The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-10-29
CHECK IS CALLED
on SPECULATION

New York, Oct 1s.-Stock exchange
anfhorfties called representatives, OF
several speculative Arms before them
today and requested them TO reduce
their commitments with the banks 70
the level Of September 10, when the
hrst warning was issued against over
expansion.
Asrhis hit those firms that had been
chiefly responsible for thassodvanee OF
Mexican Petroleum and southern
Pacific. 1t was the movement In these
two stocks that got the market excited
about ten days ago. Selling oegon ~
these Issues after wild opening which
carried them to about previous high
records, soon extended throughout the
entire list. Even stocks that had not
benefited materially from thu -apecnlA.
tive movement were Affected. United
stated Steel lost three points. Sumatra.
Marty four, Southern Pacific. General
ciined sharply. The war stocks were
heavy Throughout the session.
Just before the market closed there
came what apparently was official
news Announcing the unconditional
surrenaor Of Austria. This surrender
carried with II Presidsnt Wilson'S ds-
manAs regarding the nav nations that
have been formed out Of former Aus
trian territory and recognised ~ the
allies. This news was rscsived with
cheers. There was an attempt to rally
the market but the cause for the mar
ket decline was not peace or valSes.
but the loan situation and therefore
attempts proved nnavailins. 10
exactly because peace will excite people
TO buy stocks that the bankers are
determined to keep the market under
strict control during the period OF
transition from war to peace.
The extraordinary increases OF sur
PLUS reserves in the bank statement OF
Saturday made the speculative element
feel like starting boom as soon as
the market opened today. The bank
ers suspected that this would be done
and word was passed out through a
few high grade houses TO check the
movement II possible. Several OF these
houses urged their customers to sell
at the very opening but the specuia-
tive element had such perfect control
Of the market. that In spite of heavy
selling prices advanced for about
twenty minutes. Realizing that the
situation could not be corrected with
mere selling. the governors adopted
the expedient Of calling members OF
the offending firms to account for their
extended loans. This had the desired
effect and liquidation soon became gen
eraL
The chief offenders were found to
be members OF the so-calied Waldorf
crowd They were not compelled to
sell because they were weak in the
slightest degree. The liquidation Is
no reflection on their financial stand
ing but rather a confirmation of their
ability to pick good stocks. Their
ofense consisted of being too success
fui at a time when success meant
disturbance Of general conditions.
Therefore. although Mexican Petro-
ieum, for instance, Is well worth all
4. ever sold for. 1t cannot be advanced
unless the money It's advance represents
can be obtained by the reduction in
the price OF some other stock. As no
ether stock seems to want to decline In
order to accommodate Mexican Petro-
leum In it's desire to rises there Is not
at the moment any other solution or
the problem than for Mexican Petro-
leum to go back and await a more
favorable market condition.
United States Steel after fractional
advance declined three points and this
causes inquiry regarding possible
reduction OF the dividend on which
action will be taken tomorrow. There
has been no official hint as TO what the
dividend will be but steel experts
think the rate will not be changed At
THIS time.