Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-12-27
ALL SORTS OF CAUSES
ASSIGNED FOR ADVANCE
Ascribed to Blunder of Speculator
Who Had Unduly Celebrated.
EXCHANGE TO TAKE ACTION
Theory That London Had Been
Forced to Buy to Meet Calls
Abandoned by the
Brokers.
Special Dispatch to The Star.

NEW YORK, December 21-One of the
most sensational movements that the
stock market has been since the memo
rablo panic of May q, 1901. when James
J. Hill and E. H. Hartman fought for
control of the Northern Pacific. took
place this morning in Rock Island COM
mon stock Immediately after the opening
OF the stock market. Ins de of fifteen
minutes the stock advanced from 5Uss to
81 and returned as rapidly to close TO
its opening figures. Thousands of shares
changed hands between those prices in
d wild scramble of the shorts to get
under cover. In the meanwhile the rest
of the market. threatened with demorali
zation. hesitated; stocks rose in SYM
pathy with the advance in Rock Island.
wavered uncertainty and then fell. Be-
fore they could decline seriously, how
ever, 1t was recognized that the move
ment in Rock Island was under control
and SO the market in general was saved
from the threatened danger.
All sorts of reports were circulated in
Wall street to account for the extra
ordinary and mysterious move in Rock
plausible. none seemed in itself adequate
to explain the rapid'ty and scope of the
precipitate rise and fall.
AOQQO0 Sel10& snort.
1t was believed that Londen was the
principal sufferer at first, as 1t is mat
ter of common knowledge that London
has been selling calls on the stock for
several weeks past and has been sell
ing the stock itse short In oder !. !.
make deliveries and to meet the calls
London was forced into tcday's market
at the most Opportune time for the manip
ulators of the stock, since today the Lon
don exchange is closed.
Rock Islands Meteoric Rise.
The movement which caused so much
excitement started within a few minutes
after opening of the general stock mar
ket and began with Rock Island COM
mon itself at the first quotation of that
stock on the ticker. Friday 1t mad closed
at 49a4, about an average price for the
security. This morning the stock opened
at JOts for 600 shares. The quot -tion con-
tinued 900 at 5OA, 100 at 514. POO at 81.
500 at o. and the next quotation was
at S. From there on it went up, point
at a time. and sometimes more tnan }
points at time. for foot or more of the
tape, and for several thousand shares. to
50. In another moment it was selling at
81. with all the stock offered that any
one would take.
Then it broke rapidly, under heavy SELL
ing by the aroused traders and commits
sion brokers. point by point to 7S. sud
denly collapsing and dropping as rapidly
as it had risen, until at about 81 1t found
resting place and the furry was all
over.
It was practically ten-second panic
the time it took the floor traders to tell
the commission. houses and their offices
what was going on.
all the movement, a fact that makes any
suspicion that a corner was attemp ed
show itself at once to be an abSurdity.
Scattered around. the street were undoubt
edly something Ike 20O O0O shares of long
stock, but it just happened. presumably,
because Developments of one kind or
another are expected in the Rock Island
road, that there was no great accumula-
tion of selling orders for the stock.
Some Ones Blunder.
On the other hand, it is certain that a
number of brokers had orders to buy
the stock lat the market" Whether
these buying orders were supposed to be
matched by selling orders may never be
known. but apparently they were, and
in this connection some one had
blundered-
One story that gained strepgth as it
circulated was that we'll known
the whole episode being the re-
suit of a Christmas prolonged beyond
what was prudent
The stock exchange governors will
meet this afternoon and ex-
pected to take immediate action i'll in
vestigat:ns the skyrocket movement, al
though at the exchange this morning the
greatest reticence was maintained on the
W hole subject, both by officers of the eX-
change and brokers.
1t was felt that the occurrence was
likely to affect public sentiment SO seri-
ousiy as to do considerable harm to the
exchange and its members, and. while
no statements were issued by the gov
ernOrs. and they declin ID to discuss what
had happened, the general belief is that
their action will be drastic when il does
come.
London Theory Abandoned.
After time had given the brokers
chance for reflection they abandoned
the theory that Rock Islands meteoric
rise was due to the buying of stock to
meet calls in London. II was pointed
out that the English method of selling
privileges on stoc-.s admits of presenta-
ton of a put or a call until the day when
the privilege expires.
These privileges always mature on the
option day that is included In the fort
nightly settlement. The last Op.ion day
was Thursday. December 2s and the
that it is hardly likely that English /,
brokers would hurry into this market to
buy Rock Island today, when they have |.
any time within ten days to get IL
cheaper.
AS ii was the Rock Island epis de was
merely flash in the pan and not any /
real fight to corner the shorts, or, VIII 1t |
is next to impossible. as well as in the |
greatest degree improbable, an attempt to |
wrest control of the stock from it's |
owners.
And a great many signs point to the |
conclusion that it was from one OF its |
friends the stock received its rough treat |
ment. If the facts are as they seem. /
Christmas in 1909 was the most expensive |
celebration for one man that he has ever |
known.
At noon the market was quiet and |