The Washington herald., 1907-03-16
STOCK PANIC AT END
Normal Conditions Expected
to Prevail by Monday.
NO FAILURES ARE REPORTED
sagging Movement May Follow Rise,
Due 10 PrOft-takins-Lond Is Ac-
tive Buyer, and Prices Are Up from
Three 10 Ten Points-ActiOn Of the
Secretary of Treasury Praised.

sued in the security market IN times Of
6isturb2 noes that rise 10 the dimensions
of a veritable panic is so regular as 70
be considered as a matter OF course In
stock exchange consideration. The period
OF acute excitement in the market does
not usually last more than three days
There is in the first place, a break in
prices. either entirely. Unexpectedly. or
more or less foreshadowed. as the case
may be, followed. as a rule, on the second
day of the commotion By extreme de-
moralzatin when the panic reaches its
height
The selling of stocks often runs into the
third DAY, so that sometimes the low
prices are then seen, but generally not
later than this a violent recovery sets
in caused by a covering" OF stocks by
the short interest, as hastily conducted
as was the previous liquidation by buying
by small investors whose attention has
been attracted by the low levels recorded,
and by support extended to the market
by banking powers and capitalists OF the
first rank, usually in pursuance of Il con-
centrated purpose to stop the decline.
Often, too, either announcements of "a
favorable financial nature are made or
the evil development that caused the
break becomes public so that il is realized
that whatever blow the market was TO re-
ceive has already been dealt
Depression Expected to Follow.
This recovery in prices often takes place
with great quiclness. and not infrequent-
ly retraces half way the path taken by
the previous decline When It ceases.
the market is very apt to become dull
and to begin "a slowly s3gsing movement,
in the course OF which prices fell almost.
if not wholly. as low as they did during
the panic. The procedure thus outlined
is necessarily of vague and general char
acter. but it is easy to understand the
broad force Of the reasons that caused it
TO be followed. The residence of the
market after the extreme exertlon of
pressure against il is wholly natural and
similarly, after the rebound. there is no
difficulty in understanding why stocks
should again recede.
Values become deprived of the support
Of the short interest Spectators and
commission houses are weary Of what
they have gone through. and there is a
tendency OF their part TO sell stocks and
abandon the market upon the favorable
opportunity thus presented.
There is good deal Of necessary
liquidation for the account Of these who
have been carried over the difficulty
and as the market moves once more 10 a
level considerably higher than il touched
during the period Of greatest strain. the
bargain counter or stocks does not pre-
sent such alluring invitations as it did
before II is, too generally remembered
that the forces that have made for tho
depression are still in existence, and that.
although it may be that their full effect
has been measured yet a considerable
time must elapse before there can be any
confident resumption Of an upward move
ment. II was pretty clear to-day that
the market had entered at least upon
that phase Of this general movement
known in Wall street as the quick
rally
Rush to Buy stocks.
London prices for American stocks be-
fore the opening Of business were quoted
at advances ranging from three to ten
points, ana there was a general rush here
10 buy securities, All the houses dealing
I'D fractional lots of stocks for small in
Vestors had multitudinous orders for Dur
chaseS. and spectators for the decline
almost 10 q man stood not upon the order
of the buying, but bought az once. Under
the impulse Of ali this the market opened
at advances fully as great as those made
in the London market.
After the FIRST quarter Of an hour of /
trading prices once more began 70 display I
weakness, only TO again show renewed |
strength, and feverish up-and-dovyn move
ments Of this character. succeeded each /
other until the close OF the first hour of |
business in the afternoon. Large and gen |
eral buying Of stocks set in. ard the mar /
ket closed at net gains for the standard /
<
general advance being Just about half of 1
the decline that took place on the two /
preceding days.
Probably the market would have acted i
rs II did to-day, irrespective of any devel- /
opments in the days news that might 4
have been reasonably imagined
The action of the Secretary of the /
Treasury in extending relief To the money /
situation was, il must be admitted. of .
more sentimental than practical bcneft
Tho Secretary announced that he would
not call Ipon the banks i'm the near fu-
tUre for any part of the special deposit |
funds Of public money now resting with I.
them: that he would buy s25000. 600 of the /
government 1 per cent bonds maturing
on July !. at a price which wOuld yield /
TO the owners of the bonds what they
would get for them at maturity. and that /
he would begin TO deposit customs revc-
nues in the national banks under the
terms Of the AldriCh bill 1t is obvious
that the first measure here in detail is
Of more or less negative advantage. that
the second may be effective if any con-
siderable; amount OF the BONDS ara turned
into the Treasury under it. and that the
trade viii not amount to a VaTy great
deal uniess IL includes a direction 10 col
lectors Of customs 10 deposit the moneys
paid INTO their hands in national banks in
cities where there are SubtFeasuries as
well as in cities where there are not.
The wording of the Secretary > order
was somewhat vague, but IL was con-
s'rued to-day to mean that in cities where
there were Su0treasuries-that is to say
the great cities of the country-customs
revenues would be placed in these insti-
tutions as formerly.
Wait for Invitation.
While no definite statement was made
a. to the plans for the much-discussed
meeting between the President of the
United States and the representatives OF
the country's railway systems. the i'm
preston became general that this meet
ing would not take place without some |
direct formal expression of a desire by
President Roosevelt that II should occur;
and up to the close Of business il did /
not appear likely that such invitations
would be extended
The only other incident of importance
during the day was a break of A. points
on sterling exchange. due. Of course, to
the heavy purchases of stocks made here
Tor foreign account and 10 the natural
lending Of European funds here at pre-
Vailing stiff rates of interest
The fail in exchange under ordinary
circumstances would seem TO make In
evitable movement Of gold from London
TO this side. Circumstances. however. are
now far from being ordinary. and ex-