The weekly times-record. (Valley City, N.D.) 1912-1922, 1920-01-22
Reckless Investment Followed by
Heavy Losses When Market
Goes to Pieces.
GOVERNMENT SECURITIES
REMAIN SAFE AND SOUND
Uncle Sans Bonds "Good as Gold"
While General Slump Wipes
.-.'41N Out Fortunes.

New rk.-Semi-panicky declines
in the stock market and subsequent
relapses from the partial recovery.
with heavy forced liquidation Of light
" margined holdings of the popular
market favorites on the New York
stock exchange have demonstrated
cleary the dangers Of speculation.
For six months the stock market ad'
vanced, slowly at first and with the
usual "profit-taking reactions" and in
recent weeks going up by leaps and
bounds in some departments Of the
market, notably oil. motor and other
"industrial". shares. Then in few
days there has been a decline wiping
out much of the advance of months
In some stocks practically all of the
advance.
There was reason behind the ad.
vance, but speculative craze carried
it beyond reason. Eastern market
reports for months have carried men,
ton of buying by "the public" high
wages, war profits, the prosperity OF
industry. and agriculture have given
many the fever to speculate.
Investments Prove Disappointing.
Financing of new and old corpora
lions by stock, bond and rote issues
called for hundreds of millions of dol
lars. Issues of preferred stock alone
since January l have totaled more
than S6OO,0OO,O0O and common stock
billion more. Foreign loans with
more in prospect to finance Europe 3
buying added to the burden. The
immense buying power of the coun-
try shouldered the load, but specu-
lation in listed shares was gcGtlng
, out Of bounds. Money rates began
to show the strain. Three weeks
ago call money in New York rose
to 1870, the next week to 20qo and last
week to 800, the highest point since
the panic of 1907. Renewals touched
149o, the highest in years, and time
money hit so. The advance was a
! warning from the banks to go slow
"Pools" and "tipsters" began to- draw
in their horns.
The decline was orderly until in
sufficiently margined accounts were
| liquidated. Then came a smash
! General Motors new common stock
which had scared to 4O61a dropped
to $50, Mexican Petroleum from
2554 to 1856, Texas company from
32S to 2S6, Studebaker from 1885 K
1OSA, American Tobacco from 307 Il
to $40, Crucible Steel from %;
to 200 and so on down the list
Even U. S. Steel, the porverbial mar
ket barometer, declined from l12&s
| to 1913.
! The break extended throughout
! the list, less marked Of course il
! lower priced stocks The bond mar
ket also suffered.
| Peris Of Speculation Shown.
Since the eliminating slump there ha:
been recovery ranging from or, point:
to around 20 to As points in stocks wliCt
, suffered most on the decline but doW1
! swings followed the recoveries and thu
marked atmosphere is not yet considered
; cleared. .
In a nutshell a speculative craze Sc
! the banking interests and the Fed 'ra
! Reserve Board against misrepresentation
No better illustration of the perman~n
and fixed value of government securite:
! can be found than in the present unset
+ tied market, War Savings Stamps ant
Treasury Savings Certificates an
bearinx career unaffected by ' the Storms
of financial stress that overtake les,
| favorable securities.