The San Francisco call., 1910-06-04
VIOLENT BREAK
TN STOCK LIST

stocks broke again today with a
violence almost uneXampled out
side of times of absolute panic
This was after a show of resist
ance to the forces of depression
during the early hours, when the
heaviest selling that appeared
seemed to be easily absorbed and
prices rebounded repeatedly from
the declines.
The action Of the market at that
time gave rise TO an impression
been absorbed and that conditions
were ripe for a rise. Uncovered
shorts were made nervous by this
action of the market and helped
on the tendency by their buying
to- cover.
The kind of explanations Of
fered for the recovery showed
plainly how attention remained
centered on the dominant topic of
the governments policy toward
railroad increase in freight rates.
There was circulated an express
sion of confidence from an anony-
nous legal authority that the in
junction against the western
trunk line advances would be
promptly dissolved. Another ru-
NOR was that President Taft con-
templated a statement in one of
his western speeches calculated
TO allay apprehension.
On the other hand there was
no lack of authority for ex-
pressions of the gloomiest views
by prominent railroad officials of
the disastrous consequences they
saw threatening from the suspen-
sion of the intended rate ad-
vances by the railroads.
President Brown of the New
York Central was quoted as say
ing that the credit of the rail-
roads has been almost totally
destroyed by this action Cthe rate
injunction) and it will be almost
impossible, in my opinion, for any
railroad to secure a loan here or
abroad" President Brown was
quoted further as saying that
s1O.00O,OOO of New York Central
bonds had been sold in France at
SS1k cents on the dollar.
Almost at the same time Presi-
dent Browns colleague. Albert
H. Harris, general counsel of the
New York Central, was quoted on
his arrival home from France as
expressing great satisfaction with
the success of the sale of 10000,
600 Cleveland, Cincinnati, Chicago
and St Louis bonds, which are to
be issued to the French people at
a discount of per cent or a
price of 81.
So far as could be learned, the
two references were to the same
transaction, and the discrepancy
in the two views went uneX-
planned.
The use made of the Brown in
terview was very effective in pre-
cipitating liquidation and in
breaking prices to the lowest
level of the year. There sprang
up series of rumors dealing
with the probable further steps
to be taken by the government
in the prosecution of the railroads
having to do with the alleged in
tention TO break up the various
traffic associations, to enjoin other
proposed rate increases and to
proceed for contempt against such
railroads as were enjoined under
old lawsuits against the trans
Missouri freight association and
the Joint traffic association.
Use was made also of the frag-
mentary extracts from President
Taft's speech at Ada. O., espe-
cially the passage, 1T is reason
able to suppose that at some time
within the next decade there will
be some reaction or some financial
stringency or perhaps a financial
panic" Also the passage, 'I think
the issue Of most Importance will
be the question Of the preserva-
ton of private property or its
destruction and the substitution
of a certain kind of cooperative
Joint enjoyment of everything,
which is the Ideal OF socialism.
These words of the chief execu-
tive were reported on the news
tickers almost without context
and in sensational suggestiveness
of extra spacing between the
lines.
The mood of the speculation
became fairly hysterical at times
and last prices were not far from
the lowest. Union Pacific was
down 5 q on the day, and Reading,
New York Central, Pacifics, United
States steel. Amalgamated copper
and the railroad equipment stocks
in the neighborhood of four
points.
Bonds were easy; total sales
(par value), s2,637,OO0.
United States bonds were un-
changed on call.