The Washington herald., 1907-05-26

that il had been completed What had
occurred Oh Thursday and Friday was
merely a temporary suspension of Hqui-
dation to allow the market 10 right itself
and afford an opportunity for a rally
against the shorts. How much liquida-
tion yet remains TO be accomplished is
a matter very difficult Of determination
and the guesses on the subject are about
as wide as guesses usually are where
there is nothing tangible to afford a basis
of estimate.
II the short interest was as great as II
had been made TO appear by the demand
for stocks in the loan crowd on Friday.
the shorts displayed a wonderful tenacity
in retaining their position under clrcum-
stances that seemed 20 threaten them
with determination. But, of course, Il is
practically certain that the short interest
was of no such proportions as the bor-
rowing demand for stocks was made 10
Indicate. There was as much mauipula-
tlon Of the lOaniug rates for stocks as
there had ever been Of prices and an foT
the purpose OF intimidating the short in
telcst and forcing it into "a covering
movement Many houses having stocks
that they could lend have made no effort
10 lend them. because they have all the
money they heed for the very small
amount of business they are doing at
present. and because they do not wish 20
help the bears. The number of houses
offering stocks I'm the loan crowu e. small
while the borrowing demand is heavy
largely, il is supposed, because some
sellers of long stock are borrowing in
order 90 avoid making deliveries Of GER
tiicates in their own names. which would.
Of course, make IL clear that they had
liqudated
Assuming that there Is large short
interest i'm the market, its position is al
ready easier than it was on Friday. the
renewal of liquidation having increased
tne supply of stocks from which the
shorts may obtain their requirements for
the covering Of contracts.
United States Steel was the center Of
interest in the market II was one Of the
first stocks to display weakness. and 10
continued notably weak TO the end
For this characteristic there was no ex-
planatlon, all the talk of a bond issue
having become totally discredHed. and
all that the most intelligent observers on
the floor could say rs a result OF their
obseryances was that liquidation was in
progress, or that there was a bear party
az work IN the hope Of forcing out stock
That the bear party. such as is now at
work in Wall street. should make a Wig
Or0us attack on Steel is not unnatural. I'm
view Of the fact that this stock is gen
orally regarded as the king pin Of the
market It IS playing for a big stake.
and while the chances are against win
ming. the prize is So big that daring spec
ulatoTs are willing % take a heavy risk in
trying 10 secure IT, Holders Of Steel
held through a period at the end Of last
winter when the prospects Of their com
pany Were not so bright as they are to-
day. and 10 will be strange If they let 90
now, when business is coming into the
company at a better rate than any one
anticipated a couple OF months ago. The
speculator may be forced 70 let go. but
the investor should not be disturbed.
Erie was affected by the announcement
that a number of machinists employed bv
the company had gone on strike. the
traders arguing that If the road was left
without machinists for any considerable
length OF time the efficiency Of its motive
power would soon deteriorate.
The argument in one sense was logical.
as deterioration Of motive power would
increase the relative cost Of doing bust
ness. besides reducing the roads capacity
for the handling Of t3rfic. but where it
was entirely illogical was In assuming
that the strike would continue long
enough to cause any real deterioration of
the kind spoken Of The old precept.
Never sell stocks on a strike" seemed
to be forgotten. although it is a good one.
On the subject Of the renewed outbreak
Of liquidation in the stock market, the
weekly letter of a conservative house
says:
"The street is full Of theories on the
subject, any one Of which might be cor
rect, the favorite being that spectators
helped over a couple Of months ago have
lately been compelled to assume their own
burdens. and. unable TO bear the load
have thrown some Of their stocks upon the
market. This IS reasonable enough. and
there is nothing unreasonable in the sup
position that other spectators who passed
scatheless through the break Of March
II have become discouraged over the lack
Of support to the market at this time. and
have begun to unload their holdings. fear
ing a worse break than we have vet seen
The names of some very prominent
men have been mentioned as among the
sellers Of stocks. but We are always sus-
picious Of such reports, for there are so
many ways by which the large interests
can conceal their operations that the out
slider sees only just what they want him
to see. If they are willing TO convey the
impression now that they are selling
stocks it is entirely possible that their
purpose is to encourage the further
growth of a short interest. To our
the market has already as
sumed unwieldy proportions. We venture
70 predict that II an orga nized effort was
made by strong interest to advance
prices. the covering Of shorts would suf-
fee to lift the market well above its pres-
ent level Whether any attempt win be
made at present Is the question, and the
answer must depend upon the amount %
stock yet to be liquidated
Curiosity is keen in some quarters as to
the Identity Of the seller of a large block
of st. Paul alleged to have changed hands
recently at private sale. The amount Of
stock figuring in the transaction is said
to be 5000 shares, made up Of some %. 600
shares Of the preferred and 10.0 coo shares of
the common. There are circumstances
which point to well-l1nown speculative in
terests about to retire from business as
the possible sellers
That these interests are about to retire