The Washington herald., 1920-02-05
DECIDED DROP
IN SECURITIES
Continued Heavy Selling
Causes Collapse in
L Many Issues.
CALL RATE rs PER CENT
European Situation Also
Large Factor in Great
ing Pessimism.

New York. Feb. 4.-WalI Street
experienced another demoralizing
session today in which prices of
stocks broke sharply to new low
levels for this movement and closed
today with losses ranging from 2
to 10 points in the most active
issues. A call money rate of TWEEN
ty-five per cent and a sharp break
in foreign exchange to new bot
toms and general expectation that
our exports would be curtailed by
reason of the diminished credits of
the European countries were re-
sponsibIe for the general selling
movement.
At the opening prices were gen.
orally lower owing to a continua-
ton of the selling movement in
progress at the close yesterday and
forced liquidation by persons who
were unable to meet margin calls.
n sharp break in the price of Sterl-
ing amounting to fourteen and one
half cents to the pound accelerated
the downward movement and di-
rected attention to the prospect of
q much smaller foreign trade. Most
commission houses were advising
against the purchase of stocks ow-
ing to the outlook for continued
tightneSs in call money Ware
houses reported the appearance of
investors. but their purchases were
relatively small so that the chief
purchasers on the downward move
ment were shorts who were cash
ing in their profits.
Shortly after l o'clock the low
est prices for the day were re-
corded when quotations showed
losses ranging from 3 to about
II points. the maximum decline
being in General Motors. At
that time Crucible Steel and
Mexican Petroleum showed de-
preciations of points each, while
Tobacco Products and, United
Retail Stores were points each
under yesterdays final figures.
Shortly before o'clock the SELL
ing eased up and a general COW
ering movement ensued which. to-
gether with speculations for
rally. caused a sharp rebound
ranging from l to points, the
greatest recovery being witnessed
in General Motors. This, how
ever, proved to be but squirt
of strength and the general list
resumed it's downward movement
in the last hour of the session.
The close was active and near
the lowest prices for the day in
most issues. The Street was filled
with pessimists and with con-
ttinued high rates for call money
most people seemed inclined to
Hook for a further decline.
Z Tuesdays reports that the Federal
Reserve Bank of New York would
raise its discount rates failed to MA
sterialize. On every severe drop in
prices, however. spectators as well
as investors are given to much talk
about the Federal Reserve Board.
Z The high rate for call money fig
ured as one Of the reasons why per-
sons refused to purchase stocks and
why the bears took occasion to put
out additional short lines. At the
Opening loans were made at II per
cent. Renewals were also made at
that figure. but in the afternoon Of
ferings became light and brokers
were forced to bid the rate up to 5
per cent Heavy Withdrawals by the
United States government are sched-
.nled for tomorrow. These withdraw
ais. together with those made in the
first two days of the week. amounted
10 approximately $3.50. 100000.