Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-05
MARKET IS SOFT;
OILS LEAD BREAKS
Bears Busy Throughout the
Industrial LiSt-loSSeS
Severe.
BY STUART p. WEST.

| BY STUART r. WEST.
! NEW YORK, August 5.-Today's
market during the greater part of the
time continued in d very unsettled
| condition. There were violent breaks
in number of industrial stocks and
lutte severe weakness in others.
| on thee ther hand, the action of part
| of the list was suggestive of prices
yielding to bearish pressure, rather
| than to real liquidation and rebound
| ing whenever this pressure was lifted
| 1t was quite evident that under COW
| er of the weakness in certain quar-
| ing quietly done in other directions
and ii was also clear that many who
! had sold out the standard railroad
| shares some time ago and had waited
| to buy back until after the rate de-
| cision were taking advantage of the
! disturbed conditions in the industrial
! market to do their repurchasing.
| The Polish crisis was still a factor
/ in all the markets, but it was not the
major consideration. The continued
! strength of the commodity markets
! was attributed to the foreign news
| but. on the other hand. the foreign
| exchanges were comparatively steady
| They Were off some from last nights
! close. but We're still a good distance
away from yesterdays bottom.
I -hpItoNtIs the point seemed again
| worth making mention that had there
| been any acute fear of another war
| entalling a vast expenditure of money
and consequent increase in the pres
| ent war debt. this would have GER
| tainly shown in the market for pres
ent government issues. As IL was the
| United Kingdom bonds maturing in
| 1929 and those of later date were
both higher on the day and the for
| mer at one time were up more than A
point as compared with yesterday
| morning.
Reflects Credit Situation.
The weakness in stocks was prin-
clpaliy reflection of the present
| credit situation.
There is always a certain stage in
a great decline like that of the last
eight months where the position OF
certain pools and Individual operators
becomes undermined and they find
Gifflculty in renewing their credit ar
| engagements at the banks. What oc-
CURED this morning was undoubtedly
! the calling of loans the collateral for
which had been depreciating very
&c nsiderably. knowing what was
gong on, supporting orders were
withdrawn and the buying limits re-
duced. so that this liquidation should
the weak to strong hands.
The better established industrials
Were not nearly as hard hit as the
newer issues. 1t is always the bank
ing custom at such times to discrimi-
nate against the more recent f1ota-
tions on the ground that they enjoy
a less stable market and are more de-
pendent upon artificial support.
1t was the oil group and especially
the lower priced oils which have been
introduced to trading within the last
year and which have had very
checkered career that suffered the
worst. The market had been going
along fairly well during the first hour
or so with quite show of steadiness
until Middle States oil took a
spectacular tumble from just above
! 20 to under 10.
This extraordinary break. which was
attributed to the calling of loans
from the pool in the stock, precipi-
| tated very naturally a rush to sell
the other w-priced oils for both ac-
counts.
Bears Press Advantages.
One after another Invincible. Trans
contir entail Sinclair. Phillips Petro-
leum and the rest broke down. Then
the bear party. carried away with
success. extended it's attack to other
stocks. then the so-called Ryan
shares-the motive in this case being
sufficiently plain from the develop
mants of the morning-then it was the
shipping issues. But as these groups
gave way one after the other the de-
cline became general. 1t was the
worst decline of the season in many
individual issues and the general
market simply cracked under the
strain.
Middle States Oil.
The sensational break in Middle
States Oil was commonly attributed
to the sudden withdrawal of credit
from the pool which has been operat-
ing in the stock for some time past.
The president of the company was
quoted as saying that it had never
been in better condition and was
free from obligations of every kind.
This fitted in with the view that the
ditfons and not because of anything
wrong with the company's affairs
themselves. For several days Middle
States has been traded in just above
| 20 in very conspicuous manner.
Large blocks have been thrown
! about with very little resulting change
| in price. Evidently this was an ef-
fort to hold the stock up against the
general market, and it resulted in
| failure.
! What apparently happened this
| morning was the calling of loans
from the big operators in the stock
The consequence was the throwing
of the pool holdings upon a market
which was absolutely devoid of sup
port. Breaking from 20. the decline
! was fairly sensational. The price
broke from 10 to 1512 between sales
and it was only half hour before
Middle States was down 10 points
| it's selling price of yesterday cut ir
| two.
The Bond Market.
The bond market was curiously
little affected by the upset in stocks
1.-THE upward tendency in the railway
Tissues was checked for the most part
but there were no recessions Of any
consequence.
The St. Louis and San Francisco
prior lien AS distinguished them
selves by making a new high at So
a gain of two points from where they
were selling before the rate decision
The adjustment IS held at theil
high of 81 and the income 6s were
also strong at 1917. The same steadi.
ness was shown in most of the other
bonds of reorganized roads like the
Missouri Pacific general As and thu
st. Louis Southwestern convertible is
sues were trifie lower, but they die
not go down in proportion to theiI
Irrespective stocks.
| Foreign government bonds did no.
| reflect at all any uneasiness thai
light have been felt in banking cir.
cles over the Russian-Polish situation
1.-THE United Kingdoms of 1929 and 1913,
! were higher on the day. The Belgian
l7hs got down to 97A, but subsequent
ly rallied.
! The Paris 6 per cents were prac.
tically unchanged. All this went tt
| indicate that there could be no grea
apprehension OF new war involving