The Washington herald., 1918-10-29
BRISK TRADE
IN WAR STOCKS
Exchange Cheers on Hear
ing Of Austria S Uncon-
ditional Surrender.
by BROADAN WALL.

New YORK, Oct. S.-Stock excnhnBe
authorities called representatives OF
several speculative firms before them
today and requested them to reduce
their commitments with the banks TO
the level of September 16 when the
first warning was issued against over
expansion. This hit those firms that
had been chiefly responsible for the
advance OF Mexican Petroleum and
Southern Pacific. 1t was the move
ment in these two stocks that got the
market excited about ten days ago.
Selling Began in these issues after a
wild opening which carried them
about to previous high records. soon
extended throughout the entire list.
Even stocks that had not benefited
materially from the speculative move
ment were affected. United States
Steel lost three points, Sumatra near
ly four. Southern Pacific. General
Motors, Studebaker and all the oils
declined sharply. The war stocks
were heavy throughout the session.
Just before the market closed there
came what apparently was official
news announcing the unconditional
surrender of Austria This surrender
carried with it President Wilson's
demands regarding the new nations
that have been formed out of former
Austrian territory and recognized by
the allies. This news was received
with cheers. There was an attempt to
rally the market, but the cause for
the market decline was not peace or
values. but the loan situation, and
therefore attempts proved unavailtng
1t is exactly because peace will ex-
cite 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.
Bankers Pass Word.
The extraordinary increases of sur
plus reserves in the bank statement
OF Saturday made the speculative ele-
ment feel like starting a boom as
soon as the market opened today
The bankers suspected that this would
be done, and word was passed out
through a few high-gra houses to
check the movement IL possible. Sew
eral Of these houses urged their GUS
toners to sell at the very opening.
but the speculative element had such
perfect control of the market that
in spite of heavy selling prices ad-
vanced 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 general
The chief offenders were found TO
be members of the so-called Waldorf
crowd. They were not compelled to
sell because they were weak in the
slightest degree. The liquidation is
no reflection on their financial
standing. but rather a confrma ton
of their ability to pick good stocks.
Their offense consisted of being too
successful at a time when success
meant a disturbance of general con-
ditions.
Therefore. although Mexican Pc
trOleum. for instance. is we'll worth
all II ever sold for, it cannot be ad-
vanced unless the money its advance
represents can be obtained by the
reduction in the price of some other
stock. AS no other stock seems to
want to decline in order to accom-
modate Mexican Petroleum in it's
desire to rise, there is not at the
moment any other solution of the
problem than for Mexican Petro-
leum to go back and await a more
favorable market condition.
United States Steel. after a frac-
tional advance, declined three points
and this caused inquiry regarding a
possible reduction of the dividend
on which action will be taken today
There has been no official hint as to
what the dividend will be. but steel
experts think the rate will not bu
changed at this time. The corpora
tion has plenty of money if it cares
to use ii for dividend purposes.