Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-01-24
drop in Stock Prices
Create New Demand.
Reduction Of Interest Rates
Also Has Good Effect.
MiscaIcuIation Of Money Market
Helped Stocks Downward.

New York. Jan. 23-As a culmina-
ticn OF the yielding course OF prices OF
stocks discernible since the first Of
the year, there was a disorderly break
on Wednesday Of last week. The iname-
date agsraVating cause was the crash
in Hocl:inc Coal, due to the rupture
Of the market pool in I:lat stock, the
calling IF loans 10 the members and
forced liquidation, which Immediately
demonstrated the fictitious character
Of the quotations for the stock. The
failure of three Stock Exchange firms
and the actual losses involved were
supplemented in their influence by the
rumors of wider troubles which al
ways arise at such times and by the
Giscreditable methods of market OPP
erations thus shown to have employ
ed. Other stocks under suspicion of
manipulation did not escape the dam
age done to The credit of the specula-
tive position by this object lesson.
Th"re was an inclination to draw On
favorable conclusions from retrospect
of much of last years operations in
the stock market. A close analysis Of
consequences to the price level of the
htti-It "llCil has dlItduy otcuIIcu
suggested a rate of progress in the
delatiOn of fictitious values already
achieved that left a basis for the later
recovery and the restoration of con-
fdcnce. Expectation of an extra div
idend on United States Steel this week
proved a powerful speculative factor
in one recovery.
The check to the decline, which was
encountered when it had advanced in
to the violent stage did not prevent
the recognition of some substantial
causes underlying the reactions. be-
yCnd the mere correction of Specula-
tive excess. The action of the money
market since the first of the year is
sufficient testimony to the miscalcula-
ton of resources there which entered
into the decline in stocks The purging
of the credit situation which went on
last week even after ease had develop
ed there, wos testimony to the neces-
sity for correction and played an i'm
nortant part in the mid-weeks tumble
of prices. The volume of the reIlux
OF currency from their circulation in
TO bank reserves itself suggests a
pause in business activity beyond the
seasonal normal.
Some slight increase of surplus of
inle freight cars was reported and
there was feeling that sufficient al
lo%2rce was made in the speculation
Tor the influence of this years program
of governmental activity for regula-
ton of corporations.
The December foreign trade report
completed the years extra ordinary
exhibit of the decline in the excess of
merchandise exports which lies back
of the command OF our money markets
which foreign centers have com
nanded.
The substantial marking down of |
prices Of stocks which occurred and |
the reduction of interest rates on |
money which accompanied it induced |
some investment demand attracted bv |
the Increased return on dividend nav
ing stocks compared with interest
rates on loans. Easing of foreign
money markets and the progress OF
the English elections brought improve
mont in the investment situation
abroad as we'll