The New York herald., 1922-09-19
FINANCIAL NEWS
And COMMENT
Stocks Break Badly as Foreign
Situation Becomes Chief
Depressing Factor.

Although the financial community
to believe that the present exceedingly
strained state or affairs in Europe will
not straishten itself out in a peaceful
manner. the extremely delicate situation
was seized upon yesterday as anmuni-
| tion for an assault upon the markets for
securities, and II was successful TO a
marked degree. The break in stocks
was about as severe as any seen In many
months, and gains which 1t had taken
weeks upon weeks of constructive effort
| to establish were wiped out in couple
. OF hours of trading yesterday morning
1t is not to be said, however. that the
decline was the result only of speculative
operations for the decline. The technical
position Of the market had become very
weak. fact which was obvious IN the
closing days OF last week, when every
new attack met with success and every
rally was feeble at best. Speculation for
the rise had been overdone, beyond ques-
tion. The position OF the general list
was such that disturbing news of the
character of that which came from Eng
land and the Near East over the week
end was almost bound to cause very
drastic break.
New complications in the foreign prob
lem were seen in the dispatches ihdicat-
ing that Great Britain and France were
not, after all, unit in the way they
viewed the present situation. The French
were not at all sure that EnSland's
method OF sending her fleet to Turkey
was the best way of handling the prob
lem and showed hesitancy about joining
her island neighbor in the move against
the Turkish leader, Kemal Pasha. 1t
was this turn of events perhaps more
than the actual situation I'm and about
Constantinople which caused holders OF
securities to rush their sale.
Had the unsettlement been confined to
the security markets, it could have been
put down as nothing more than the
result of an overbought condition and
without Significance with respect TO the
foreign situation. except insofar. perhaps,
as that situation had induced bear
operations. This was not the case. how
ever.
The commodity markets acted exactly
as though genuine concern was felt re-
sensational rise on the theory that a
new war abroad would not only increase
the buying of wheat in n large way. but
would materially cut the supply which
might normally be expected from Euro
pean agricultural districts.
Cotton, on the other hand. reflected
the belief that war would end sum-
mariiy the substantial buying from
abroad which has played at least some
part In the rise of cotton prices in
recent months. But in the cotton mar
ket as in the stock market. there was a
sharp rally before the close. due largely
to profit taking operations on the short
side.
In stocks the greatest losses were
sustained by those which had been
marked up by pools to points where
they became dangerously vulnerable.
such stocks as Baldwin, Crucible Steel.
Famous Players, Cosden and number
OF others had advanced in straight
line and a study of their movements
over the last few days indicated pretty
clearly that in time of stress the support
would be lacking.
Among the bonds. investment issues
and Government bonds held well. but as
in the stock market, the speculative Is
sues were under extreme pressure. The
weakness of foreign bonds was fca-
ture.
Foreign exchange rates reflected the
concern over the European situation,
although their failure to react to an even
greater extent was regarded as an
indication that perhaps the news has
been allowed to disturb the financial
community too much. Foreign ex-
changes will certainly lovc TO lower
levels and with much greater rapidity II
the situation really gets out of hands,