The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-02-02
MUCH SPECULATION
On Weeks MEANING
SEVERAL THEORIES ADVANCED TO
EXPLAIN MARKETS
ACTION.
LIKE JANUARY OF 1911
MARKET THEN FoREsHADowED
UNSETTLED AND TRYING YEAR.
DECLINE IN NEW YORK;
RISE IN LONDON.

he week witnessed . renewed and
rigorous advance VI prices on the
stock Exchange; but most of the
week was made up II reaction from
ast weeks rise In view Of the great
.espect entertained by the American
euhlie for the stock markets pro-
,hetic powers II Is not surprising
hat the downward turn Of prices last
SATURDAY, followed by n fresh show
II weakness Tuesday. and by a really
SHARP decline on THURSDAY should
nave occasioued inquiry MS "a wheth-
.r last weeks so-cailed bull mar
ketr might not have been mere
false start-not fairly indicative of
he real outside situation Such
hing has happened before this-~in
January. fa1f for instance, there
1aA 4 rise Of to points on the
Stock Exchange. vet the market
turned weak in February. thereby
toreshadowlng an unsettled and Try
ing year
Last weeks high prices on the
Stock Exchange embodied an ad-
ganee. as compared with tive or three
weeks before ranging from s to i
PORTS in the more active shares. The
subsequent reaction In these same
ttocks ranged from To 4 points,
yesterdays market once more raising
he general level. The downward
movement had. as usual many eNpla-
nations on the stock FxchanRe--~re-
ported financial difficulties Of isolated
corporations introduction of drastic
company regulation bills in CON
vress-but the eNpla nation given by
most experienced observers was that
last weeks upward movement had
been going ahead at too fast a pace
and that check was needed,
Reason For Reaction.
Whichever of these various theories
is to be taken as correct, the reac-
ZION was not of itself out Of line with
nrecedcnt Such downward move
ments. even In the face of continuing
favora BILE news. are usually witnessed
even after a rise much less notable
and welI-erounded than that of the
present January. To take what is
PERHAPS the most extreme instance on
the record OF American fnance--the
extraordinary 4'hull market" Of 1901
prices in January rose at first with
the greatest violence; but IN the mid
die of the month some Of the most
important stocks fell ] o points from
their highest rise Of or 10
points in February Was followed ny
decline of equal rapidity. the great
rise which Wall Street remembers be-
gan only in March.
There is reason for such reactions.
growing better instead Of worse. A
stock market. at such periods. does
not move deliberately. II rises with
cumulative violence. and In "A brief
time. when the A. is on, acquires so
wild a pace that. II IL were not check
s cd by precautionary realizing sales,
or by that short selling which
amateur reformers at Albany and
Washington denouuce. Il would topple
- afN-
haustion Of the available supply Of
capital Further even than this, no
financial situation Is ever so clear that
IL cannot be changed by unexpected
events.
Sometimes. as in that same 1901,
the public and the Wall Street specu-
iatora lose their head IN such degree
that all restraint, such as that of the
present week Ia useless. market
OF that sort is headed for trouble.
], was in the year referred TO. when
the three illion share day of wild
speculation for the rise came bare
~ week before the accident in
Northern Pacific stock tripped up the
entire stock Exchange, and when
Wall Street. even when It got upon its
feet again was promptly confronted
VIII Il cor .rti failure.
What Does the situation Mean?
While the New York stock market
~ the present week was taking the
downward course the London mar
which last week stood still.
quietly watching the new turn Of
events in Wall Street-sudden1y
broke out into a similar enthusiastic
rise This was the obvious and per
hans belated response TO the extra
ordinary pld vanishing of the
world wide money s1rineency The
New York Stock Exchange had in
point of fact reflected" the opening
Of the purse strings of European cap
ital two weeks before even London
did so. Only the very unusual re-
covery in British consols gave signs
Of what was going on.
Contemplating the months move
men' AT London. and at New York,
the average citizen is likely TO ask
have caused SO amazingly sudden and
with much perpiexity. What should
c9nple;e reversal Of form. within so
Iricf Ia time IN the worlds financial
situation7 II Is easy enough to an
ewer teat events DEVELOPED favorablv
u an unexpected decree. after the
END ~ pec"1nrer. ard that money
rl8-kets ard security markets re-
sponded TO It. But this is hardly
more than partial explanation.
Now And 1918.
There have been few financial
events tnfS month, either In Europe
or America. which were not them
selves 0ike the New York State bond
sale and the fall IN foreign bank
rates. in the nature Of the response
BY the money market itself Further.
more. there have been occasions in
the past when precisely such world
wide relaxation Of a money straif
occurred. without in the least in
aucing financial Cheerfulness or con.
fideree-this for the reason that II
reflected the ending Of forced liqui.
5ation on a PROSTATE market
In all proha bil!ty the real explana.
lion Of the remarkable financial
month which ends today would be
that the great financial communities
syery one Of which had been lndulg.
!, ing IN curious decisions about its owr
position ard the position of It's neigh.
oors, suddenly saw the truth The
rear Of receptions was over 1t was
now plain that the German indus.
trial crash. the Paris financial crisis
the continued paralysis Of financia
london, and the American panic--al
mad been obstinately predicted
throughout sI3--were as much tn.
nction Of disturbed imagination a.