Adjectives Squandered

At 10:05 o'clock on the morning of Nov. 7, every stockmarketeer knew that the promised Hoover Market had arrived. Stocks opened 2 to 5 points above the close on Election eve, an advance which financial writers hailed as "sensational." It was a reckless and foolish squandering of a potent adjective. Last week, when the Hoover Market had attained truly "sensational" proportions, writers had no words to describe it. They had recourse to figures.

Figures. Most important among last week's figures were daily records of volume.

Day --Shares

Mon . . . . . . . . . . . . . . . . . . . . . . .5,040,750

Tues . . . . . . . . . . . . . . . . . . . . . . .6,503,230

Wed . . . . . . . . . . . . . . . . . . . . . . .6,014,855

Thurs . . . . . . . . . . . . . . . . . . . . . . 5,837,600

Fri . . . . . . . . . . . . . . . . . . . . . . . . 6,954,020

Total . . . . . . . . . . . . . . . . . . . . . .30,350,455

Never had such a total been rolled up in five days. Obviously, it challenged explanations. Most plausible, most demonstrable, was the theory that the public, in general wary of Wall Street, is now possessed of a great desire to trust all its savings and all its credit to common stocks. Few professionals and not many amateurs have lost either savings or credit as a result. Not every one of the 1,131 listed stocks has advanced in the Hoover Market, but few have gone off. Certain stocks have appreciated 75% and even 100% in value. For a fair view of the more spectacular aspects of the Hoover Market, investors might consider this table:

--Oct. Low --Nov. High

Radio . . . . . . . . . . . . . . . . . . . . . . . . . . .198 1/2 . . . . . . 384

Mont. Ward . . . . . . . . . . . . . . . . . . . . . .248 1/2 . . . . . .428

Case . . . . . . . . . . . . . . . . . . . . . . . . . . . .354 3/4. . . . . .515

Kenn. Copper . . . . . . . . . . . . . . . . . . . . .208 5/4 . . . . .224

Gen. Motors . . . . . . . . . . . . . . . . . . . . . 98 1/2. . . . . .148 1/4

Anaconda . . . . . . . . . . . . . . . . . . . . . . . 79 7/8. . . . . .114 3/4

DuPont . . . . . . . . . . . . . . . . . . . . . . . . .390 . . . . . .503

Amer. Smelt . . . . . . . . . . . . . . . . . . . . .238. . . . . . .285

Greene Can . . . . . . . . . . . . . . . . . . . . . 121 1/4. . . . . .173

Mex. Seaboard . . . . . . . . . . . . . . . . . . . .30. . . . . .70

Sinclair Oil . . . . . . . . . . . . . . . . . . . . . . 27 5/8 . . . . . 45 3/8

Gen. Electric . . . . . . . . . . . . . . . . . . . . 157 5/8. . . . . .193 1/4

Westinghouse . . . . . . . . . . . . . . . . . . . 100 1/2. . . . . . 144

Int. Harvester . . . . . . . . . . . . . . . . . . . 286 1/4. . . . . .394 3/4

Johns-Manville . . . . . . . . . . . . . . . . . . .148. . . . . .194 3/4

Natl. Bell. Hess . . . . . . . . . . . . . . . . . . 121 3/8. . . . . . 178 3/8

Kolster Radio . . . . . . . . . . . . . . . . . . . 70 1/8. . . . . . . 95 7/8

Victor . . . . . . . . . . . . . . . . . . . . . . . . . 107 3/4. . . . . .158 3/4

Wright Aero . . . . . . . . . . . . . . . . . . . . .156. . . . . . . . ..289

If an investor had bought and paid for one share of each of these stocks in October, his bill would have been $3,143.00. In. November he could have sold them for $4,533.50, realizing an average profit of about $75 a share. Actually, much paper profit was turned into cash on the market's only day of weakness (Wednesday). The Wall Street Journal reported that the Brothers Fisher sold their 300,000-share holdings of Radio. Their investment cannot have netted them less than $30,000,000, may have made $50,000,000.

Speculators were not alone in profit making and taking. Average earnings of brokers reached $3,000 daily. Some members sold their seats for $530,000 and $575,000. Others refused offers of $610,000. In January, these seats were worth $290,000. In 1923, they brought $76,000.

Bears. When Radio broke a few points on Wednesday, the market tumbled swiftly after. Johns-Manville lost 9 points; International Harvester, 13; Adams Express, 10. Case Threshing Machine, "rich man's stock"*, dropped 19 3/4 points, closed 475.

Bulls called this reaction "corrective," "salutary," "reassuring." But the market's stubborn bears held it an omen of a real break to come. On the same day, Economist Virgil Jordan of the National Industrial Conference Board, spoke Spanish words at the Hotel Astor (Manhattan). He warned: "Prosperity in the present situation is rather a state of mind than a fact. ... It is an illusion created by extraordinary financial conditions, by exceptional activity in production of certain types of goods. . . ." These goods, he noted, included many luxuries, few necessities. He cited depression in industries producing food, clothing, coal, transportation. And a few blocks distant, President Daniel Willard of the great Baltimore & Ohio R. R. rose in the Hotel Commodore to add: "Since 1920, railroad earnings have fallen short of a 'fair' percentage by $2,000,000,000."

But last week's market heeded neither warnings nor signs. It ignored:

1) A sudden stopping of gold shipments from England, together with the loss of $6,000,000 gold to Canada.

2) A $176,315,000 increase in the total of brokers' loans, bringing the total to $5,157,132,000.

Machines. Hopelessly overtaxed, the market's machinery halted Friday night, attempted to catch up over the weekend. Early in the week, the ticker had run two hours behind the market. Exchange authorities ordered the omission of volume figures on the tape. To supply the press with the figures, Western Union sent to Chicago for telegraphic printing machines, chartered six compartments of the Twentieth Century Limited to carry them swiftly and luxuriously to Manhattan. Even without volume, the ticker ran 49 minutes behind in Friday's session.

As acute as the ticker problem was the telephone congestion. Most stock market orders pass through the "Hanover" exchange. On Friday, harried operators handled between 85,000 and 100,000 calls an hour. Telephone officials planned to divide the burden between lower Manhattan's seven other exchanges./-

* Because of its high price per share. Stocks selling at $500 or more are members of the "500-Club." Case joined the "500-Club" on Friday, when a 3-inch strip of ticker tape showed amazed brokers these quotations: 485. 490. 1. 493. 495. 499. 503. 506. 7. 509. 10.

/-Rector, Cortlandt, Bowling Green, John, Beekman, Barclay, Whitehall.