Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-06-18

violence of the break in prices in the
stock market today came as a surprise,
in spite of the frequent expressions of
distrust lately of the high level of prices
and of the extent to which borrowed
money was being used to carry stocks
on margin. The bear party in the spec
ulation which undertook operations on
the short side based on this situation,
has met insuperable opposition so often
in the shape of powerful support of the
market that the ability to hold prices or
The withdrawal of that support undoubt-
eddy was very important element in
the weakness which swept over the mar
ket TODAY. Of course as the decline
very much increased, but it was not not
ably heavy at the outset The opening
selling. in fact was well absorbed and
an effective rally achieved. At that
partly from those important interests,
which brought yesterday to check the
threatened decentralization then and which
sought the earliest opportunity to resell
their takingS, and party from the organ
lied bears who had strengthened their
position by large covering operations. As
prices crumbled away margins We're WHIP
ed out and Stop-loSS orders uncovered,
and soon after midday the market was
demoraliZed. Probably no one factor of
the several which We're discussed was re-
sponsble for the break and all combined
might have been passed over in specu-
latiVe position less vulnerable to attack
Developments in the copper trade in the
last few days have impressed sentiment
very unfavorably, owing to the suspicion
engendered that speculative forces had
been at work in the market for the metal
to sustain the speculation in stocks; A
slump in the copper metal market in
LCrdon today reinforced this suspicion.
The later stages of the movement to
secure admission of United States Steel
to the Paris Bourse made bad i'm
preston in spite of the proteStations Of
harl;aCc nj their confidence in the milf
mate success of the plan. Doubts have
grcwn up on the subject and the tone of
the stock market is greatly prejudiced by
these doubts. owing to the heavy stress
land on the project in it's early stages
as a warrant for indefinite advancement
of prices. There was some comment on
tile coincidence Of the appearance of the
report of the Hughes committee on the
exchanges and the break in the stock
market Members of the Stock Exchange
however. We're disposed quite generally to
profess satisfaction with the contents of
the report. Practices which have been
under criticism such as short selling, re-
striction of distribution of quotations,
ana even manipulation. are distinctly de-
Tended or commended in the report.
Some of the sellers of stocks profeSsed
apprehension that President Taft's special
message regarding an income and cor
poraton earning tax might be prelude
to revival of agitation against corpora
tons, The paragraph dealing with the
Incidental advantages of the increased
powers of inqustion into affairs of cor
porations. growing out of the proposed
tax on earnings. seemed to be regarded as
of sinister report to corporation man
agement. The simple declaration of .
per cent. semi-annual dividend on Read
ing yesterday contrasted so wildly with
the rumors which induced the recent adj
vance in the stock to near 1G0 that real
ization awakened of the large part play
ed by pure speculation helped by manip-
nlation in the extension Of the prolonged
advance in prices.
This realization applied to the stock
market as q whole. had much to do with
the days heavy liquidation than any
fresh incident in the news. One such in
cident mentioned by the traders as a
reason for the unloading of stocks was
the reported firing on British ship by a
Russian government vessel. The extern
sive covering by shorts in the process of
realizing bear profits retrieved a substan-
tial part of the extreme decline. which
| ran to 81 and nearly 5 points for the
stocks most acutely affected. The closing
tone of the market was unsettled again
Bonds We're irregular Total sales, par
value, $5O42,0O0. United States bonds were
unchanged on call.