The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1919-06-13
Business and Finances
Nv w. S. Cousins, Ed
di tor American Benker.
New York, June 7, 1919.

..;u. position which had been built up
80 result of steady advances in in
Svs,r;al shares since the first OF jan
usrv should at last have its reaction
saj this came on Tuesday in one OF
she widest and most violent sessions
~. ~. has been seen in the New York
..ock market in many day. The
otor stocks, steel, oil and leather
;ss~es a number of railroad shares
ISL, nmd misc ellaneous specialties wilted
and an outpourin of offerings |
which expanded as vast volume OF
stop-loss orders were uncovered ana
oaper profits built up during weeks
and months of activity suddenly van
ished
the violent break in stocks is simply
the unsteady situation that has been
hu;lt I'D as a result of the advance In
the highly speculative issues, two or
three other important factors have
contributed to this result. Among
them may be noted the warning
AGAINST excessive speculation con
,s;ned in the Federal Reserve Boards
Iune bulletin and the advance in call
rates, presumably engineered by the
New York bankers as a further curb
on speculation.
The shrinkage in prices occArred in
those issues, where the trading has in
recent weeks been quite overdone and
where purchases have been made on
narrow margins under conditions
which would not permit spectators
70 paw the higher rates called for in
the market They have also to con-
tend with a new schedule of increased
hroker's commissions, reducing the
probability of profits on fractional ad-
vances. There has been no reversal
Of form in the speculative situation,
but the market will be quite better
off for the introduction OF a little OF
sober second judgment.
There is no doubt but that the value
of American securities is far above
the market prices of one year ago, but
it is questionable If many Of them are
entitled to the advances they have
scored since the turn OF the year
There is in almost every section OF the
country an orgy of speculation which
reaches from the highest grade in
vestment securities, to the penny oil
stocks, with the literature of which
the mails are flooded and business
men are delayed and in the flotatioI
Of which many are becoming rich
while thousands of poor people are
losing their slender accumulations.
If the experience of former time:
and former wars count for anything
this country is quite liable to witness
further expansion of speculation
Immediately following the Civil Wa
there were several years of contin
uous expansion, during which re
markable economic changes occurred
These were, in a large measure, du
to the readjustments resulting iron
the war and the necessity OF recon
structing the Industrial and eco
nomic system of the country. One
the important features OF these year,
was seen in the extensive transports
ton changes and extensions, but
was also true that the industris
equipment of the country was revo
lutionized. Manufacturing had bee
given a new direction and financis
changes of far-reaching importanc
took place. IL took a longer tim
after the close of the Civil War
get started than is likely to be tru
at the present time, but when tn
start was made expansion and spec
ulation proceeded at rapid pac
There is now abundant indication
an era Of development of simil;
character. The expansion period aft
the Civil War lasted about SIEVE
years, but the European war h;
greatly exceeded the Civil War in Il
scope OF its effects. The expansic
period may be correspondingly longe
Emphasis on inflated values m;
easily be seen by comparison wi
pre-war prices, which show that :
the industrials have risen since l9l
while the railroad shares have d
elined. The 1915 prices show 4
effect of the war trade upon the i
dustrials. The following eompariso
are significant.
Low Juns2, High, His
lndustrials 1919 1919 1918 1911
Am. c ............ - 50 AZ oS
Am e q n IA tfN S6 OK