The Cook County news-herald. [volume] (Grand Marais, Cook County, Minn.) 1909-current, 1919-12-17
Reckless Investment Followed bv
Heavy Losses When Market
Goes to Pieces.
GOVERNMENT SECURITIES
REMAIN SAFE AND SOUND
Uncle Sans Bonds "Good as Gold"
While General Slump Wipes
Out Fortunes.

New ork.-Semi-panicky declines
in the stock market and subsequent
relapses from the partial recovery,
with heavy forced liquidation Of light
~ margined holdings of the popular
market favorites ON the New York
stock exchange have demonstrated
cleary the dangers of speculation.
For six months the stock market ad-
vanced, slowly at first and with the
usual "prof1t-taking reactions" and in
recent weeks going up by leaps and
bounds in some departments of the
market, notably oil, motor and other
industrial" shares. Then in a few
days there has been a decline wiping
out much of the advance of months -
in some stocks practically all of the
advance.
There was reason behind the ad-
vance, but speculative craze carried
it beyond reason. Eastern market
reports for months have carried men
ton Of buying by "the public" High
W ;es, war profits. the prosperity of
industry and agriculture have given
many the fever to speculate.
investments Prove Disappointing.
Financing of new and old corpora
tons by stock bond and note issues
called for hundreds of millions of dol
lars. Issues of preferred stock alone
since January l have totaled more
than $600,000,000 and common stock
a billion more. Foreign loans with
more in prospect to finance Europe's
buying added to the burden. The
immense buying powe" of the coun-
try shouldered the load, but specu-
lation in listed shares was getting
to show the strain. Three weeks
ago call money in New York rose
to 1870, the next week to 300 and last
week to 800, the highest point since
the panic Of 1907. Renewals touched
14R, the highest in years, and time
money hit 80. The advance was a
warning from the banks to go slow
pools" and "tipsters" began to draw
in their horns.
The decline was orderly until in
oUAANAOALAy oCCOuulS "cI0
liquidated. Then came a smash.
General Motors new common stock,
which had scared to 406H dropped
to $50, Mexican Petroleum from
255A to 1876, Texas company from
1888 to 286, Studebaker from 1885 to
1O8%, American Tobacco from 307A
to 240, Crucible Steel from 235
to 200 and so on down the list
Even U. S. Steel, the porverbial mar
ket barometer, declined from 112A
to 103.
The break extended throughout
the list, less marked of course in
lower priced stocks The bond mar
ket also suffered.
Periis Of Speculation Shown.
Since the eliminating slump there has
been recovery ranging from OF, 3 points
to around 20 to As points in stocks W itch
suffered most on the decline but down
swings followed the recoveres and the
marked atmosphere is not yet considered
cleared.
In nutshell a speculative craze set
the banking interests and the Fed raj
Reserve Board against overspeculation
and the crash came.
No better illustration of the permanent
and fixed value of government securities
can be found than in the present uns, t.
tied market. War Savings Stamps and
Ron Ssvngs and
bearing career unaffected by the storms
Of financial stress that overtake less
favorable securities.