The New York herald., 1922-10-31
FINANCIAL NEWS
AND COMMENT
Stocks Suffer Worst Break
Since Start of Declining
Movement Recently.

no sharp break in stocks yesterday
was the most severe since the market
entered the declining stage more than
a week ago. At no time during that
period had the complete absence OF buy
/ ing power been as clearly marked as
during yesterdays five hours of trading
on the Stock Exchange. Losses ranged
from one to five points and more. At
the same time Government bonds stiff
fened materially. and all Liberty bonds
except the first Sias and first converted
As and 4l4s gained substantial portions
OF last weeks Losses. The new Treasury
( 1 Il s also recovered, at one time getting
as high as $3.50. nearly 100 points above
Fridays low of $3.50.
Cotton futures continued their adj
vance and in the early trading made new
highs for the year. Profit taking OF
pretty wide extent resulted in a wiping
out of all the days gains, however, and
the net changes from Saturdays close
were very small.
Wall Street sought far and wide TO
find the reason for the big break in
stocks. Foreign conditions generally
were credited with being the principal
factor. but while they may have played
q part it is hardly likely that they were
solely responsible. For one thing, for
eign exchange rates, while under pres
sure, did not touch the lows of last week.
Neither did foreign bonds.
1t is more probable that conditions
within the market itself were more to
blame than any other single factor.
Speculation overdone must be corrected,
and the most tenable theory at this time
is that the correction begun more than
week ago has not been entirely accoc-
plislled. Certainly there has been no
shift in the trend of business such as
would warrant decline OF the sort ex-
perienced yesterday.
On the other hand, signs multiply that
business Is constantly expanding and
moving forward. But It must not be
overlooked that the stock market is
weeks and even months ahead Of the
actual developments in business and any
tendency to discount a turn for the
worse i'll the nations trade and industry
may be looked for considerably In adj
vance Of the turn itself. ef
More than a year ago stocks began
an upward movement long before the
revival of business made itself felt. In
fact only the most far seeing leaders in
ind ah fn he q
ture. The stock market, nevertheless.
continued to forecast Improvement and
IL was not until four or five months
after the turn in the market came that
the business and industrial Improvement
was sufficiently plain that all could
read and interpret the signs. So 1t is
not to be said that the continued inn
provement in all lines Of business and
industry may be expected to push the
market continually higher.
There Is little doubt that speculation
in stocks has been grossly overdone and
that, for the moment, n halt has been
called. Liquidation of speculative hold
ings vast in amount has been going on
without doubt. This may or may not
have been encouraged by banks holding
loans of brokers far in excess of any
previous figure. That the call money
rate should remain around per cent.
with frequent advances above that fig
ure, at n time when credit conditions are
extremely favorable. seems TO bear out
the theory that bankers are desirous of
! seeing liquidation on a rather wide
scale.
Wheat quotations were somewhat
higher, but other grain futures did not
fluctuate to any extent.
Call money on the Stock Exchange
ranged between 4 u and per cent.
In the bond market, prices were gen.
orally lower with the exception Of the
United States Government loans.