The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-11
FINANCIAL NEWS
AND THE SITUATION
Stock Prices Break Sharply on
Labor Conditions--Social
Unrest q Factor.
CALL MONEY rs EASIER
Antitrust Legislation Causes
MISUNDERSTANDING
After War Influences.
CALL MONEY rs EASIER
nv WILLIAM JusTUs BoIps.

prices which followed last week the
highly sensational Developments in the
dispute with railroad labor about the
government ownership proposal and the
unrest caused by tho high cost OF living
agitation emphasized the vulnerable po-
sition Of q stock market which had been
advanced in defiance of repeated warm
ings Of the Federal Reserve Board con-
corning the danger OF financing a furi-
Gus speculation with money needed for
harvesting requirements and commercial
demands. The demonstration was In
many respects the most sensational
since the early days of the war and I'M
mense sales of securities were made
Hr the account Of strong investment in
terests The consequence IL that the
stock market has been liquidated thor
oughly, prices now ruling to 20 points
below the years high level. In that
way the great bull market Of 1919 has
been brought to a standstill with de-
cilnes as striking as were the violent adj
vances during the forty-five day series
Of million share markets. when virtually
the whole country became heavily inter-
ested in the Wall Street demonstration.
UnsettIinE Factors.
No stock market could have withstood
such a series Of unsettling developments
as those represented by the TRADE Of the
labor leaders at Washington. the begin
ming Of suits against tho packers, the
nationwide movement to curtai high liv-
ing costs and the proposals by Admin
istration officials and others as to short
cut methods for ending profiteering and
evils growing out of steady advances in
] food prices. One has to go back to the
corresponding week Of 1914 to find
seven day period in which so many
highly disturbing news DEVELOPMENTS
| calculated to depress security values
were reported.
The demonstration was ono that
| never can be forgotten by those inter-
ested in the development OF New York
as a great international market Tor Sc
curities of all nations. Within few
| weeks upward of S25o,000,000 of for
| eign Government securities have been
marketed here and negotiations are I'M
| der way for bringing out large additional
issues in the effort to finance Europe's
reconstruction needs. There Is. also the
formation OF heavily capitalized foreign
trading companies to provide for and
the carrying out in one form or another
of the programme under discussion by
| the central committee Of bankers touch
| ing the larger financing that will be
required to provide adequately for ex-
pansion Of American trade abroad.
Money Market Has Big Task Ahead
Whatever programme be formulated
| for financing foreign engagements II is
| evident that this money market Will
have plenty to do within the next few
months without charging its volume Of
| stock exchange loans. Had not sharp
reaction in security prices occurred
| when It did the Federal Reserve Board
might have found 1t necessary to put
the money pool once more in control of
the brokerage loan account. In the con-
fusion, incident to the after effects of
such a violent break in prices, 1t must
not be overlooked that nothing has hap
pened to impair the integrity Of Ameri-
can investments nor to jeopardize the
SAFETY OF underlying conditions
Tho TRADE Of union executives about
the exploits of stock jobbing officials
and the discoveries concerning the wa
tered stock of the various systems which
they have made are not calculated TO
cause much Of a commotion in we'll in
formed quarters. The public has been
long familiar with the Chicago and AL
ton episode and the disasters Detailing
the Rock Island, the New Haven and
other properties. Those incidents re.
late to an era in American finance LONG
ago closed and. notwithstanding what
has been said to the contrary. nothing
has happened to suggest that the prac
tees complained of have been or are t
be resumed. It would be practically
impossible under prevailing conditions
for any financial group to launch
stock jobbing campaign even II 1t wer,
inclined to disregard lessons of past re
! ceiverships. The situation has changed
absolutely since the furious speculation
in the Hartman shares thirteen year
ago.