The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-10-24
WALL STREET NEWS
Retrospect Shows Present
Conditions Favorable.
SEMI.PANIC SEEN LAST July
ssshaIe-out'' of FRrquhar-Pearson
Syndicate eliminating Point of
Market Decline - Healthy Com
mereiaI, Industrial, and Financial
Condition I'm the East Especially.

New York. Oct. pa fair explanation
for the violent rise in stock market prices
which started a fortnight ago Is IN all
probability the statement that about 80
per cent OF the movement was due 10 an
increase in general confidence in values
and the remaining so per cent 10 manipu-
lation for the advance by a considerable
number or shrewd. bold and powerful
spectators. What has been witnessed in
this regard is only another striking at
testation of a truth OF which nearly
everybody is convinced as an academic
proposition. but which few people find
themselves able TO act upon in financial
way at a given time.
This is the fact that when any stock OF
commodity market gets itself in a position
where it is thoroughly liquidated and
doubtless also heavily oversold. or when
conditions on a similar scale but OF ex-
actly reverse sort are in evidence a
strong counter movement in the market
is almost inevitably excited. even II the
manner Of applying the stimulus may be
only mere speculative buying or selling
Looking back over stock exchange his
tory for the last fourteen months, il
is easy now TO see into what a strong
technical position prices OF securities
gradually intrenched themselves in the
period and how the "shake-out' OF the
speculative holdings OF the unfortunate
Farquhar-Pearson syndicate in the mid
die OF July was the eliminating point
Of the market decline, leaving quotations
for securities far below their intrinsic
value even with the worst freely ad-
mltted as 10 the state of existing bust
ness affairs.
Condition of Dizziness.
After the usual brisk recovery from
what was indeed a semi-panic on July
20 the market lapsed into d condition OF
extreme dullness. when it was commonly
said that prices were very cheap. but
that it could not be discovered what force
It was that was going 10 put them up.
The force applied vas. as II often is.
buying by a few large market operators.
most Of them unattached-that is. having
no particular relations with the great
banking houses o. the larger financial
interests proper. They merely took ad-
was in such shape that IT would rise
easily on little determined buying.
Aiding their efforts was a more cheer
ful feeling in the general business and
financial world because certainty had
taken the place OF conjecture regarding
the outcome OF the country's crops; be-
cause fears of money stringency during
the crop moving season and toward the
end OF the year had diminished. and be-
cause political contingencies wore a more
favorable face. The security market
slowly crept upward for several weeks
previous 10 Monday a week ago, during
which period. no doubt. holdings OF
stocks were quietly accumulated. Then
prices began 10 rise by leaps and bounds.
and at the end OF last week the advance
in the market had wiped out one-haIf Of
the entire previous decline from the high
prices touched in August a wear ago.
Now II must be said that to most peo-
pie whose habitual way of looking al
things may be characterized as being
reasonably conservative II seems as II
the rise that has taken place has for the
time being gone about as far as IL safe
ly should. There has never been any
concealment al the time OF the truth.
even on the part Of those who have been
loudest in their expressions Of optimism
during the last month, that while there
has been a good deal of healthy CONNER
cial, Industrial, and financial liquidation
IN the eastern part Of the country
credit in the West and South is still In
state OF over extension. if not Of strain.
The banks in these regions are, 10 use
a common phrase in the banking world
pretty we'll loaned up" and taking the
country over bank loans are heavily in
excess Of deposits.
Business is good in the West and
South. Of course. and business prospects
are enhanced by the agricultural results
Of the year But he trouble with the
quarters OF the country named is that
speculative business there has not lost
its grip as II should upon credit supplies.
and that the days as they pass are con-
tinually demonstrating that the banks
will be hard put 10 il to provide the
means for further expansion
Not Enough Money.
It is deserving Of serious thought too
that much the same state Of affairs IS
visible in other countries of the world
besides our own notably in Germany.
There the president Of the Reichsbank in
his annual report. published recently. en-
phasized in the gravest way the difncultv
in which his institution found itself IN
the effort TO provide money FOR the com
mercial uses OF his countrymen owing
10 the high range Of commodity prices
at which these undertakings were now
carried on.
The stock markets of the world. pretty
nearly all OF them. have undergone a
course OF liquidation. Some important
commodities have fallen. but the aver
age range of these valuations has not
a
all these circumstances Wall street has
not doomed itself sufficiently until the
outlook for the International money sit
uati0n becomes a little more definite, and
when in particular more evidence is pre-
scented that the savings of the world are
enlargtng. is something that should re-
ceive serious consideration. At any rate.
attention cannot avoid resting upon the
fact that the Improvement in the bond