The Washington herald., 1920-05-08
STOCK MARKET
VERY QUIET
Flood Of Pessimism Causes
Gloom on Wall
Street.
RALLIES AT CLOSE
Speculation Is Neglected
While Authorities Argue
Proposed Tax Bill.
RALLIES AT CLOSE

New York, May Wall Street
was flooded with pessimism today to
such an extent that old traders
bought some stocks in the after
noon. The feeling was so desperate 1t
could not possibly be true. The stock
exchange authorities Of the country
were in angry conference over
plan ito save the business of the
country from the new stock tax The
head of the National City Company
ventured the opinion that the banks
could not finance the railroad needs
of the year. Labor men presented
a memorial showing that the cor
porations Of the country had prof
iteered to the extent of billions
since the war began. There were
rumors OF a real railroad strike to
come by way of emphasizing the
demand for increased wages. and
the railroad managers let 1t be
known unofficially that the men
could strike and ruin the country
for all they cared. There was no
hope anywhere.
Closes I'm Midst of Rally.
Stocks were heavy at the opening
and continued their decline until
the average losses were about 2
per cent. Then a moderate buying
movement began which caused a
rally of about a point. Atlantic,
Gulf and West Indies and Virginia
Coal advanced about eleven points
from the low. Then somebody dis
covered that a large bank had
loaned S6.000.0O of time money for
sixty days at So per cent. This be-
ing the first large amount of time
money put out since the first of
April. IL cheered the Street up and
the close was in the midst of a fair
ly good rally.
The short Interest.
The short interest in the stock
market is large and will probably
be forced to cover by the brokers
who, working in harmony with ,the
exchange in its efforts to educate
the public to the fact that 1t is the
friend of the investor and therefore
should not be taxed out of existence,
Will. OF course, refuse to accept or
ders from operators who are raid
ing the market. The police COM
mittee of the exchange has full
power to prevent raids on invest
ments.
The exercise. of that power will
naturally be the first step in the
campaign to educate the public.
Proposed Tax Bill Hurts Market.
As prices in Wall Street at the
moment have no relation whatever
to values. the proposed tax on
speculation is considered the most
important factor in market move
- f9
most dangerous and unpatriotic. 1t
will destroy speculation. and IL
that is done. it will then be per-
fectly proper to talk panic not
only in Wall Street. but in all lines
OF business The unhappy feature
Of this proposed tax is that II is
largely a result of the fact that
the New York Stock Exchange has
neglected its duty to the public.
BY permitting raiders to destroy
investment values on the slightest
pretext. the exchange has permitted
the impression to go abroad that
speculation is the same as gambling.
As D matter of fact, speculation Is
a legitimate and necessary part of
all business. Reformers in Congress
who do not understand the first
principles of economics imagine
that by striking at the spectators
they will reduce the cost of living
and increase tax receipts The
proposed law would increase the
cost of living by making it ex-
tremely difficult to get capital FOR
any enterprises; IT would reduce
the number of dollars received in
taxes, because it would destroy the
business on which the present taxes
are levied. 1t is such an absurd
tax that there is little chance or
it being made a law.