Evening star., 1922-06-13
BUYING CHECKS
FURTHER DECLINE
Market Tone, However, Few
erish and Unsettled.
Sharp Recoveries.
BY STUART p. WEST.
Special Dispatch to The Star.


Special Dispatch to The Star.
NEW YORK. June 13.-It was made
still clearer that Mondays violent
downward plunge on the stock ex-
change was the result Of inside rather
than outside conditions. by the Sc
Quel today. There was not the slight
est change in the outside surround
ings overnight. Whatever unsettling
influence European economic prob
lens had exerted, was quite as much
present as 1t had been on previous
days. The decline of the allied cur
rencies continued conspicuously again
In French francs. Foreign govern
ment bonds. and, in fact, the foreign
securities market In general, moved
with the same indecision.
But as soon as the New York stock
nights demoralized state of things
was quite apparent. AS always hap
pens after such sudden break, there
was considerable further liquidation
of overextended or otherwise dam
aged speculative accounts.
Irregular mt Start.
This selling produced an irregular
ness was only momentary. and
when 1t was seen that the forced
liquidation had run its course a rally
set in which did not stop until prices
had been lifted a point to three points
all through the list.
The buying under which this re-
covery took place came obviously
from three SourceS-frOm traders on
the short side covering their commit
ments, from other traders repurchas-
morning stocks. which they had sold
out at much higher prices only a few
days before. and from pool operators
renewing here and there their ac-
tivities In tentative way.
Buying From Three Quarters.
The buying orders originating in
these three quarters coming into
competition with one another, made
the first upturn very rapid. But by
after noon its force had been spent
and the market Quieted down. The
fall in the foreign exchanges became
more and more pronounced as the day
went on. French francs sold we'll
under $50 as against 8.S1 at Mon
days close. 9.14 week ago and a
high of GAS at the outset of April.
Italian lire for the first time on this
downward movement fell through the
.05 level.
Transactions In German marks
we're made with nominal quotations
mostly around 81. The pressure
feet sterling and to drive rates down
nearly .05 in the pound from the
high Of the year touched last week.
Natural Market Reaction.
1t was recognized on all sides that
Mondays shake-out was the natural
reaction in market in which specu-
lative operations had been over done.
but II was felt that there was some
thing else in the situation to account
;o11 30 la
cline. There were hints around the
street this morning that investiga-
tions conducted by the stock exchange
autf critics had uncovered a numbe-
of weak spots in the shape OF houses
which were carrying too many stocks
been given to understand that they
must take In sail. and when they saw
the market slipping rapidly. they were
forced to unload for whatever they
could get
Pool managers and other operators
controlling the market for individual
stocks. see'ng this wave of compul-
sorry liquidation coming. withdrew
their supporting orders. or at least
put them down at considerably lower
levels. This. IT was said. afforded a
logical explanation for the peculiar
in with the sharpness of the recov-
cry today. which was precisely the
action of a market relieved from a
special selling pressure.
Rush to Buy.
Yesterdays decline had been so
much more drastic than looked for
that there had been little time up to
the close Of business to examine the
effect upon customers accounts. This
examination was not completed until
long after 3 o'clock. and the result
ing margin calls did not bring their
response until the opening this morn
ing. The expectation was that the
closing out of weakened margin hold
ings would involve a great deal OF
further liquidation with another bad
half hour or so.
AS il turned out the selling of this
character did not reach anything like
the volume that had been looked for
and when this was perceived there
was a rush to buy both for long and
short account. which mingled with a
renewal of pool activities in various
directions. brought about an imme-
diate and very sharp rally.
Creditors and stockholders Of Mo-