Los Angeles herald., 1910-07-01
CRASH IN PRICES
4 BATTLES MARKET
Financial Experts Delve Deep to
Find Explanation of Violent
Decline
R. R. RATES THOUGHT FACTOR
Capital Tied Up in Land Projects
When Resources Most
Needed
Associated press1

NEW YORK, June 3O.-So violent a
crash in prices of stocks as that which
eliminated today is not to be ex-
planned, but the surface causes which
have been advanced from day to day,
such as the impaired spring wheat
prospect, the reduction of railroad rates
on the transcontinental roads ordered
by the interstate commerce commission
and similar explanations Deeper
causes are indicated and were sought
by inquirers in the financial district
today. From the high points Of last
Thursday, Union Pacific sold at de-
cline of 20 points and there were vary
ing losses throughout the whole list OF
active stocks.
The June advance followed the agree
ment reached between President Taft
and the railroad presidents to submit
the proposed rate advances to the
operation of the new railroad law and
the movement by the representatives of
the great private banks to secure as
sets from great shipping interests to
the proposed freight rate edvances.
The violent eclipse which has followed
brings forward the operation Of more
general causes, which, 1t was supposed,
had progressed so far toward correction
as TO pave the way for a general re-
covery.
HAS TELLING ECT
The stock market of today and yes
terday showed how drastic readJust-
ment remained to be made. Probable
dividend reductions by some of the
railroads were discussed as events fore
shadowed from the reaction of the
stock market. The outcome follows the
conviction of the unstable conditions
which were the outgrowth of the
premature recovery from the crisis OF
three years. Starting with powerful
artificial stimulant for the stock market
last year, there followed an imitation
of values in all directions, an era OF
extravaganza in living and In business
Industrial methods.
Capital resources were engaged In
land speculation and irrigation projects
at a time when business was most in
need Of resources.
SIMPLE REACTION
[ There has been conviction that ex-
tensive commitments in speculative
holdings of stocks which were carried
through the elimination of last year s
rise in October have been held in faith
that each successive downturn In the
market was a simple reaction destined
TO be followed by a resumption OF the
march of progress. It was current be-
tief that market pools involved In such
holdings were being liquidated yester-
bay and today IL response to the i'm
perative admonition of authorities in
khe banking and financial world.
4 The quieter tone in the later dealings
Kas proof of the relief offered.
Private estimates of the cotton crop
were held to foreshadov a good govern
fnent crop report of conditions tomor-
row. More attentive perusal of yester-
days order by the interstate commerce
tommission modified the impression of
their inclusive scope over practically
all railroad rates.
! Money on call went no higher than
81 per cent, in spite of the disturbance
pf loans connected with the days i'm
pairment of margins.
Bonds were weak. Total sales, par
value So, $4,000
United States bonds were unchanged
on call.