New-York tribune., 1919-11-13
Crash i'm Stocks
Ends Long Orgy
OF Speculation
Refusal by Federal Reserve
Board of Credit for Spec
ulative Uses Causes q
Torrent of Liquidation

Inc end OF the most frenzied era Of
speculation in Wall Street history was
written yesterday when a veritable
torrent or liouidation, precipitated bv
the money crisis. swept prices of the
more volatile industrial stocks down
ward in q crash such as has not been
witnessed since the peace panic of
1916.
For forty-one minutes after the gong
had sounded the close of trading on
the floor Of the New York Stock Ex-
change the stock ticker continued to
"hlr out its sensational story of paper
fortunes, built up through months of
unprecedented booming, and wiped out
In few hours Of demoral ization. For
while the standard stocks were sufi-
gently stable to prevent anything like
real panic, there was no doubt that
the whole market was demoralized
when trading ceased Veteran specula-
tors could not remember a time when
Tie ticker was so far behind the mar
ket as 1t was at the close yesterday.
Transactions totaled 1851, 400 shares.
the largest turnover since Decembe I
Il, 1915. when 3,095.S50 shares changed
hands. The largest days trading on
record was on April 30, 1901, when
3,202 100 shares were dealt in.
Stocks Under Continuous Pressure
All day long throngs Of anxious spec
ulators packed the brokerage houses.
A few who had anticipated the in
evltable result of strained credit sit
uation and had sold short were jubilant.
But mostly they were "bulls" and
watched the collapse of their fortunes
lleve the story that was being spelled
out on the ticker. Many acted in time
to avert serious loss. but others
doggcdly fought the decline until ex-
kausted margins forced them under.
All were under the strain of uncer-
tanty, for the confusion was so great
that many did not know where they
stood until hours after the market had
closed. Frequently the ticker wou.l be
printing price several points from
that involved in transaction then
taking place on the floor of the ex-
change.
From the opening of the market un-
til trading ceased stocks were under
chiefly by belated realization e the
fact that the Federal Reserve authori-
ties have turned thumbs down on the
use of credit for speculation, to which
a 30 per cent rate for call loans added
emphasis.
Financiers to Prevent Real Panic
Conferences Of bankers were held
at which the critical situation was dis
oil J..
there was Il general refusal TO talk for
publication. it was learned that the
days liquidation had been sufficiently
drastic to satisfy the authorities and
that no further action to curtail stock
market funds is probable.
Leading financiers intimated the
market would not be allowed to "get
out of hand" This was taken to mean
that sufficient support would be lent
to prevent the development of a real
panic.
more than all orderly decline such as
situation began to assume an acute
aspect about a week ago. The state
mcnt of Governor Harding Of the Fed
eral Reserve Board that the situation
was we'll in hand and that further ac-
tion by the authorities was not con-
templated at this time was first in
terpreted by traders as indicating that
the shortage of funds was not likely to
become more serious, and so there was
no great haste to sell. But when call
money opened and renewed at IA per
cent, and the rate again started to soar,
the rush to get out from under began.
Hurried calls for additional margins
went out. and unable or unwilling to
meet them, traders threw their hold
ings on the market.
Heavy Liquidation Begins
The stocks which have been mani
puated upward in sensational fashion
during recent weeks were the first 20
give way. General Motors began to
fall several points between sales.
Mexican Petroleum. American Tobacco
Studebaker and others of the same
class followed swiftly, and their slump
prccipita.ed heavy liquidation almost
throughout The list
Az each fresh decline more and more
stocks were forced out as stop loss
orders were caught and brokerage
houses dumped the more thinly mar
gined accounts The rout became com
plete when the banks, calling loans
and limiting new ones, carried the
rate for call money UP to 80 per cent,
/ Continued or page sixteen