New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-05
Stocks Break
Under Pressure
Of Liquidation
Wave of Selling Carries
Prices Down to New
Low Levels

Liquidation broke over the STOCK
market yesterday with such violence
as TO send prices for some high grade
securities down TO the lowest quota
tions recorded in years. The break
had its beginning in selling by inves-
tors, but professional traders assisted
the movement with heavy short sales.
The turnover amounted TO more than
million shares. Persistent rumors Of
government action looking to the TAX
ing over Of railroads, of closing the
stock Exchange and others equally
alarming to stock market traders were
in circulation. The evacuation Of Riga
was also regarded as an unfavorable
factor.
The decline was the more sur
prising because the session began with
every indication of betterment. War
shares and affiliated stocks gained !
to points in the course of the morn
ing. Their improvement was attrib-
uted to the defeat Of radical amend
ments TO the excess profits tax measure
before the Senate. All this advantage
was suddenly swept away toward noon,
when rails began to wavcr.
While the action of the market, as
usual in recent weeks, was dominated
by United States Steel, which sold
from 1l1at of to 1919, closing at
1O4ai, or d net loss for the day of 4%s
points, the extreme weakness which
developed in the standard railroad
shares was a feature of the trading
that caused good deal of uneasiness.
New York Central Weak
New York Central attracted partcu-
lar attention, selling down to 1914,
which is The lowest quotation of the
stock in many years. 1t closed at 1878,
a net decline Of AZ. Union Pacific
broke TO 1854, and closed at l2'i4, a
decline of AS points. The selling OF
the latter was even heavier than in
New York Central Atchison, Balti-
more, St. Paul and Southern Paciii"
and many OF the other rails were
thrown on the market in good sized
blocks. declining anywhere from to
points. -.
At no time was support more than
feeble, the bears experiencing little
trouble in forcing prices lower after
every slight rally. There was gen
eral unloading of speculative holdings
and many accounts were closed when
traders found themselves unable to
respond to calls for additional margin.
Commission houses were active IN
the selling. but to what extent their
participation constituted short stock or
actual liquidation remains question.
Brokers with Saratoga and other sum
mer resort connections were among the
largest sellers. ritz.
Tight money market conditions,
caused largely by the heavy Withdraw
ais of government deposits from wall
Street banking institutions, contributed
toward the stock market unsettlement.
The surplus reserves Of the Clearing
House banks were reduced last week 70
Sl2,300,000, loss of S56,4OO,OOO from
the preceding week, the smallest excess
over legal reserve requirements since
the Inauguration of the Federal Re
serve system. Many banks consequent
~ had to call outstanding demand
loans. As q result Of the demand for
fresh accommodations from brokers
whose banks had called outstanding
loans Of This character the call rate
held all day long ct s per cent. This
compared with a high Of 6i2 per cent
on FRIDAY and ruling rate Of Az per
cent.
Money Stringency
Rankcrs assert that until the banks
are able to rehabilitate their reserves
"a normal figures it is expected that
money rates will be firmly maintained.
One banker said yesterday: While no
one can predict with any degree or
certainty what course money rates Will
take in the next few weeks, 1t is GER
tain that until the funds withdrawn
bv the government are discussed IN
pavmcnt Of supplies and find their way
back TO the regular channels OF bust
ness no marked relief can be ex-
pected." :,
Ordinarily per cent call money
would attract funds from banks in
The interior with large SURPRISES. At
nresent, however, the stringency seems
TO be prevalent in all parts OF the
country.
A prominent international banker at
tributed the liquidation to "a growing
realization on the part OF the pubic
Of what the governments taxation ana
price fixing programme will mean TO