The sun., 1919-05-11
FINANCIAL NEWS
AND COMMENT
Sharp Break in Oils and Other
Specialties Causes General
Market Declines.
STANDARDS HOLD WELL
Bank Statement Shows Fall in
Surplus Reserve Of About
100000.
STANDARDS HOLD WELL

Response was undoubtedly made In
the stock market yesterday to the very
general voices Of conservatism raised
all last week against the violent spec
ulation which has been going on In the
higher priced oils and speciality shares.
At any rate the stock market under
went somewhat Of q change in form,
and for the flrst time since the current
movement began there were indications
of more than the usual amount of
profit taking in these departments.
The declines were not as severe az
might have been expected In view of
the extent OF the rise in the past week
and the tremendous volume of business
that has been turned over. but they were
enough to bring about q moro conserv-
alive attitude on the part Of speculative
Wall Street. as well as q Considerable
amount Of real outside selling. Whether
or not any definite trend 10 developing
toward the long expected reaction there
was no installing the character Of yes
terday's selling nor the fact that some
Of the higher priced Issues have lost
much of the favor which they enjoyed
earlier In the week.
The signal for the reaction yesterday
was sharp break on the curb in one
of the spectacular oil issues. This was
mors concerning the technical situation
in the oils, but none Of these seemed
to have much foundation except those
which referred to the more conservative
attitude taken on the part OF the banks
to protect themselves against the violent
speculation which has been carried or
In these Issues. In 30 far as the oils
we're concerned, It developed yesterday
that the banks have taken precisely the
same steps toward these issues as were
taken some time ago in the case OF the
Royal Dutch shares. In other words II
Is understood that in addition to call
given notice that hereafter they will
loan only 65 per cent Of the market
value Of the highly speculative issues
instead Of 70 per cent. as heretofore
This step Is not taken as an applica-
tion Of the brakes. but merely as a safe
guard against a repetition Of what hap
pened at the end of 1916, and Wall
Street in general had no complaint to
make over any step that would make
for conservatism In those issues. The
advance in the oils has been altogether
too rapid, and the market in general has
been altogether too one sided. It did
not appear as though the declines had
endangered the position Of the standard
securities, as they have not participated
to any great extent In the rise. but
there was no question as to the slack
ening OF speculative enthusiasm.
As a matter Of fact the standard
stocks. particularly the steeis, stood the
test in a remarkable manner. Steel COM
common itself closed the day with only
a fractional decline in face of the poor
showing made by the monthly tonnage
statement and considerable disappoint-
ment because Judge Gary's statemen:
did not give more details as to new steel
prices. The fact OF the matter Is that
It was only such Issues as have been
most favored in the recent movement in
which there were anything like severe
declines. These included for the most
part such issues as Royal Dutch, Sin
clair, Texas Company and others. An
other curious feature of the days trad
ing was the strength of the motor shares
in the face OF the weakness of the rest
of the list. Studebaker was in particu-
larly good demand and made a substan-
tial gain during the day, while all Other
motors also showed improvement at the
closing. The reason for this obviously
was a shifting of interest on the part
of the traders from the oils to the mo-
tors. In so far as the standard shares
we're concerned there was very little in
| terest in them. but indications of a GER
tain shifting OF commitments continued
as on the preceding day, particularly &c
issues which have not participated II
the recent advance.
The bank statement disclosed de
crease in surplus reserve of approx
mately 81 100000. a surprisingly small
| falling off in view Of the withdrawal o.
more than 100000. 900 in Government
deposits.