The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1909-06-18
COMMERCIAL SPECIALLY REPORTED
PRICES FALL In
STOCK MARKET

NEW YORK, June 17s-Speculative de-
fation, which took on the symptoms of
collapse was effected in the stock market
today. The violence of the break Game as
& surprise, in spite of the 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. which undertook Op-
creations on the short side based on this
situation, has met opposition often in
the shape of powerful support of the
market, that the ability to hold prices or
advance them had come to be relied upon.
The withdrawal Of that support undoubt-
edly viii be an important element in the
weakness which swept over the market
today. OF course the decline pro-
oeeded, the food of liquidation increased
very much, but it was notably heavy at
the outset.
At the opening selling was well abb
sorbed and an effective rally was achieved.
At that point stocks began TO come out
again. partly from those important in
terests which bought yesterday to check
the threatened decentralization then, and
which sought the earliest opportunity to
resell their takings and partly from the
organized bears, who had strengthened
their position by large covering operations.
As prices crumbled away, margins were
wiped out and stop loss orders uncovered,
and soon after midday the market was de-
moralized.
Developments in the copper trade have
impressed sentiment very unfavorably in
consequence of the suspicion that specula-
tive forces have been at work in the
market for the metal to sustain the speou-
lstion in stocks.
European copper trade statistics show
how a large part of recent and current
American exports are going into wae-
house stocks abroad, rather than into con-
sumption. This showing had effect or
sentiment regarding the steel trade,
where the current active demand still con-
tinues, but with the possibility, as in the
copper trade, of an accumulation of stocks
that may prejudice later demand.
Some Of the sellers expressed sppre-
hension that President Taft's special mes
sage regarding income and corporation
earning tax might be a prelude to revival
of agitation against corporations. The
paragraph dealing with the incidental ad-
vsntages of the increased powers of in
QUESTION into affairs Of corporations grow
ing out of the proposed tax on earnings
seemed to be regarded of sinister i'm
port to corporation management.
The simple declaration of 2 per cent
semi annual dividend on Reading yester-
day contrasted so vividly with the
rumors which induced the recent advance
in the stock to near 16o, that a realiza-
tion was awakened of the large part
played by pure speculation helped by
manipulation in the extension of the pro-
longed advance in prices.
This realization, applied to the stock
market as q whole, had much more to do
with the days heavy liquidation than any
fresh incident in the news. The extensive
covering by shorts in the process of realiz-
ing bear profits relieved a substantial
part Of the extreme declines, which ran
to 81 and nearly 5 points for the
stocks most acutely affected. The clos
ing tone of the market was unsettled.
United States bonds were unchanged on
call.
Bonds were irregular. Total sales (par
valued. 81, 042. 600.