River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1919-12-11
Reckless Investment Followed by
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 -Semi-panicky declines
in the stock market and subsequent
relapses from the partial recovery,
with heavy forced liquidation of light
ly 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 sprofit-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
wages, 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 / have totaled more
than $600,O00,0OO and common stock
billion more. Foreign loans with
more in prospect to finance Europe's
buying added to the burden. The
immense buying power Of the coun-
try shouldered the load, but specu-
lation in listed shares was getting
out of bounds. Money rates began
to show the strain. Three weeks
ago call money in New York rose
to 1870, the next week to 2O% and last
week to 300, the highest point since
the panic of 1907. Renewals touched
1870, the highest in years, and time
money hit so. The advance was
warning from the banks to go slow.
Pools" and "tipsters" began to draw
in their horns
The decline was orderly until in
sufficiently margined accounts were
liquidated. Then came a smash.
General Motors new common stock,
which had scared to 4067a dropped
to ESQ, Mexican Petroleum from
255A to 1856, Texas company from
338 to 286, Studebaker from 1435a to
108A, American Tobacco from 307A
to $40, Crucible Steel from 235
to 200 and so on down the list.
Even U. S. Steel, the porverbial mar
ket barometer, declined from 1925
to 103
The break extended throughout
the list, less marked Of course in
lower priced stocks. The bond mar
ket also suffered.
PerIs Of Speculation Shown.
Since the eliminating slump there has
been recovery ranging from 2 or 8 points
to around 20 to 45 points in stocks which
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 Federal
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 unset
tied market War Savings Stamps and
Liberty BONDS continue their interest
of financial stress that overtake less
favorable securities.