Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-10-20
CHECK PRICE DROPS
Wall Street Financiers Take
Steps to Prevent Relapse.
WEALTHY MEN BACK BANKS
Centralize Investments for Collateral
for Enormous Loans.
HEAVY SELLING BY SHORTS
Public Is Not Letting Go Securities
Taken On During the Previous
Advance.
HEAVY SELLING BY SHORT
BY w. G. NICHOLAS.

any relapse of Importance in prices.
There is an equally plain disposition on
the part of the people of affairs to check
any tendency to put through speculative
bull campaigns. although many pools and
syndicates are impatient to break away
and start the machinery. The money
market is not yet in shape for gigan-
tic speculative boom in stocks such as
traders would like to see. and for that
reason the banking interests. which are
really carrying the load for the very
wealthy syndicates and individual. opera
tors. are discouraging too much activity
at the moment. AT the same time there
is an equally earnest desire on the part
of these very same interests to prevent
important reactions. Every time prices
break or display tendency that way
broad support is given values and prices
recover to the high levels that We're es-
tablished some weeks ago. or SO nearly
at that level that tie margin of shrink
age appears very small when measured
by actual quotations.
Groups of wealthy men are back OF
all of the big trust companies and banks.
and as their centralized investments are
UP as collateral for enormous aggregate
loans it is clearly to the interest of the
financial institutions to maintain strong
situation. 1t is patent that conditions
are not just right for further large ad-
vanceS in the general stock market, but
unless appearances and signs are decep-
tive the great bull movement will start
from level around the current range.
Those who have been looking for a SEN
SatiOnal break, as preliminary to the
predicted stock market boom, begin to
feel that they are scheduled for disap-
pointment in that respect. 1t is a fact
not generally appreciated that prices are
very much higher than they were a year
ago. The boom has been in measure
already discounted. Compared with the
prices of a year ago. Amalgamated Cop
Pacific 40 Reading 30. United States
Steel 16, Union Pacific 10, Northern Pa
cific 8, Great Northern IL. New York Cen
trail 10. Baltimore and Ohio 3. American
Can. common and preferred. 81 and IS.
respectively; and the general average
list from to 10 points. The reaction
from the high levels reached about a
month ago is only ) to points. Around
these reacted levels prices are being held
stubbornly.
Spectators Take Profits.
Spectators have taken profits in a
large aggregate amount and there has
been continuous. and heavy short selling,
but on all the soft spots the stuff is
taken in quantity. The outside public is
not buying in a Wholesale way at the
present writing, but it is clearly not let
ting go securities taken on during the
previous advances. The basic sentiment
/ is one of unmistakable and decided
| strength, and nothing seems able ia
swerve it or to diminish the underlying
! confidence. That feeling is national and
underlies the entire business situation.
of which the stock market is only a
, feature.
, Speculative activity centered more
| largely on the steel stocks than most
people realized. That was the first de-
partment of industry to feel the turn
for the better. and insiders have made a
great killing by taking hold early. There
has been an advance since a year ago in
the price of a half dozen of the principal
steel companies aggregation at least
2OOOOO,OOO United States Steel leads off
with a gain of $50 O09,OOO and the half
fully much more. This list includes
Bethlehem Steel. which is up % points
Lackawanna, % points; Republic COM
mon. 20 points; Republic preferred, ~
points: Colorado Fuel and Iron and
Schloss-Sheffield, ~ points each. 1t will
be seen, therefore. that the market has
not been idle or SOW to appreciate the
significance of the business revival which
began to make itself felt about six
months ago. 1t does not follow. however,
that the prices will not go higher. The
shrewdest spectators, investors and pro-
motors believe that the upward swing Is
not half way accomplished as yet. and
that the general advance Will be at least
I doubled before top is reached. By the
middle OF winter the pressure of money
for crop moving and incidental purposes
will have greatly relaxed and capital
which is now employed by the hundreds
of millions of dollars in that field will be
largely available for Wall street uses.
The genuinely big people are not anxious
to have the movement start in earnest
until money conditions will justify faith
In, hai To 40 N IN r. n
ing. The one thing they appear anxious
to avert is any serious reaction from the
current levels, as stated in the opening
paragraph of this dispatch.
The street is giving Mr. Prick credit
for being a leading factor in the stock
market. He is a leading figure in Atchi-
son. steel and Pennsylvania, and Is
! heavily interested also n the anthracite
securities he has been to some extent
j superseded as leader by Messrs. d. G.
Reid, Judge William II. Moore and the
! powerful group Of capitalists who are
crowd" There is literally no limit ia
/ the resources of this company of capital
j lists, and for the most part they work in
! concert. although there are many In
| dividual interests in connection with the
combination. The copper stocks are also
backed by vast and well generated capt.
tai. represented by several Standard Oh
multimil'ionaires, the Guggenheims and
their fabulously rich following, w. r..
8 Corey. Ryan of Amalgamated and the
Rothschilds OF Europe. The copper mar
ket, including both stocks and actual
mining is more closely controlled than
ever before. These people fought
, through years OF hard times in the cop
per industry. and their ties OF self In
| terests BROUGHT them closer together in
every important particular. They bought
! the copper stocks away down low and II
| is believed they have not yet rea lied to
any great extent, being supremacy con-
| fdent that the entire industry is only
| in the early stages of stupendous
| boom. They predict par for Amalgamat-
| ed as a starter.
wildcats" Prove Dangerous.
A dangerous feature of the stock market
| IS the promotion of a number of In
| dustrials that look very much like wild
cats" Some of them may eventually
pan out. but in a majority of cases they
are grotesquely overcapitalized. and in
dications are that the public will be
! stuck by buying the shares at fancy
| figures. not justified by the merits of the
| enterprises. The public is taking too
kindly to these rainbow fiOtations, and
| already hundreds of millions Of dollars
of foolish money has gone into them.
4 The prophets are saying that eventually
| there will be an awful scandal. The
| stock exchange is charged with giving
\ undue encouragement to this line of en-
II al l.,