New-York tribune., 1920-11-19
Passing of A. |. C..
Dividends Causes
SharpDropinStocks
Shipping Shares Main Tar
gets of Liquidation as In
dustrial Issues Fall to the
Lowest Level of the Year

Gently remarked that Finance is an
! old lady with shaken nerves." and the
fluctuations Of security prices yester-
day afternoon after the directors of
the American International Corpora
tion announced that the quarterly divi
/ dend on the common and preferred
stocks would be omitted tended to
validate the truth Of the financier's
metaphor.
The news Of the retrenchment of this
company reached the speculative pub
lie at l o'clock, after there had been
evidence of steadiness in the stock
market. What followed in the subse-
quent quotations of the stock of the
American international Corporation
and to shipping shares in which the
A. I. c. is heavily interested is what
one might expect in response to the
emergence of thunderbolt from the
sky. Complete surprises of this nature
damages on security values, yet the
truth is that many Wall Street folk for
days have been looking forward to yes
terday's A. I. c. meeting, anticipating
possible change in dividend policy.
However, the elimination of all div-
dends seemed to be more drastic than
spectators expected.
The net result of the new policy,
winch spokesmen ior the corporate .On
attribute to desire to conserve cash
with which to carry foreign customers
of the trading companies owned by the
corporation, was a loss for the day of
10 points in A. /. G. common, a loss of
SIX points by Marine preferred and 2
by Marine common, and 87b points by
United Fruit, in both Of which ship
ping companies the American Interna-
tional holds stock. United States Rub
Der, another company in which A. /. c.
| is believed to be heavily interested,
; closed unchanged, but has been ex-
tremely weak in recent weeks. The
selling of the shipping shares. those
purporting to be able to speak au-
| liquidation of its holdings by the Amer.
Ican International. Much of it, never
: theless. was induced by the fear that
the A. l. c., in need of cash, would
dump its shares on the market. The
unfavorable announcement, coming in
The midst Of q major drive on security
prices by traders determined to make
profits out of other peoples losses, un-
doubtcdly brought about heavy short
selling of the three issues which broke
heavily. and the impulses originating
from professional sources were vigor-
GUS enough to carry prices to the lev
els where multitudes Of stop-loss
orders came out to keep the downward
rush going at an accelerated pace.
The collapse of the prices of these
shares was enough to affect all stock
,x.l 49,. rt..
tumbed to a new low level for the
year, proving again that what some
brokers previously called the bottom
was merely another lower step on tb-
ladder of declining quotations. The
overriding of selling, however, on such
events, as the omission of a dividend,
which is not an amazing thing in days
OF diminished sales and falling COM
modify prices will carry the downward
movement too far, in all likelihood.
That the setting was perhaps more
important than the immediate cause of
the fresh break in the stock market
was indicated by sharp declines in quo
tations in the commodity markets,
where cotton and corn quotations fell
to the lowest levels of TIE year and
wheat prices fell sharply. The foreign
exchanges moved lower.
Against the wave Of bearshness
were set some very real OPINIONS OF
bankers regarding developments in the
money market, which should bring
about a freer supply Of credit. More
time money is becoming available and
bankers said that liquidation has pro-
ceeded to such an extent in the in
terror that surplus of funds is ac-
cumulating in out-of town banks, who
put out funds on time yesterday. The
renewal rate for call funds per cent
was the lowest since October %. 1t
closed at 6 per cent.