New-York tribune., 1920-03-25
Heavy Selling
Breaks Prices of
Industrial Shares
Sudden Rise i'm Call Money
Rates Causes Quick Shift
by Spectators and Low
er Quotations Follow

Wall Streets boiling stock market
ran into the heaviest selling since the
rise started, forcing extended declines
in all the leading speculative indus
trial shares that lately have been the
centre Of aggressive pool manipulation.
With the experience gained earlier in
the year, when abnormally high rates
for call money precipitated drastic
fall in prices still fresh in its memory,
the speculative element turned hur-
riedly to the selling side when the call
rate shot upward until it touched IA
per cent in the afternoon. Money was
the preponderant influence, little else
being talked about. The signs of in
creasing stringency were accepted as
indicating that the recent moderate
ease in money was perhaps more or
less temporary and did not reflect ac-
curately the fundamental position.
The sudden rise in call rates came
as something of surprise. This
| tended to accelerate the downward
movement in prices which began
around midday after an early display
OF strength and continued almost to
the. close. The trading element had
looked for tightening Of money on
Tuesday, when the government made
large Withdrawals from the banks. In
expectation of higher rrtes then the
professional traders had worked for
reaction, but their efforts were not
rewarded with much success, although
it was generally felt that a setback
would be a good thing for the market.
AS result of the resistance offered
by stocks to the selling on the day
before, buying proceeded confidently
Yesterday forenoon pushing numerous
higher levels. General Motors, for in
stance, was in such active demand as
to lift the price to 410, the highest
price on record. The later decline,
however, saw that stock carried down
to 366, where it showed net loss of
more than 35 points. Similar move
ments, although of course not so wide
in range, occurred in Baldwin Locomo-
| tive. Mexican Petroleum, Republic
Steel, Texas Oil and Bethlehem Steel.
The market rallied slightly at the close
but was still greatly unsettled;
Switching of professional traders to
the selling side of the market was i'm
mediately responsible for the lower
range of prices, but there was also
heavy proft-taking, as we'll as some
forced liquidation of long accounts by
holders frightened at the sudden re-
vival of money stringency.
Rumors played an important role in
the days market. One rumor, in par
tlCulaT, TO the erect tnar Dill, SpOn-
sored by Federal Reserve authorities,
is to be introduced into Congress which
will enlarge the powers of the Federal
Reserve Board in curtailing credit ex
tension supplied the professional bears
with selling point.
The money situation at the moment
is extremely interesting. Large bal
ances built up in the banks by corpora
tions in authorization of the tax pay
ments have been used temporarily in
the call money market. In the last day
or two the checks drawn against these
balances to meet the March Is tax pay
ments have begun to come through,
putting heavier burden upon the
banks, which has necessitated their
calling in part of the funds put out on
demand. Moreover, the government
since Monday has withdrawn from the
banks approximately $30,00O,000, such
Withdrawals yesterday amounting to
$8,000,000. Commercial demand for
bank credit continues heavy, but there
has been some contraction in the total
of such credits, bankers assert. The
slack caused by this contraction is be-
ing taken up by the seasonal demand
for crop planting purposes from the
agriculturals districts. The agricultural
demand is expected to become an in
creasingly important factor in the
money market from now on until June.