HUGE LOSS.

Auckland Star, Volume LX, Issue 255, 28 October 1929, Page 7

HUGE LOSS.

AMERICAN BUSINESS.

Long Time Before Confidence

Is Restored.

MR. HOOVER'S OPTIMISM.

(United P.A.—Electric Telegraph-Copyright)

(Received 10.30 a.m.)

WASHINGTON, October 27

Leading brokers of Wall Street believe that it will be six months or a year before buying with confidence is re-established throughout the country, following the terrific reverberations of Thursday, which resulted in the loss of £200,000,000. The President, Mr. Hoover, yesterday issued a statement bearing out earlier declarations by Treasury officials and industrial leaders that business declines were in no way responsible for the break on the stock market on Thursday. He asserted that the fundamental business of the country is on a sound and profitable basis. At the same time the Federal Reserve Board issued a detailed analysis of business conditions. This pointed out that industrial production in the United States is far above last year's level. However, neither the analysis of the board nor Mr. Hoover's statement referred directly to the break on the market. The President referred to declines in the construction and building material industries and to seasonal declines in other industries as movements of a secondary character when they were considered in the whole situation. The construction and building industries, he said, had been to some extent affected by the high interest rates induced by speculation.

The best evidence was that although production and consumption were at high levels the average prices of commodities had not increased and there had been no appreciable increases in stocks of manufactured goods. Moreover there had been a tendency for wages to increase and the output of workers in many industries to show an increase. All of which indicated a healthy condition.

The temporary drop in grain prices in sympathy with Stock Exchange prices usually happened. But, as the Department of Agriculture pointed out, the outstanding fact about grain was that this year's world wheat harvest was estimated to be 100,000,000 bushels below that of last year, which would result in a very low carry-over at the end of the harvest year.

Selling activities on the Stock Exchange yesterday morning forced prices down again, but the market as a" whole moved' only slightly. Dealings were on a modest scale compared with those of the last two days.

Prices generally declined 4 to 8 points. The selling was ascribed to further liquidation of poorly margined accounts. The belief also is expressed that it resulted from the unloading of the support stocks brought by bankers in the recent break.