STOCK EXCHANGE

Hokitika Guardian, 1 November 1929, Page 5

STOCK EXCHANGE

BROKERS FIRMS SUSPEND. [United Press Association—By Electric Telegraph.—Copyright.] NEW YORK, October 31. As the result of the crash in stocks, four brokerage firms have suspended business. Two of these are small kerb exchange firms here. The others are doing business elsewhere.

SLUMP EXTENDS TO HOLLAND. AMSTERDAM, October 30. According to “ The Telegraaf,” the losses oil twelve stocks on tho Amsterdam Stock Exchange in two days have exceeded thirty-six millions sterling.

CAUSE OF COLLAPSE,

VARIOUS OPINIONS

(Received this day af 9.25 am A NEW YORK, October 31. Opinions, regarding the initial incentive to the recent Wall Street collapse differ variously, but it is agreed in practically all quarters that the basic causes were purely technical and psychological. Thus it is asserted by some that the crash of Hatry brothers interests in London was the first impulse towards the New York decline. They reason that the Hatry failure caused a heavy selling of American securities, which paved the way for a general run, not only because many stocks were thrown on the market but also, because the .loss of confidence became international in aspect. There are others, however, who as-

sert that their elements which had suffered severely for a long time past, in - hull markets, took advantage of the first; opportunity when what should have been onlyl a temporary reaction set in, to send the list crashing. The facts remain, However, that neither the Hatry collapse nor even the most strongly organised, hear movement fcould have affected the market to such an extent, had its technical position been strong, hut'this was not, the case, for this break emphasised the importance of the fact that it is not so much a question of the level of the market that determines the stability of the price structure, as it is who owns the stocks on which probably lies the whole answer to the disastrous slump. It is admitted on all sides that for some time past an enormous number of people w£re nibbling in the market who had no right whatever to be there, and no substance with which to withstand any severe reverse. During Wall Street’s many prosperous days large numbers of even small traders made considerable profits, after which the speculation fever grew and prices in many individual rose to heights unjustified by current or expected, earnings. Thus the earliest stage of the decline received the greatest impulse from the liquidation by holders of securities, whose margins had been uncovered, or who were threatened by a possible increase of recession. Thereafter the remainder of the story was the pure psychology of fear. The smallest traders first ran panic-strick-en, their numbers increasing in snowball fashion as the word spread that tho market was falling. In exactly the same manner runs are caused occasionally on even sound banks.

REDISCOUNT RATE REDUCED NEW YORK, October 31

The Federal Reserve Bank of New York has. reduced the rediscount rate to five per cent placing New York on a parity .with eleven other reserve institutions. Call money irate of renewal was at six all day. The stock market rallied a further five/to thirty dollars per share active issued. There was a tremendous buying wave.

TREMENDOUS DROP IN VALUES

BOTTOM BELIEVED TO HAVE BEEN REA'CHED.

(Received this day at 9. a.m.l NEW YORK, Oct. 31

After the smell traders had been cleared out, bigger and more stable ones, who had watched their departure with considerable satisfaction, began to taste the same medicine, They found that a feeling of anxiety had attacked even some of their own number, and the same process was repeated in exactly the same manner. At first several large holdings were thrown in for anything they could bring. Then enormous members of wealthy traders lost their heads, throwing vast investments on the market, the selling being accompanied by as great excesses as were previously witnessed in the “hull’ markets. Moreover, many of even the “bear'’ element ultimately lost out, because uiey themselves never anticipated suJr a tremendous drop in values. . It is now regarded in best informed circles, however, that the bottom has been reached and that good investments are obtainable at bargain prices, that confidence is re-started, that the market is recovering after a necessary major operation.

PRICES RISE AGAIN. NEW YORK, October 31

The Stock Market closed with anm other whirlwind finish, many issues ™ furnishing spectacular rises. Orders poured in from all sections of the country for the short three-hour session, and the market opened at noon with a spectacular rush of buying. The total sales were over seven million shares with prices in many instances up one to forty points. Some had risen as far as 73 points in early trading, hut met the inevitable. Profit taking then started upward again in a more orderly