Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-09-06
TRADERSRUN WILD
%. ON WALL Street
Ignore Usual Market lnflu-
ences-Labor and Finan-
ciaI Conditions.
Pertinent REMARKS
PERTINENT

From the N. Y. Evening Post Financial Bureau.
NEW YORK, September 6.-That
this weeks market for the speculative
industrial shares has approached fair
ly close to a stock exchange scandal
is probably the opinion of the major
ity Of sober observers.
1t will doubtless be alleged, and cor
rectly enough, that the real provok-
ing cause was the speculative public
itself; that gambling mania had got
control of these outsiders that the
same impulse which forces up the
cost of living by paying extraordinary
prices for the goods they buy was in
ducing them to risk their money with
entire recklessness in STOCKS of whose
intrinsic value they knew little and
cared less.
All this is a phenomenon with which
the stock exchange has at intervals
been familiar enough. If it does not
excuse the very brazen manipulation
Of the stocks by professional lin
siders," the alternate putting in and
withdrawal of artificial support.
whereby prices were made to rise and
almost between the bids of the in
fatuated outsiders, it explains at any
rate how the thing was possible. 1t
does not, explain why the speculation
should have reached its pinnacle of
extravaganza at just this moment.
Bound to Be Demoralizing.
To account for that it is necessary
to assume that the speculative con-
tingent had dismissed all concern
over the known financial influences.
Nothing is more absolutely proved
by all past experience than the fact
that absorption of capital and credit
in wild stock exchange speculation
during the early autumn season In a
year Of great activity in legitimate
trade and industry is bound to be de-
moralizing to the general business
situation and dangerous to the finan-
cial markets themselves.
The fact that it occurred this year
on top of the explicit warnings of the
federal reserve board. in the light OF
the perfectly we'll established princi-
pie that the credit fund. which is
| being used for the speculation, will
soon be needed elsewhere. and in face
| of a labor situation which was at
least pervaded with critical uncer-
| tainly, merely indicates that the people
| INDUCING in the adventures Of the
| week believed the stock exchange to
| be immune from all such influences.
The stock exchange has its own ira
ditions as to the outcome of mar
| ket based on that preconception.
What Will the Harvest Be.
Like all the successive movements
in this years rather extraordinary
market, this particular demonstration
| reflects the tendencies of the day.
But the real question suggested by it
is not SO much why these financial ex-
travagances should be thus violently
in evidence, but what kind of situa-
ton, outside as well as inside of the
stock exchange, is likely to follow
The course of the money market is
as yet inscrutable, the one certainly
being that. Il the spectators and their
banking supporters have been resort
ing. directly or indirectly, to the fed
eral reserve banks to finance their
ventures, then the federal reserve au-
thorities are absolutely bound to in
terfere with all the power which they
possess.
Should Recognize Probabilities.
1t is not at all necessary to assume
as d certainty. either that money mar
ket conditions will cause trouble later
or that the labor situation will be.
come formidably acute.
What is essential, however is to
recognize facts. possibilities, and the
bearing of both on the position of the
market if this weeks extravagances
were to continue.
The Wall street money market may
conceivably remain easy up to De-
cember 81; but not even the banks
can reckon surely on that result, when
governing conditions now differ wholly
fl ON those of the past four years.
The labor unions may arrive at a
satisfactory compromise with the EN-.
ployes and may abide by the decisions
reached. But the iaborer himself is
in a a &c,
patron of this weeks stock market
He also is insisting that former prec-
edent and visible conditions have no
bearing on the present situation, and
it is yet to be discovered exactly what
will be the outcome.