Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-01-26
NATION wide LIQUIDATION
FINANCIAL AUTHORITIES
SAY IT WILL HAPPEN
Relief Exists on WALL street That
Spectators Have Been Treated
Too rcndfrIy.
ny pnOADAN VAN.


NEW YORK. Jan. a5.-Thc financial
authorities OF tho United states. gov
eminent have dccrced that there shall
be nation idc liquidation OF commo
dities and securities. There is no US
now arguing about the wisdom OF sucl
a decree. The only thing the publ
can do is 10 make the best il ca,
out of the situation Many things ca,
lie said in favor ii such action. Their
Will he good results but also man!
unfortunate ones. Spectators in com
modities have been treated too ten
derby. and investors in stocks an,
bonds too harshly. Tho score is nov
TO ec evcned up somewhat although
there is no doubt that the investors
Will suffer Il; first along with IN,
spectators IN commodities.
The reorly as q whole may sair
i moot question. Always after great
wars there is tremendous speculation
Ia commodities and what has hap
pcned this time IS simply a repetition
of the universal experience of man
kind Never before has : government
had such complete control Of the stu
alton as ours has and never befor,
has government attempted 10 do bN
statute law and governmental ac;
what has always before been left to
the operation OF the natural law al
supply and demand. Tho cNNcrimen'
is interesting and may he successful
should Watch Flicker.
In the meantime, people with inter
est in the stock market should lool,
we'll 10 the ticker. Ia olden times
that is. before the present reserve
bank came into existence, the iiduida-
ton OF securities made AN increase IN
currency because currency once issued
could not be retired quickly. Now
However. the liquida ton OF rommodi-
ties means a contraction of the cur
rency. The loans outstanding against
commodities are in the hands OF
bankers. who. when they are paid of
VIII pass them through the usual chan.
renee from circulation Therefore. tn.
money market will get little relief
from the liquidation OF commodities.
Al s4s same lime That this is gSine
commodities with View OF making
large profits and have bought stocks
that they believe would be influenced
by those profits will be constrained &c
get out of their stocks. knowing tina,
the expected profits will never ma.
terialize This will bring a new sell.
II Will be real liquidation. The pro
fessional traders are already heavil!
short of the market and their cover,
ing VIII absorb much or this: but ii
rs quite likely that for 2 time the
liquidation will he heavier than ths
purchase h> shorts.
Low Record for Bonds.
Another factor TO be considered is
the new low records that Will be
made for Liberty bonds from day &c
day. The people of the United States
own about $4,000. COZ, 600 OF wal
bonds. and they already have n pape,
loss OF more than $1,000, 900 600 in
them. When they bought these bonds
they were assured that they would al
ways be the best collateral OF earth
and millions OF the people bouEh,
more than they could afford 10 pay for
because they thought tina, loans So
"A a lN-. IA.
renewed. Now they find tho rate ad.
vanced 10 level as high as u per
cent in many cases.
Holding bonds that yield 81 per
cent At the most with money borrowed
AT per cent is not good business and
even tho duliest citizen will quicki y
discover that !, will pay him TO sci
OUT. Therefore, a nation wide l!quid;,.
ton OF Liberty bonds is sure TO come
with an avalanche OF sales from da,
TO day, This VIII mean very grea'
lion TO the paper losses already or
record in these securities. This vii
dishearten the public and kill off no,
only stock market enthusiasm. bu,
general business enterprise.
Railroads Discouraged.
Another factor Of market import.
ance is the railroad legislation. Fol
years the Interstate Commerce Com.
mission had full authority to gram
ne railroads living rates, but never
som. ex,n,;, 800 Ju"N'.icu III tniS &c
wasted the money ma, ,hn,. 20, o 1,,
the St,urnmins biIi whtcb n-oSSIi 81
rates truarau,crine 5iln 10, 80, 40 ~,
The fair Valuation OF tho nroncrtv - :,
in ,hc di.r.rh ' .HS pioPcrty, !:
though the interstate Com,nnrca a.
mission would once NOR hcco,,o ~,
sole arbiter OF rates. With a comm nv ~
sion favorable TO the railroads thos,
properties might get rates enabling
them 10 earn not only 5Il3 LmI
y and even . ner cent ~, 49, !;
The railroad peona arc ,.cr,. ,,'l, q n,
couragcd and ,hs ianc ~ IN: -. uS ~, u!S
road legislation is not sust,;,,ir ,
influence in tho market .WSeih"r al ~, ~ :
railroads 20 into EcccHcrsbin wbny
they are turned hack INTO n-;;,' -,
hands depends very nrI,ch ~, ~ - :" j..