The sun., 1919-06-11
FINANCIAL NEWS
AND COMMENT
Continued Heavy Selling by
Wall Street Interests Tends
to Check Speculation.
BREAK HITS SPECIALTIEs
Tobaccos Show Strength and
Higher Priced Issues Rally
at Finish.

There were indications in yesterdays
stock market of a serious attempt to
check the rather dangerous spread Of
speculation which has been going on at
an increasing pace for the last three
months. There was further heavy SELL
ing from Wall Street sources, and added
10 this was fresh outburst of Western
liquidation as result of the unsettle-
ment over the possibility OF a complete
collapse OF the wire service to-day on
account OF the strike. But the real
warning came from Washington in the
form of a statement that the Federal
reserve Board had sent a circular to
banks asking for information concern-
ing speculation. to be used eventually as
basis for putting an end to such wild
movements as have been witnessed in
the security markets for the last few
Gays. This statement, coming at a time
when the market had recovered from the
relapse at the opening and was on a
fair way toward recovering most OF
what had been lost in the decline on the
preceding day. put an end to whatever
oullish aspirations traders may have had
for the time being at least
Essentially it was these DEVELOPMENTS
which brought out most of the selling
but in~teality the movement undoubtedly
was nothing more than uieht have been
expected as q result Of tho advancing
movement. which had reached a point
where the market had become too top
heavy to permit a further Improvement
without substantial reaction. There
was much In the statement Of the Fed
eral Reserve Board and also In the uriN
settlement over the wire situation which
went to increase the pressure all around,
but the decline would have occurred un-
ix.sN Nt-N% ~. ~
were forthcoming or not or whether It
was some other consideration such as
| an increase in money rates The only
! really bad feature about the trading
was that the selling was practically con-
tinuous and that the offerings were gen
orally heavy. No difficulty whatever
was experienced in depressing the mar
] ket once the movement had started. for
although there were many stocks which
| held well in spite Of the movement else
where the general list was so honey
combed with stop loss orders that Il was
| a comparatively easy matter to force
| wide declines in the highly speculative
| issues. It was another matter, however,
in the case Of the investment issues.
While they showed net losses at the
close they held well in face OF all selling
There were several other incidents in
the days news developments which in
fiuenced the prices to some extent such
as the passing of the Rock Island divi-
dends and the poor showing made In the
| monthly tonnage of the Steel Corpora
ton, but the main consideration of the
day was the Federal Reserve Bank
statement. The Steel statement, while
1t was disappointing. will be the last to
show any such decrease as yesterday s
for some time to come The Rock Island
incident was not altogether unexpected
! in quarters where consideration has been
! given in the case OF several other roads.
| But, together with tho other develop
ments. they produced considerable weak
| ness. The break was most pronounced
| of course in the specialties and other
! highly speculative issues which have ad-
vanced most recently. but not Gil OF the
! list was weak by any means. Nearly
all Of the tobacco issues showed strength
and held well, especially American
| Sumatra which closed the day with a
substantial improvement The rails
were somewhat weaker than the stand
ard industrials, but toward the closing
there was q general upturn all around
which carried most of the higher priced
issues nearly back to Mondays closing
! level
| The money market was considerably
| firmer. Call money loaned up to and
per cent, emphasizing the statement
given out by the Federal Reserve Board
about excessive speculation. But this
was merely a temporary situation. how
ever brought about by the proximity OF
the tax instalment at the end of the
week and also by the preparations
| which the banks are making for the
| July / dividend disbursements. While
money is expecting to continue firm. II
is anticipated that yesterdays high
rates will undoubtedly bring consider
able funds to this centre from out OF
town sources. There was very little
change in the foreign exchange market
| Sterling, francs and lire were trtfe
weaker, as were some Of the neutrals'
but otherwise most OF the rates were
about unchanged from the preceding
days closing figures. The cotton mar
ket reacted after a further sharp ad-
vance at the outset yesterday morning.