WALL STREET PANICS

Dominion, Volume 31, Issue 74, 21 December 1937, Page 14

WALL STREET PANICS

Extent Of Equity Revaluation

11 would appear that the bear market of 1937 culminated iu the two days ot panic on Wall Street on October 18 and 19. says the New York correspondent ol the “Economist.” On the 19th, with a turnover of more than 7,009,000 shares, the market collapsed and then rallied vigorously. Within three days average prices had recovered almost one-thnd ol the entire ground locst csinee early August —which represents merely retracing the ground lost in seven market hours on the two days of panic. This revaluation ol the equity in American corporate enterprise can be variously assessed. from the top pi ices of 1937 the average prices of representa•live shares fell nearly 50 per cent.-—in-dustrials rather less and rails rather more. A numerical majority ot all shares fell more than 50 per cent.; and declines of more than GO per cent, were not uncommon among non-dividend paying stocks. ' In early August the very few highest grade equities were selling to yield about 3 per cent, on actual dividends. On October 19 those same equities had fallen to about a 5 per cent, basis. The falls in other dividend paying shares were similar, that is, from a 5 per cent, to an 8 per cent, basis, or from a O per cent, to a 10 per.cent, basis, and so on. Thus, in spite of hysteria and panic and the appearance of demoralisation, there ran through the decline the pattern of a capital rate structure in process ot realignment. From the high prices quoted in August to the extreme low prices ot October 19, the measure was that of_a readjustment from 3 per cent, to y . per cent.; the final rally immediately lifted those issues to about a 4 per cent, basis. Another assessment relates the present level of security values to the lowest prices of the depression period. On October 19 utilities were quoted at about t ie low levels of 1932, rails at double the 1932 lows, and the industrial average still at three times the 1932 lows. The current level of the Dow-Jones industrials is approximately that of the memorable third week of September, 1931.

Top Price For Wool

Top price of 201 d. for four bales of super halfbred ewe wool sold on behalf of J. F. Scott, Mount Pleasant, was paid at the Christchurch wool sale on December 13, reports the Christchurch “Star-Sun. This was purchased by a local mill, tbe Kaiapoi Woollen Manufacturing Co., Ltd.