The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-06-16
SEVERE LOSSES AND RECOVERIES
ATTEND EXCITED MARKET.
STORY OF DAY.

FecoVeT1es generally continued under N
side support. Shorts had covered to a
point where there was little demand
from this source, and the market. while
firm, was very duh, differing greatly
from the enormous activity CT the first
three hours of the session AT this hour
Steel common is selling at 671s. a net
gain of =. The preferred is nearly a
OF a point below the hnal figures OF yes
terday. Other industrials show little
change. Sugar. which many people
think viii be made a goat by Con-
gress in return for tariff concessions.
was net L above Tuesdays close
In the rails Union Pacific was s net
higher Northern Pacific about the same
as yesterdays hnal quotation. Reading
was off = point The Goulds were all
very strong.
Dizziness was the chief feature. Trad
ers want authentic news from Paris
NEW YORK. June l6-Stocks were
bought Immediately following the open
ing, but at materially lower prices on
the active leaders. Then there was
some recovery, followed by whrlwind
of liquidation as stop loss order after
stop loss order was caught by the melt
ing values, followed by another recov-
cry as liquidation let up midway In the
second hour Of the session, with moder-
ate recoveries up to the second hour
of the afternoon. when the general list
recovered its losses and made some
slight gains,
There was a reason-in fact there
were several actual and probable as
Wen as possible reasons for the early
weakness.
And during it all the buying Of stocks
at the concessions was excellent, other
wise the result might have been disas-
Ifous- The support came from two or
three sources. The bears who were
none too sure of their position and were
satisfied with the excellent returns
from the breaks; from the West. where
the liquidation was generally accom-
plished last week and the previous
week; from the insiiers-the big private
banking and security interests that
have the manipulation of the market in
hand ana by scslpers looking for the
quarters and half points.
The Chief Cause of Break.
The chief reason for the declines is
supposed to be the failure to list the
common stock of the Steel Corporation
on the French bOurse. At least, the
probability of listing the stock was
accredited with being responsible for the
big advance of the last few weeks.
Hence 1T is but logical to assume that
reported failure caused the loss.
There is no official story of failure.
but two local papers tell the tale, al
leging that the laws of the bourse pre-
vent the listing of stock by other than
the corpora ton issuing it. that the local
steel interests objected strenuOusly 10
the listing Of the foreign shares, and
that the public announcement of intent
20 secure listing was not only Drema-
ture, but in bad taste. Against this is
the repetition OF a story 10 the effect ,
that ais. well"
A COmmonsense Reason
Another reason. and d comnon-sense
one at that. is found in the fact that
prices are admittedly high-very high
having discounted everything worth
while. except the possible intent of the
big men OF the Street who have had the !
market in hand Tor nearly two years, /
70 continue boosting values. While ad- |
hitting the values were high, the specu-
lstive following has seen nit TO follow |
the leaders in the boosting process, but
placed stop-lOss orders freely as pro-
lection against smash These orders
We're caught and. piiing one on top Of
another, aided the market on its slump.
Probable Government Tax.
There was yet another influence, one /
not very much reco6nized-the probable
fly of a tax by the Government on the
net earnings Of per cent. Net earn
ings contemplate az charges by divI-
dends. A cut Of per cent ia net earn
ings would be a serious matter 70 the
holders OF stock in many corporations.
Morning press dispatches assure their
readers that the leaders in the Senate
have agreed 10 support a proposition Of
this kind. and that the President viii
send such a message TO Congress on
Thursday next. 1t IS safe 10 say thar
there would be an unaccOuntable dc
crease III net earnings Of many corpora
Tonss and that much stock preferred /
and common, would be exchanged for /
bonds, as bonds are not taxable under !
the PROPOSED scheme-m only /
national banks are TO be excepted
These reasons and the natural timid- /
ity OF capital We're sufficient 10 Hood |
the market with selling orders immedi-
ately on the tap of the bell. And the /
getaway was tumble-f0iowed by a /
splendid rally.
A Splendid Rally.
The rally that developed Just before |
noon, when the market was grinding
along the low edges of the slump, |
showed more characteristics of real
recovery. and went further than did
the morning recovery. II carried most
of the stocks above the closing prices
OF Yesterday. made good Roadway on
others, and indicated plainly that the
big army Of shorts was just as anxious
10 get under cover as il had been TO get
out stock early In the session. II car
Tied little Steel from 655s right up 70
yesterdays closing. 67A. by I O'Clock.
with Indications OF still higher levels
before the close. Steel preferred, which
touched I22Iz, recovered TO 1235s, all but
= of its loss. Practically everything
was wen to the fore. with y point net
losses in some few stocks as about the
limit Of the three hours battle.
Goulds Strong.
The Goulds were the strong stocks Of
the list. No one knows just why.
The report of the United States Steel
Corporation for the quarter ending with
mill -Naf