Evening star., 1920-02-04
SELLING WAVE ON
EXCHANGE CRASH
BY STUART p. WEST.


Special Correspondent. of The Sur
WALL STREET, New York. Febru-
ary decentralization continued in
aN-the financial markets this morn
ing. Sterling exchange crashed down
another 13 cents in the pound, making
decline of % cents in two days
Continental rates similarly went to
pieces. The investment bond list was
under heavy liquidation again with
new low records for liberties and one
or two of the foreign government
loans.
The stock market had another vio-
lent break, quite a part of II occurring
directly at the opening, when orders
accumulated overnight were bunch
ed for execution all at once. II was
houses doing business with the inte-
rior of the country that were the big
sellers this morning. as they had been
at the close last night.
Enormous Volume of Selling.
This selling reached an enormous
volume. and while stocks were well
taken on scale down on orders which
looked to be coming from local bank
ing sources. this buying was not de-
signed for and did not have the effect OF
providing positive support.
1t was simply the feeling in banking
quarters that this liquidation had TO
tdhe It's course. tnal II NdS DouHu "
come. and that eventually it would re-
store soundness to the credit posi-
tion. But there was no disposition to
check this liquidation until IL had been
completed. All classes of stocks SUI
fered Unfortunately. The high
priced industrials being more exposed
naturally had the biggest fall But
there was equal pressure against the
rails. steels and coppers. in which the
previous rise had been relatively
moderate.
Street Very Bearish.
Wherever one went this morning it
was hard to fine any expression at
all comforting about the market The
only approach to anything bullish
was the advice vouchsafed in one or
two of the brokerage letters that it
might do TO buy stocks for turn on
any further weakness. This state
ment was perfectly safe, inasmuch as
the degree of weakness preceding
the turn was not defined.
Some other houses continued openly
bearish advising the sale of stocks.
while others contented themselves
with telling their customers to keep
out of the market This. too, was safe
advice if the customers were fortunate
enough to be on the outside looking
IN In one quarter, which has been
very right. especially on the eX-
changes. predicting that sterling would
go to 50 when il was quoted at $3.50.
there was some short covering. The
stock attitude here was that it was
time to commence taking in short con-
tracts. although no opinion was eX-
pressed as to whether the bottom had
been reached.
Buying and Selling.
Up TO yesterday morning the large
speculative interests of the interior
had not been seriously disturbed by
the decline in the market. They were
hrrll ltGI av-sf
they saw abou. them in local business
conditions. This was particularly true
of sentiment at the automobile CEN
ters and in the steel districts. Busi-
ness men in these localities saw pro-
duction stretched to its utmost and
yet falling far behind demand
Under these circumstances they
were holding tight to their motor
and steel shares.
1t was not until yesterday after
noon that they began to realize the
seriousness of the decline. Then the
selling orders started to pour in over
the wires. II was the west that was
the big seller at the close last night,
and IL was the west which was dump
ing its stocks on the market this
morning regardless of prices
Somebody was buying the stocks
thus thrown over.
There We're of course short sellers
of previous days who were gathering
In their harvest of profits, but it was
not all short covering by any means
that made up the buying side. There
was plenty of evidence of the pres
ence of that type of scale orders
which usually appears on days of de-
moralization. and it probably would
not be bad guess to trace the in
spiration of these orders to those
same high banking quarters which
have been so bearish for the last few
weeks while they have been raking
in their fat returns from the loan
market.
Another Severe Setback.
Another drop in exchange and the
announcement that the government
would call deposits to meet payments
gave the market another severe set
back in the afternoon.
Losses ranged from to II points,
General Motors. Crucible Steel. high
priced oils and Canadian Pacific fea-
turing the reaction.