Norwich bulletin. [volume] (Norwich, Conn.) 1895-2011, 1909-06-18
FINANCIAL AND COMMERCIAL.
SUDDEN AND VIOLENT BREAK
Takes Spectators by Surprise-Nar
ket DemoraIized After Midday.


New York, June 1.-THE suLdern.ss
and violence of the break III ptices IN
the stock market today came as a sur
prise in spite of the frequent express
sions 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 speculation, which under
took operations on the short side based
on this situations has met insupera-
BILE opposition so often in the shape of
bad support of the market that the
ability to hold prices or advance them
had come 20 be relied upon. The with
drawal of that support undoubtedly
was very important element in the
weakness which swept over the market
today. OF course. as the decline pro-
ceeded the flood of liquidation was
very much increased, but it was nota-
bly, 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 interests
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 bad strength
ened their position by large covering
| operations. AS prices crumbled away,
margins were wiped out and stop loss
orders uncovered and soon after mid
| day the market was demoralized. Prob
ably no factor of the several which
were discussed vas responsible for the
/ break, and all combined might have
| been passed over in a speculative posi-
/ ton less vulnerable to attack. Develop
ments in the copper trade in the last
/ few days have impressed sentiment
very unfavorably, owing to the sus
picion engendered that speculative
/ forces had been at work in the market
| for the metal to sustain the specula-
ton in stocks. A slump in the copper
metal market in London today rein
| forced this suspicion European cop
per trade statistics show how a large
| part of recent and current American
exports are going into warehouse
| stocks abroad rather than into con-
sumption This showing had an eff
| feet on sentiment regarding the steel
| trade, where the currenE active de-
mand still continues, but with the
| possibility, as in the, copper trade, of
an accumulation of stocks that NAV
| project later demand. The latter stages
of the movement to secure admission
| of United States Steel to the Paris
| bourse have made a bad impression in
| of their confidence in the ultimate sue
| cess of the plan. Doubts have grown
| up on the subject and the tone of the
stock market is greatly prejudiced by
| these doubts, owing to the heavy stress
| laid on the project in its early stages
as a warrant for indefinite advance
ment of price as. There was some COM
ment on the coincidence of the appear
| ance of the report of the Hughes COM
| mittee on the market 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. Prac-
| tees which have been under criticism
such as short selling, restriction of
| distribution of quotations and even
| manipulation, are distinctly defended
or commended II the report. Some of
| the sellers of stocks protested appre-
hensiOn that President Taft's special
message regarding an income and cor
poration earning tax might be pre-
ludo ID revival of agitation against
corporations. The Pittsburg dealing
I with the Incidental advantages of the
increased powers of inquisition into
iairs of corporations, growing out of
TIE proposed tax on earnings, seemed
to be regarded as of sinister import to
corporation management. The simple
declaration of a two per cent. semi
annual dividend on Reading yesterday
contras ted so wildly with the rumors
which induced the recent advance in
| the stock to near 100 that realiza-
tion was awakened of the large part
played by pure speculation helped by
manipulation in the extension of the
prolonged advance in prices. This
realiza ton applied to the stock mar
ket as a whole had much more to do
with the days heavy liquidation than
any fresh incident in the news. One
incident mentioned bye the traders as
a reason for the unloading of stocks
was the reported firing on British
ship by a Russian government vessel.
The extensive covering by shorts in the
process of realizing bear profits re-
trieved a substantial part of the ex
treme declines, which ran to 1-2 and
nearly points for the stocks most
aeutely affected. The closing tone of
tie market was unsettled again. Bonds
were irregular. Total Sales par value,