Evening star., 1909-02-28
GREAT MANY CAUGHT
Spectators Contribute Mil
lions to the Brokers.
CAUSES BEHIND THE SLUMP
Big Fellows in the Market Took
Usual Advantage.
WORK THE CUSTOMARY GAME
Tip Bureaus Go Out of Business.
Cut in Price of Steel and
Iron Products.
WORK THE CUSTOMARY GAME

Iron Products.
Special Dispatch to The Star.
NEW YORK. February @7-The shake
out was severe one and caught
great many thousand SPECTATORS for
many millions of dollars. The break
was timed to a nicely. 1t found
public lulled into A sense of
security by the apparent inability of the
bearish contingent in the stock market
to break through a level of prices that
had held very we'll for nearly two months.
The public. feeling secure that this situa-
tion would continue until the signal
should sound for another grand auvance.
went to sleep. Bing! Smash! The awak-
ening was sudden and most unpleasant.
The break in railroads averaged five TO
industrials a point or two more than the
railroads averaged. From the high
point Steel common sold off nearly fif-
teen points and Steel preferred about half
that. Among the railroads, Reading was
tho heaviest sufferer. it's loss on the down
turn being twenty points, with the shad-
ow of an adverse Supreme Court decision
hanging over ii at the bottom of the de-
cline. All the Hartman stocks suffered
heavily. Poor old Erie marked decline
from the boom price of sixty days ago of
a bout ten points.
There is still some confusion OF mind as
to what caused the slump and what
forces were operating behind the scenes
to cause the shake-out. AS a matter of
fact, several things contributed to the
stock market episode. Some people dig
nifty it by the name of panic. There was
nothing of panic about it. 1t has even
been compared with the panics of 1903
and 1907. There are few points of SINH
larity: almost none in fact. The down
turn in the market since the December
bulge Is in reality little more than very
harsh reaction. General conditions have
undergone no important change during
the last sixty days. excepting that the let
down in the iron and steel trade came to
such an acute phase that it could no
longer be concealed from the public and
had to come out.
Tariff Revision Speculation.
The curtailment in industrial activities
was and is due almost wholly to tariff
revision disquiet. and on that feature of
the situation every thinking man was
fully advised and cognizant. There was
simply halt in the progress toward COM
plete business recovers halt which every
body had looked for and was in meas
ure prepared for. The stock market was
exceptionally slow in graspng the sig
niticance of tariff revision.
A new generation of traders and brokers
had come on the scene since the last revi-
sion fourteen years ago. and they did not
fully comprehend the meaning of n slash
in import duties They are beginning to
dimly realize what it may mean. Most
of the younger generation looked upon
revision as a Nero political move without
very important business bearing. They
have had so much political agitation that
mere discussion of the tariff hardly at
tracted attention. Merchants. manufac-
turers. importers and exporters did not
view the situation from any such angle.
They appreciated at its true meaning the
halt in activity everywhere manifested.
Not so In Wall street. The enlightening
revelation came all at once and in the
nature of a surprise.
The big fellows in the stock market
took advantage OF the eliminating steps
of the big bull market last winter and
quietly slid out of their speculative hold
ings, realizing thereby untold millions.
They stepped aside and continued i'll the
role of spectators until the slump during
the last days of last week and the first
days of this week.
Reappear as Buyers.
At the lower range of quotations many
of them reappeared as buyers, although
support of their specalties in many in
stances, and every important brokerage
and commission house on the stock ex-
change is full of orders from rich clients
to buy on a scale down if there should
be any further recession
This kind Of buying is dead sure to
bring any kind of market slump to a
close and to lay a foundation deep and
strong for great upturn. This founda-
Nd
is as nearly CERT ain that anything market
wise can be that the accumulation of
stocks on a scale down will before a great
while show profits.
The big people and the great market
leaders have made no concealment of the
fact that they were Indifferent to the
course of the market after they let go of
their gambling lines. They have not been
particularly opposed to the public holding
prices at a very moderate reaction from
the high levels, but they have not been
surprised at the sharp break and are
rather pleased than otherwise at being
thus enabled to replace their holdings at
many points below the figure at which
they sold sixty or seventy days ago. OF
the future they have no doubt whatever
although they still look for an intermedi-
ate period Of slack times.
Stimulating Buying Orders
The cut In the price of steel and iron
products is unquestionably stimulating
buying orders at tremendous rate. The
larger manufacturing companies led by
United States Steel. are in the field look
ing for business In way that clearly
foreshadows an early resumption of activ-
ity very extensive scale. The break
in prices is bringing this about from two
to four months earlier than most people
had been looking for. Indeed it seems to
ind hot Si,n ht,ci 80,
preparing to adjust itself to reduced tariff
rates even before the meeting of Congress,
which is to act thereon.
1t is of common knowledge that every
body of consequence in most of the lead
ing branches of industry has been given
q close Id ~ IL