Evening star., 1920-02-16
STOCKS SLUMP ON
RENEWED SELLING
~ STUART p. WEST.
al Correspondent Of The Sfsr

BY STUART r. WEST.
Special Correspondent Of The Star
WALL STREET. y. Y. February Is.
For tOday's downturn on the stock
exchange there was one broad practi-
cal reason and two contributing sunL
Elementary reasons After the 6rst
swift rebound from such a panickv
decline as that which eliminated last
Friday ii is the perennial custom for
tne market to have a secondary drop
of much more moderate character
than the first. carrying prices on
within some approximation OF their
previous low points.
veterans students of Wall street
conditions would have said that this
was what happened today and that il
would have come about regardless, of
any outside news But, as ALWAYS
happens. outside prctexts are at hand
Tor any movement of the sort ana
this morning the financial commu-
nry was confronted by the somewhat
sensa tional announcement of the
President on the Adriafic question
and by the Disappointing figures is
sued after the close of business Satur- :
day on the bank operations of last
week.
borrowings Increase.
l, bad been supposed that the
heavy liquidation in stocks plus the
pressure brought to bear upon credits
IN other directions would have sufficed
70 strengthen materially the Federal
Bank position. The returns showed
that certainly Wall street had done
its part: New York loans were down
$5S,000,000 on the week, completing
loan contraction directly traceable
to the stock exchange decline. of
about $500, 100000 in the past month
But the fact that other borrowings
were not reduced. but. on the contrary,
were increased. that the federal re-
serve loan account had again risen
above the billion-dc,lar mark and
| that in consequence the reserve ratio
was down to SS.9, or nearly its lowest,
| indicated very clearly that the recent
advance in discount rates. radical as ii
was. had not availed to discourage
fresh borrowing in commercial circles
listing loans.
In a word, the increased cost of
money has simply been absorbed along
with other increased costs. and is be-
ing passed along to the consumer in
the shape of higher prices.
Baldwin Locomotive.
The interview published in a morn
ing paper with President Vauclain of
the Baldwin Locomotive was a blow
at the bankers and politicians who
have been talking about an industrial
crisis and thereby doing their utmost
nounces himself as bull not only on
America but on France from which
he has just returned He character
ICES as rot the talk of depression. He
minimizes the importance of the ex-
change situation In its effect upon
the general balance of our foreign
trade. and he says that Baldwin Lo-
connective. although IL had a very good
year in 1919, will have a still better
one in 1920. Mr.. yaucIsin supports
the testimony of the iron trade pc
riodicals of last week.
The European demand is not vital
thing for the big lines of American
trade. He himself would not take
S2o. 900 600 of European orders for To-
comotives IL they were to be paid for
in cash. The essential point is that
our foreign commerce. having broad
ened into all parts of the world. hav-
ing increased very largely in the far
| east and in South America and pos
sessing the possibilities of much
larger increase still, is no longer de-
~ope. f..f-
At the meeting of the shareholders of
Crucible Steel today the new financial
plan involving the tripling of the
common share capital was unanimous
ly approved. 1t was made plain,
however, that recent financial events.
while not affecting the ultimate put
ting through of this plan. had had
their effect in postponing it. The
chairman of the board denied that
there was to be any immediate stock
dividend and said any such declara-
tion would have to await the decision
of the Supreme Court on the stock
dividend tax case, yet in the original
circular to the shareholders a month
ago nothing at all was mentioned
about the tax question and the i'm
| preston was certainly left with all
| who read the circular that II was the
| intention Of the Crucible steel to go
| ahead with the recapialization scheme
| without waiting for the Supreme
| Court to act.
! Crucible steel stock was not affect
| ed one way or the other by the an
| Eouncement. because this announce
, ment contains the virtual promise OF
! tha distribution in due time and IN
| some form of the accumulated war
surplus.
the market position of the minor OTIS
certain of the large brokerage houses
in Wall street. which have looked into
the oil situation. have turned bulltsh
on these stocks. 1t is well known
fact that the oil production at the
present time is far behind demand and
that every effort is being made to IN
crease production
ing an importer of oil at the present
time it is learned that several Tor
eipn countries have come to this mar
ket for the first time as purchasers
one of these foreign countries is Swe-
den. which heretofore has got its oil
from Rumanis-
The minor oil group on the stock
exchange. which includes Sinclair.
Middle States. Transcontinental, Union
Oil. California Petroleum and Caddo.
has been shown distinct turn for
the better recently, due to the TACT
that as these stocks We're the first to
feel the brunt OF the selling they are
naturally the first to recover.
All of the above mentioned stocks
are still far from their top prices. but
IL can be said that in the past week
the buying in some OF them at least
has been of a substantial character.
Middle states and Transcontinental
were under pressure again shortly
after the opening. but Sinclair hung
, around its new top made last week.
The situation in California Petroleum
has been materially improved by the
massage of the land-leasing bill. This
releases to the company close TO S1.-
5oo 900 which was tied uD in a suit.
but which is automatically released
with the passage Of the bill.
Another Raid by shorts -r
shorts made another raid upon some
Of the more speculative shares at mid
day despite the casing OF call money
to s per cent.
General Motors was driven down 10
points from last weeks closing ana
steels and allied industrials were TO
points lower.
CHICAGO LIVE STOCK MARKET.