The Washington times., 1934-01-01

4The fundamental difference be-
tween the two periods lies In
their background. In 1929, stocks
We're bid up on a record Of
earnings which was to continue
id infinitum. In 1888, there was
q mad scramble into equities as
q hedge against a depreciating
dollar which made any sort Of
tangible holding appear more de-
sifable than money itself. The
Imitation bogey served its pur-
pose well in the past twelve
months, with psychology, rather
than direct use of inflationary
powers, proving the greatest stim-
ulsls to higher stock quotations.
Steady Decline Begins
The year began quietly enough,
With the market putting its best
foot forward at the outset, and
showing quiet strength through
tie first two weeks. Then
something happened, and stocks
began to slide off. Volume was
not particularly heavy, but ordi-
narily aggressive pools main
tanned position on the side
line, and despite a daily turn
over which seldom reached a mil
lion shares, the list continued to
give way steadily.
Early in February, came the
announcement of the Michigan
banking holiday, which cleared
up, the mystery OF the selling n
previous weeks, and accelerated
the downward movement, as ad'
ditional States were forced to call
for moratoriums on their bank.
ing institutions.
The low point of this initial
decline was not reached until
February 81, with the Dow-Jones
Industrial averages showing
loss of some IA points in the in
terval from January 10.
Market Closed
The market began to show some
signs Of being oversold at this
stage and stocks began to work
quietly higher. Early in March,
shortly before President Roosevelt
was to assume office, there was
heavier short-covering on reports
that the Stock Exchange was to
BE- closed. The premonitions were
borne out by the enforced New
York State holiday on March 4,
automatically forcing a cessation
Of trading activity. Upon the in
auguration of the new Chief Execu-
tive, a nationwide banking holiday
was declared, and the Exchange
was shut down for the first time
since 1914.
Trading was not resumed until
March Is, but so great had been
the healing powers of the new
Administration that buying orders
from all over the country came
into the market and brought
about sensational rise.
In point Of percentage, the gain
that day was slightly more than
15aper cent, with turnover that
ran above three million shares,
the heaviest day of the year to
date. The upturn continued
through the following day, in
trading even more active, but that
proved to be a temporary hating
point for the rally.
Reaction Sets In
Reactionary tendencies set in
att this stage, but it was of the
slow, dribbling character, with
volume falling below 100000
shares most of the time. The
bottom of this decline was reached
on March 81. coincident with the
appointment of a receiver for the
Missouri Pacific Railroad.
The market began to perk up
tie following month, with rumors
of important developments ex-
peSted from the nations capital,
influencing steady and persist
emf absorption of stocks. !
April 18, came the announcement
of ian embargo on gold, and the
bull market was on in earnest.
On April 10, the first opportu'
nifty that the market had to re-
spOnd to the news, stocks ad
vanced by leaps and bounds in
q five million-Share day. Vivid
newspaper accounts of rising
values brought a fresh deluge OF
buying on the following day, when
more than seven million shares
changed hands.
i Profits Pyramided
New fuel to the speculative fires
was furnished at this time by the
introduction of the Thomas infla
ton amendment in Congress Civ
ing the President, among other
powers, the authority to lower the
gold content of the dollar and &
isshe new currency. Day after
day, the market persisted in forg
ing ahead to new high ground
with the minor reactions thai
cropped up from time to time
used by spectators to increase
holdings. Pyramiding Of profits
was freely INDUCED in. and there
were profits aplenty.
Everything went along serenelN
until the opening of the Lonjor
economic Conference on June 10
when rumors of impending dollar
Etabilization were heard. Such
roY,orts might have been ignore