The New York herald., 1922-09-13
FINANCIAL NEWS
AND COMMENT
Market Receivers From Upset
Due to Sudden Selling Of
Great Western Stocks.

An unexpected power Of absorption
was displayed by the stock market yes
terday when 1t was called upon to take
considerable selling. particularly in the
lower priced rail group. Tho match
which touched of the fiare Of selling Of
those railroad shares consisted Of an en-
tirely unexpected assault on the common
and preferred stocks and the bonds Of
the Chicago Great Western Railway
Company.
The bonds OF that company broke
about IL points from their opening ngure
to 451s. while the two classes Of stock
collapsed proportionately. All sorts Of
rumors flew about the financial district
ues OF the roads securities. but the truth
of the matter was that traders found
and uncovered another weak spot In the
railroad situation.
Heavy selling from that source nat
urally brought out considerable iiquida-
tion from frightened holders of these
securities. The absorptive power Of the
greater than in the cases of the stock
issues. All the securities rebounded un-
der urgent covering before the close
however, and the net changes did not
reveal by any means the extent to which
the decline had gone.
The Chicago Great Western Is not
In as perilous position at this time as
it has been in months past; neverthe-
less, 1t is one of the roads which are
not earning their fixed charges in these
times OF vast improvement In railway
earnings.
Naturally selling Of this character un-
settled the entire market. and for time
there was a decided tendency toward
lower levels. The real charactec of the
market was revealed before the close.
however. when persistent buying made
it's appearance and prices advanced
much more rapidly than they had de-
clined in the general list.
| Assaults and reactions OF yesterday s
| character are bound to make their
appearance from time to time during
the course Of an upward swing, but they
do not change the fundamental position
of the market as a whole, except to
strengthen It. In the sharp rally at the
close 1t was the stocks in which greatest
speculative interest has been taken re-
Gently that responded most quickly and
with greatest vigor to the buying. Pool
operations could be seen In many cases.
| but the preponderance OF the purchasing
appeared to be for account of those who
had become panicstricken during the
| earlier hours of the session and disposed
of their stocks.
| Although there was no change In the
credit situation with respect to time
| money, call funds once more developed
a hardening tendency toward the close.
There are many who feel inclined to
ascribe the increase in call rates Just
before the end Of each days session to
preparations for the quarterly income
tax payments due Friday.
What is actually happening, however,
is that business expansion is absorbing
vast amount of the surplus funds
which have been used for months past
| to finance stock speculation. Not that
there is any prospect OF a tight money
market, for there isn't at this time.
Whereas in recent months money has
been in such free supply that 1t has been
offered on the floor OF the Stock TX
change almost without limit, there now
exists the situation IN which 1t has be-
come necessary for the exchange to bid
for funds from time to time in order to
meet its needs. A perusal OF the present
state of the bank clearings of the nation
as compared with year ago VIII dis-
close where the big surplus OF funds
has gone.
In the bond market the only fea-
ture was the weakness OF the Chicago
Great Western As. Liberty issues held
firm. and foreign bonds recovered Mon
days losses to some extent. Cotton re-
gained what was lost in the lower trend
OF the preceding day. Foreign exchanges
were shaded slightly. with business very
dull.