Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-06-12
WAVE Of SELLING
. WEAKENS STOCKS
Strength Confined Only to
Few Issues-Foreign Ex-
changes Unsettled.
BY STUART p. WEST.

NEW YORK, June 12,-Weakhess
of a very decided character deVei-
oped in all the leading markets To-
day. Stocks, foreign exchange. cot
son and grain went down simul-
taneously. Insofar as there was any
common explanation to be assisneo'
1T was simply that all these markets
were reacting in perfectly ioslcai
and normal manner from previous
Misrepresentation. This was true III
quite varying degrees according 10
the extent that speculation in each
instance had overdone matters.
The decline was particularly sharp
In stocks and cotton, because there
We're instances where operations for
the rise had been pushed with par
ticular boldness. 1t was not SO pro-
nounCed in wheat. because that mar
ket. by canceline nearly all the
years advance. had already atoneo
for any past excuses.
In the exchange market it was also
case of weak speculative positions
giving way-a position built upon the
expectation of German loan. AL
though it had been perfectly clear
even a week ago that the gankers'
subcommittee was facing very serious
obstacles. the foreign exchanges were
not by any means thoroughly pre-
pared for the formal admission OF
ia ilure.
With the exception of sterling.
which stood up fairly well. all the
allied currencies broke sharply. Ger
man marks were quoted close 10 the
record low of .29t. French francs
broke quite as severely. getting down
to the lowest in over three months.
AT $50, the franc was down nearly
ls,ft ~ - q
high. this entire loss having occurred
Since converting of the Genoa eco
nomic conference.
Selling More Precipitate.
The selling movement on the stock
exchange was more precipitate and al
together heavier than on any day last
week. Again. however. it was against
common sense to attempt any outside
explanation. The European develop
mentS and their reflection in the ex-
changes We've disturbing influence,
but one which had been clearly fore
seen. and, therefore. did not come as
anything of a shock.
The reasons for the decline were
almost wholly connected with the mar
ket position itself. Repeatedly it has
been pointed OUT that the speculative
campaign of ADri! and May was being
carried to extremes. that it was ahuS-
ing the easy credit conditions and was
overmeasuring the recovery of in
dustry
The truth of this observation had
been manifest in the price movement
of last week. where losses OF 5. 8
and 10 points had occurred all
through the list. destroying in nu-
merouS instances almost the whole
gain of the last two months.
Weakness Is General.
The weakness was very general. 1t
nj in
stocks. which have not had the rise
that the average industrial group had
had II was in stocks like the oils.
equipments. motors and Steels, upon
which las. month speculative opera
tons had mainly concentrated. 1t Is
inconceivable that the rails should
have been sold because of any gen
uine miSeiving as to the enforce
ment of the labor board decisions
which now promise wage reduction
OF $3.50. a0o, 600 year
Railway stocks were simply 60
ing with the general market. thrown
over with haste by the speculative
interests. which had found them selves
with greater load than they could
carry.
Selling of InduStrinlx.
The street was satisfied in the main
to attribute the decline to general
causes. namely to the overbought con-
dition of the market and to the fact
that the speculation of last month
had been altogether excessive. But
there were also various more spe-
cific reasons brought forward in con-
nection with some of the group de-
clines.
In explanation for the weakness in
most of the oils the talk was about
the big surplus in the midcontinent
field and about the failure of the in
crease in prices to materialize. But
private intimatons of increasing COM
petition in the rubber and tire indus
try were brought forward as a bear
point against these stocks.
Reaction in Rails.
Railway shares. considering that
they were far behind the Industrial
in the recent advance, have had an
altogether disproportionate amount of
reaction. At today's low. Reading
was off 10 points from its recent high,
Rock Island off 8, New Haven 8,
Union Pacific and Southern Pacific
and Baltimore and Ohio 5. The
striking fact was that in some of
these instances the entirsp rise of
April and May was cancelled. South
ern Pacific was back to where it was
selling in March, Union Pacific nearly
the same. while Reading was points
lower than the best it sold for three
months.
There is no paipable reason for rail-
way stocks having such decline, so
far as their present earnings are con-
rerned.
Tobacco Stocks.
United Retail Stores, with a further
decline today, registered loss of 10
points from where 1t was selling
ht the time, two weeks ago, when
the merger with the Tobacco Prod
ucts was announced. AS was pointed
put then, careful analysis based upon
the official statement regarding pres
snt earnings and dividend prospects
made it clear that on any basis of
exchange into the new stocks Retail
Stores would be a decidedly risky 6
Her cent dividend posi- bility, and
kbove 20 was much overvalued.