Omaha daily bee., 1909-06-18
NEW YORK STOCKS AND BONDS
Sudden and Violent Break in Prices
Feature Of the Day.
MANY CAUSES ARE ASSIGNED
Report of Hughes Committee, APP
pointed to Investigate stock Spec
ulation, seems to Give GEN
eraI Satisfaction.

NEW YORK, June 1L-Speculation de-
fation. which took on the symptoms Of
collapse, was effected in the stock market
today. The suddenness and violence Of
the break in prices came as a surprise,
In spite Of the fearful expressions of dis
trust lately Of the high level OF prices and
OF the extent to which borrowed money
was being used to carry stocks on mar
gin.
The bear party in the speculation. which
undertook operations on the short side,
based on this situation, has met insup-
portable opposition so often in the shape
OF powerful support Of the market that
them had come TO be relied upon.
AS the decline proceeded, the flood OF
liquidation was very much increased, but
Il was not notably heavy at the outset.
The opening selling, in fact, was well
absorbed, and an effective rally achieved.
At that point stock began to come out
again. partly from those important inter
ests which bought yesterday to check
threatened Generalization then, and which
sought the earliest opportunity to resell
their takings. and partly from the organ
lied bears who had strengthened their
position by large covering operations. AS
prices rumble away, margins were wiped
out, and stop loss orders uncovered, and
soon after midday the market was demon
allied.
Probably no one factor Of the several
which were discussed was responsible Tor
the break, and all combined might have
been passed over in a speculative posi-
tion less vulnerable TO attack. Develop
ments In the copper trade in the last few
days have Impressed sentiment very un-
~favorably, owing to the suspicion engen-
dered that speculative forces have been
at work In the market for the metal to
sustain the speculation In stocks. A slump
In the copper metal market in London
today reinforced this suspicion. European
copper trade statistics show how a large
part OF recent and current American eX-
ports are going into warehouse stocks
abroad, rather than into consumption.
This showing had an effect on senti-
current active demand still continues, but
with the possibility, as in the copper trade,
OF an accumulation of stocks that may
prejudice later demand. The later stages
of the movement to secure admission of
United States Steel to the Paris bourse
have made a bad impression, in spite of
the protestations of bankers Of their con-
tldence In the ultimate success OF the plan.
Doubts have grown upon the subject, and
the tone of the stock market is greatly
prejudiced by those doubts, owing to the
heavy stress laid on the project in its
early stages as a warrant for indefinite
advancement of prices.
There was some comment on the coinci-
dence of this appearance OF the report OF
the Hughes committee on the exchanges
and the break I'm the stock market. Mem.
bers OF the Stock exchange, however, were
disposed quite generally to profess salts
faction with the contents OF the report
Practices which have been under criticism
such as short selling, restriction of distribu
ton OF quotations, and even manipulation
are distinctly defended or commended II
the report.
Some of the sellers Of stocks professet
apprehension that President Taft's specia
message regarding an income and corpora
ton earning tax might be a prelude to g
revival of the agitation against corpora
lions. The paragraph dealing with tn,
incidental advantages of the Increase
powers of induisition into affairs Of cor
porations growing out of the propose taD
on earnings seemed to be regarded as o.
sinister import to corporation management
The simple declaration Of a 2 per cen
Il dividend on Reading Yesterday COntr0Ste(
so wildly with the rumors which induceC
the recent advance in the stock to neaI
100 that a realization was awakened OF thu
large part played by pure speculation
helped by manipulation in the extension o
the prolonged advance I'm prices. Thii
realization, applied to the stock market a.
a whole, had much more to do with tht
days heavy liquidation than any fresl
incident in the news.
One such incident mentioned by trader
as a reason for the unloading of stock!
was the reported firing on a British shiI
by a Russian vessel. The extensive cover
ing by shorts an the process OF realizing
bear profits retrieved a substantial part o
the extreme declines, which ran to 3R ant
nearly 8 points for the stocks most acutel!
affected. The closing tone of the marke
was unsettled again.
Bonds were irregular Total sales, pa
value. s., 042,O 00. United States bonds wer,
unchanged on call.
Number of sales and leading quotations
an gfncEa Wara aQ follows.