The sun., 1919-10-26
FINANCIAL NEWS
AND COMMENT
Stocks Have Worst Break of
Year and General List Is
Semi-Demoralized.
MARKET WEAK AT CLOSE
Bank Statement Shows Loss in
Surplus Reserve Of About
$14,50O,O00.
MARKET WEAK AT CLOSE

BY far the worst break which Wall
Street has experienced this year oc-
CURED in yesterdays short session Of
the stock market. The whole general
list went into a stage of semi-demor-
alization as O result Of adverse over
night developments in connection with
the labor situation and prices declined
under heavy liquidation with little inter-
ruption to a close which was weak and
extremely unsettled. There were a few
special issues VIII oh exhibited fair de-
gree of stability in face Of the selling,
but the great majority of recent spec
aative favorites went into stage OF
partial collapse and at the closing the
selling movement did not seem to have
exhausted itself. because the selling yes
terday represented merely Wall Street
holdings and not holdings of the South
and West which have been very heavy
purchasers of stocks recently for rise.
The trading, for the second time this
year, was over a million shares for
Saturday session and prices closed right
at the low of the day.
The immediate cause of the selling OF
course was the strike news. but this was
not the only reason. The thing that
brought about the worst Of the move
ment was the fact that the market re-
fused to rally after It had experienced
its initial decline. Traders who sold
stocks at the outset In expectation OF
just such setback as occurred reasoned
that they might have a hard time In
covering after the first hour. for the rea-
son that It was anticipated that the
Public would then step into the market
again and purchase stocks on the theory
| that prices mad gone low enough. But
no such thing occurred. Instead of buy
| ing stocks the publ c followed the leader
ship of traders and dumped their hold
| ings into the market on tremendous
scale, as was evidenced from the fact
that more than a million shares of stocks
changed hands In the two hours Of trad
| ing and also from the fact that the
tape was more than twenty minutes be-
hind the market at the closing. Another
reason for the selling was that the pub
| lilo refused to stand still any longer and
let enormous paper profits slip away.
| These profits have accumulated all yeai
and yesterdays selling represented the
first real important realizing there has
been.
In spite of what developed afterward,
the market had a very remarkable open
ing. There were a good many stocks OF
from the preceding days Anal. but never
| theless the great majority of standard
/ issues were fairly firm. In view Of this
opening the commission house fraternity
bought stocks again on the theory that
the market acted precisely as It did on
| Thursday, when a similar opening was
turned into a rout for the shorts. Mean
4 while, however, traders were very heavy
| sellers Of stocks and when the market
refused to rally the public at once saw
| 1t had made a mistake. Then came the
rush to sell. Steel common broke below
| 106 and all recent favorites among the
motor shares collapsed. The tobacco
| shares. which were the only feature of
strength on the preceding day. also fol-
lowed the rest OF the list in the decline
although they held a great deal firmer
than did some stocks The equipments.
perienced their full shares of the days
losses There were few exceptions In the
list In the declining movement and most
Of them were unimportant.
The bank statement disclosed a loss
in surplus reserve OF approximately
$14,500, 900. which was accounted for by
increase Of $2.7oo.ooo in deposits and
$14.000.o00 loss In cash reserves with
the Federal Reserve Bank of New York.
The decline In reserve. however, had
nothing TO 90 with the stock market
because actually the bank statement
position as related TO the market was
favorable Notwithstanding the reserve
Increase. The important thing about the
bank statement was a decrease in loans
amounting 10 $40.000.000 which proved
that loans last week actually decreased
rather than Increased as many commits
sion houses have pointed out recently
There was nothing special in the foreign
exchange market Sterling held about
steady. while francs were slightly lower
but, on the whole. most rates were not
very far from the preceding days Anal