stronger, but an aver
age rise of more than IL points
in the Oow-Jones industrial aver
ages from April / to this time had
attracted an unwieldly public fol
lowing, which was forced to sell
stock on any sort of Sizeable re-
action.
The next point of resistance was
reached on July 18, when the
market as measured by the aver.
ages was approximately one hun
dred per cent above its position
at the beginning Of April.
AlcohOIs Lead Decline
This time, it was the alcohol
group which started the long de-
cline.
It was akin to a SNOWFALL going
down hill and before the specula-
tive element was aware of what
was transpiring, the retreat was
on. From July 10 to %. the
market tumbled 20 points. The
ticker was forced helplessly be-
hind in this oyerpowering selling
wave, with volume days of seven,
eight and nine million shares fol-
lowing successfully. On July %,
which proved to be a Saturday,
the turnover gauged on the basis
of a full five hour day, was in ex-
cess of ten million shares.
Thereafter, the market regained
its equilibrium, although after the
havoc wrought in this four day
period, traders moved with ex-
treme caution. Stocks resumed
their uptrend, based on the like
lihood of inflationary procedure
by the Government, and at a more
methodical pace, succeeded in
coming almost to the July 18
highs in late August.
Initiation Shares Dumped
On October II, the Treasury De-
partment announced the refund
ing of a portion of the outstand-
ing Liberty Loan fourth 4As.
This was taken as a turn to a
more conservative viewpoint by
the Administration, and stock
which had been bought by in
vestors in the expectation that in
flation was in the cards, was un-
tremendously dumped overheard.
In the fortnight interval be-
tween October 9 and 81, the
market dropped more than 16
points, with a similar setback in
commodity prices, resulted in a
renewed clamor for use by the
President Of his inflationary
powers.
On october %, the Chief Execu-
tive announced the gold buying
policy, by which the Reconstruc-
ton Finance Corporation would
buy newly mined domestic gold
at the world price in an effort to
raise commodity prices. This set
the speculative sparks flying anew,
with traders in a rush to retrieve
holdings in initiation stocks.
Plan Attacked
This inflationary effort on the
part Of the Administration failed
to incite any lasting enthusiasm
however, even though the policy
was broadened to permit purchase
Of gold in world markets. Wide
spread criticism of this plan crop
ped up in following weeks, with
equities blowing alternately hot
and cold in response to the daily
changing situation.
With increasing indications that
the President intends to use his
inflationary powers sparingly, the
forthcoming session of Congress
is awaited by Wall Street to pro-
vide the next real impulse for
price movements.
On the whole, however, at the
year-end there has been no change
i'll the advice of investment coun-
SelorS to remain well represented
in equity stocks. Whether or not
fluctuations in 1884 will be as
violent as those in the past year,
no one can tell.
However, with reports indicat-
ing that Congress will put some
brakes on speculative operations
and take a more active part in
supervision on the Stock Ex-
change, it is doubtful whether
volume next year will approach
the estimated total of close to
seven hundred million shares ex-
peCted in 1888. Transactions in
! 1892 were roughly 425. .O0O. 600
shares. while back in '29, when
1924, ,990,980 shares changed
| hands.