New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-22
Wilson's Note and Lam
sings War Talk In
duce Selling Panic
STEEL SECURITIES
CHIEF SUFFERERS
Western Investors Dump
Holdings; Total Sales,
3,176,000 Shares

countrywide speculation in stocks on
the basis Of war profits, which had
been taking place almost uninterrupt-
edly since the note from Germany TO
the Allies proposing to discuss peace,
eliminated yesterday in panic on the
Stock Exchange.
Sales were the heaviest for a single
day since the Northern Pacific corner OF
May Q, 1901, the transactions totalling
$4,000 shares. The acute cause was
the Presidents note TO all the belliger-
ents moving the idea Of peace. To
this was added q war scare from the
phrase in Mr. Lansing's explanation
that we are drawing nearer the verge
Of war ourselves" Most of the selling
was without any relation whatever TO
value; it represented the immediate
necessities of individuals suddenly
called upon by their brokers either TO
increase their margins or pay for their
stocks outright and taking them away.
individuals Usually Caught.
The individual is generally unable TO
meet this unexpected demand, and the
only alternative is for the broker to
sell him out for what his stocks will
bring. The procedure is self-acceler-
ating. The selling out Of the people
whose margins are 10 per cent causes
prices to decline until those whose
margins are 90 per cent begin TO be
reached. then those whose margins are
even 80 or 40 per cent.
There were many stocks at length
on which no amount OF margin would
suffice. because the broker could not
borrow money on them at any bank.
Being suddenly unavailable as collat-
eral, the client who had carried them
on margin was obliged either to pay
for them in full or allow them to be
sold These same stocks only a few
weeks before were recommended vide
ly for purchase on margin.
Until yesterday the liquidation had
been really disastrous only IN war
stocks. meaning the shares OF corpora
tions that had derived immense prohts
from the manufacture and sale OF war
merchandise, but when people are IN
a panic good stocks are sacrificed along
with poor ones. Very often good ones
have to be sold TO make up the losses
suffered by the holders Of the poor
ones. So yesterday railroad securities.
which formerly had been notable for
strength, gave way with the others.
West Is Heavy Seller
Some of the heaviest selling came
from the West. where there had been
unbounded enthusiasm for what is
called the bull side of the stock mar
ket" Wall Street houses having wires
70 inland cities poured stocks upon the
market continually from 10 to 3 o'clock
Always in such cases the wonder is
where the buyers come from.
Wall Street itself began yesterday
10 buy stocks on very large scale.
taking them off the hands OF the West
crn public that had bought them at
much higher prices.
The lower prices went the heavier
WAS this Wall Street buying. Il came
banks and from financial institutions.
Many stocks were cheap. Necessitous
selling produces bargains. Such Is the
theatrical sequel of a wild and head
long speculation fomented by Wall
Street in "war brides" vulgarly so
called.
There were some disagreeable ru-
mors in circulation. They arise spon-
taneously in such situation and are
mainly untrue. This collapse of the
stock market cannot nationally be
ascribed to the work Of any bear pool.
II was inevitable from the nature OF
the preceding speculation.
Steel Leads Plunging Market
When the market in United States
Steel common gave evidence OF col
lanse that was ,he signal for the heav-
lest outpouring OF stocks IN hfteen
wars The break in the markets spec
ulatiye favorite was most spectacular.
The onening was the most sensational
4, years. when $4,000 shares Of Steel
common were dumped on the market
for sale and brought lOihz 70 100 =.
compared with a closing on wednesday
Never before in the history of the
New York Stock Exchange had single
block Of such size appeared on the /
tame NJ one time. From the opening
right up 10 the closing there was little
respite in the pressure OF liquidation.
AS Steel common went steadily !o"er
:, cs,ried the whole market along. In I
~ af,ernoon. when the climax Of the 1
safl;nr movement vas resehed-s few 4
o';nmtss before the close-Steel touched
IooL where it showed a net loss Of |
7gs ~ points from the day before. 1t
closed a, lOl, off points This COM !