WALL STREET SLUMP

Wanganui Chronicle, Volume 72, Issue 287, 3 December 1929, Page 11

WALL STREET SLUMP

SMALL BRITISH LOSSES SELLING PRECEDED CRASH The recent slump in the Wall Stret* stock market apparently did not caus< many British casualties. Trust com panics and individual investors hav< evidently been taking their profit foi some time past and have in consequence realised substantial gains. The following comment of the Bri tish Press indicates th e general satis factory position of British investors. The Daily Chronicle says: “Th< slump in New York which had a substantial effect on certain shares in London was largely responsible for the improvement in sterling and should eventually make for more stable monetary conditions in this and other countries as well as the United States.”

The Daily Telegraph says; “A distinguished financier protests that there is absolutely nothing in general conditions to warrant pessimism and that the deluge of selling yesterday performed a great economic service in pumping tong of water from a number of highly saturated securities. The unfortunate fact remains that good issues as well as questionable were almost equally affected by the series of crashes which excited dismay and fears for the financial structure at » tim e when industry remains good' and there was no immediate prospect of a big drop. London bankers agree that the chief cause of panic conditions must be attributed to the technical inefficiency of the present methods of dealing with such a tremendous and unexampled amount of business.” The Daily News says: “The acceleration of the continuing slump on the New York Stock Exchange raises the question of what effect it may have upon tho undoubted prosperity and increasing earnings of American industry. That was the basis from which the long-lived boom originated. The mentality of American speculators has carried share prices ahead far quicker than the industrial earnings, as boom psychology always does.” The Morning Post observes: “ Fortunately there i s every reason to believe that the banking authorities in tho United States have been well prepared for the likelihood of a severe reaction and are in a strong position. Nor is there reason to suppose that the heavy losses in the market values should have unduly disturbing effect upon the Stock Exchange here. At the same time it can scarcely be expected that the London market should be entirely immune, for many shares which have fallen heavily are popular favourites in London, as well as New York. Moreover, the slump comes at a moment when certain sections of the market ar e still under the shadow of losses arising out of the slump in the Hatry group of shares though, of course, quite different interests are affected, and in many shares which are now affected, by the American slump verv extensive profits must have boon made in th e past 12 months. Unfortunately, however, experience shows that speculative profits are not usually reserved as a hedge against possible slumps, and the heavy fall, if there is no recovery between now and the last, fortnightly settlement, must inevitably occasion a certain amount of anxiety. It is only fair, however, to remember that many shares concerned in the present collapse, although they have been rushed up to unduly high levels as the result of prolonged speculative activities, are nevertheless connected with sound, prosperous undertakings, and would not be surprising if following np on the panicky fall there were to be some fairly substantial recoveries a s a result of re-purchases in Wall Street.”