Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-04-24
WEEKS COLLAPSE
AN EYE-OPENER
Market to Certain Extent Rem
dered Vulnerable by Numer-
Gus Events

New York. Aprn 2l.-Thc Evening
/ Suns weekly financial review today
says
Tho break in securities prices this
week took Wall street unawarCs. 1t
= would he prcsuming a good deal to ven
1 turc an explanation Of the movement
without rctraring the ground of scv-
/ oral weeks past. since there appeared to
/ be nothing in the way Of current news
/ dcvolupmcnts to account for the sudden
onslaught.
AS premise. perhaps il might be
suggested that the stock market has
assumed national proportions in Il sense
that Il did not have before the United
states Government began to issue do
mc~tir loans for the prosecution Uf the
American phase of the war. The sale
VI Liberty Bonds created new investors
and potential spectators in stocks who
were not confined to the communities
contiguous to the large centcrs Of DOpu
lation. rs was formerly the case to Il
great extent.
Therefore il Is question if the New
York idea uf funcird local control Of
. the markets drstiniCS should not be
yovsci
Thc need for conserving credit rc-
~ONrrrS has hccOmc an argument Of tire
>uuIr roitcrutiou. Its force with the
ruuM and file has been impaired through
more or Jess ront"mptuOuS familiarity.
This has mad" il easier for those in
forests who sock to influence the course
oi urirr~ from day to day for purposes
Of Immediate profit to bring about sit
nation. Within the market which frc-
A uu"utly conflict with true economic con
ditiOnS.
There would seem 10 have been such
a situation created in the recent period
in which much Was heard about a spring
buIl market Since tho decline of
prices illuminating in the carly part Of
February in the lowest levels of the
year. the public has been imposed upon
10 a point. although it was singuiarly
.tuw in responding. It did gradually
respond. aft"r fashion. Prices
climbed steadily upward from the middle
oi February 10 the latter part Of
March Cou~"rvativ" quarters which
note such movements carefully alone
seemed 20 b" aware Of III" scope of the
advance.
Thus tho n.arkrt was to certain
cytrrt rendered vulnerable tn events
which might uurXpectrdly accrue by
way Of emphasizing the strained credit
position cold shipments from Great
Britain have failed to offset ur Cycn
cnuaj the outgo To South America. Tho
Bank of England raised its discount
rate from & to Unr cent
The bill in Congress- authori%iug
Federal Reserve banks to graduate their
rpdiScount rates in the various districts
according To banking needs aud out
standing obligations. became law and
III" Kansas CITY district immediately
awaited itself of the privilege. Through
this period money tigEtonod. the call
renewal rate here aivaucing to 10 urr
cent and the loaning rat" to aS high
~ IL per cent.
There followed IN" 'outaw" railroad
strike. sinister in aspect and fruitful ui
long drawn consequences, "fr"c2ing
money in blocked shipments and other
paraiytic symptoms in trade and trans
uOrtatiOu.
Condemnation .! government post
war "Xtravagauce. m~i>trnre on tn,
urcr>sity for revising Ii" excess profit,
! tax laws and the discussion Of bonu'
! for service men. "utailing inevitably aT
, Increased taxation burden. aided il
leading up to an emotional state which
alarmist report, of a financial panic il
Japan, with all that that might IMPLY
with RESPECT 10 tn" poSSlbI" withdrawal
. hI lllbI country RONl reserves IRON
this country and England, caused to be-
com" extreme.
The reflection Of this state Of minC
was seen in th" MOndn, and Tur>dUy
markets. which were highly unsettled
rulmiuutiuG in the violent slump in tn,
Iu>t hour ot Wednesdays session
Neither tn" hurUng on tn" subject o.
spring rise nor yet th" urgent Iiuul
datiun wor" 10 tn" liking Of the bank,
ing powers. Tn" on" made the pros,
pcrt Of nighrr loaning rates possible
t. the d"trim"nt Of legitimate conner
riaI borrowing. while the other addcc
10 the difficulties Of advancing new
hIancng projects.
The ~h0krduWu. while regarded a
Wholesome from tcrhniral point o.
yi"w. was deprecated because of it,
liuI, nee. confined a bit oXpo>iyely n
il was within the space of three days
when the constituencies of the time
rullrd for spread Of tho mOvemen
over period Of thre" weeks
Thr best upnion leaned tu the view
Z that Wall street had bcrom" dull"d u
.Iar rau>"~ leading t" an inevitable
= break aud in consequence experience
most ~ me sensations of n slecDc
rudcly awakened. On Thursday, afto
an early decline, the list stnaded Will
the price level still materially ubov
that of February.