Evening star., 1935-12-31
Trade Progress, Excessive
Money Supply and Influx
Of Gold Big Factors.
"IN.AND- -OUTERS" LOSE
TRYING TO HIT TURNS
Stringent Margin Rules Reduce
0vertrading and Keep Market
Technically Strong.
BY GEORGE T. HUGHES.
Special Dispatch 10 The Star.

Special Dispatch 10 The Star.
NEW YORK. December Sit is
easy to recognize a bull market after
it has been in progress long enough,
but 1t Is not so easy to identify 1t when
it is first forming. So it comes about
that few people realize that the cur
rent advance in stocks really started
in Midsummer of 1882. when the great
decline which began with the collapse
of october. 1929. had finally burnt
itself out.
Stocks have never dropped back to
the levels recorded in the first week Of
July three and one-half years ago.
They came near to it in March, 1888.
Just before the banking holidays. but
they stopped short of the previous low
points. Then they initiated a robust
recovery on the imitation expectations
that followed departure from the gold
standard, only to have, another relapse.
In 1884. there was a succession of
ups and downs without definite trend,
and yet, as the chartists say, the signal
given in 1882 was never retrsced. The
market continued to say that.
although possibly recovery had not yet
definitely appeared. the worst of the
depression was over.
Advance For Nine Months.
This brings us down to the year
Just closed. the first since the major
turn when there could be doubt in no
ones mind as to the character Of the
movement. In one of the most con-
sistent movements Of record. the stock
market advanced from March to No.
vember. During these nine months
there was no reaction worthy of the
name. In that respect; the 1885 mar
ket was unique. There was nothing of
the spectacular about it. volume of
trading was moderate. measured by
the pre-depression standard, the rise
was slow and deliberate, and. curl
ously enough, one from which. the
average Wall Street trader prof1ted
very little.
The only spectators who made
money were those who bought their
stocks and stayed with them. The
''in-and-outers" lost trying to catch
the turns. The floor trader, who, in
other days. reaped rich rewards no
matter which way the market was
going. lost. Guiding himself by pre-
cedent repeatedly. he sold short to
anticipate a reaction which did not
come.
The "tape-readers," who, in other
bull markets. prided themselves on
their ability to forecast movements in
special stocks to their own gain, found
themselves out of touch with the new
order. The experts. who relied on
curves and points of resistance and
all the other technique of the chart,
were lost in the shuttle. 1t was plain
that some influence not heretofore
seen was at work in this 1885 upsweep.
Securities Act Studied.
No one explanation sufices for these
differences between the market action
now and that of other advances. A
good deal of the credit, if credit is
the proper word. must be given to the
securities and exchange act.
There are plenty of cynics in the
street who will tell you that the pools
operate just as they did before the
DAYS of Government control. That is
not true.
There are plenty of board room
chair warmers who still believe in
"they," that mysterious entity which
puts stocks up and then puts them
down. always winning and never los
ing, omnipotent and omniScient, the
maneuvers of which, If they could only
be found out, would make any one
rich. There never was much basis
for this superstition; there is none
now. Undoubtedly there are groups
which pursue the same ends. but they
are not formally organized and their
ability to sway the market as a whole
is negligible.
Overtrading Eliminated.
A good deal must be allowed for
the stringent margin requirements.
Much complaint was heard about the
complexity Of the regulations. but the
result was to eliminate overtrading
and so keep the market technically
strong. That was one reason why the
reactions were so slight and why they
did not produce liquidation.
Probably never before in a buoy
antly rising market we're there so few
weak accounts. It NAV be that this
condition will change If the advance
persists.
A second reason for the uninter-
rupted character of the advance was
the large amount Of buying for cash,
Stocks were bought and paid for ana
taken out of the market. Until late
in the year, thers was no substantial
rise in brokers loans, and all through
the IL months the ratio of borrowed
funds to the market value Of all stocks
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