The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-10-11
FINANCIAL NEWS
AND COMMENT
Sharp Decline in Stocks Fol
lows Good Upward Move
ment at the Opening.

Operations in Wall Street appear for
and narrow path OF safe and sound
speculation based on real fundamental
principles and TO have entered the highly
dangerous road where every rumor and
possible. are seized upon as an excuse
for some new campaign. Just at present
it is the expectation OF big melons to
be cut by companies with huge surplus
accounts that is attracting attention.
Tomorrow it may be something else.
Whatever the immediate result OF the
condition may be the practice will be
bound in the long run to prove extremely
dangerous. Wild speculation and reck-
less buying OF STOCKS OF nothing more
than the gamblers hope that big melons
are 10 be cut or other big Developments
are TO occur, and with no more basis
for that hope than widespread rumor
and the fact that a couple of companies
already have taken such action, are
certain to put the market for securities
right back in the same vulnerable post
ton it occupied three weeks ago. when
big reaction got under way which t.
required a fortnight TO check.
When the recession in prices began
in the late trading yesterday there was
evidenced lack of support and buying
power which made the steadier and
more evenly balanced traders in the
financial community pause to take stock.
They found among other things that the
terrific advance of the last week In many
stocks had been OF such violence and OF
such proportions as to discourage and
brighten away the short interest--that
anchor without which any stock marl1e.
campaign IS decidedly vulnerable either
to bear assault or to real bad news
o.Snents
TIE decline was sharp. and in some
OF Che stocks which have advanced most
Violently it was unusually drastic. This
notwithstanding that these same stocks
had made new high marks earlier in
the day.
The extraordinarily good feeling
created yesterday morning by the show
ing made during the receipt of the first
days subscriptions to the Government
bond issue of $500 100000 was reflected
in energetic buying in the stock market.
In such stocks as the Standard oils,
National Biscuit Mexican Petroleum.
Pan-American. National Lead, &C., the
advances were very wide.
Declaration of stock dividend of %
per cent. by the National Biscuit COM
pany later in the day revealed the reason
for the advance in that issue. News
from Washington served to throw cold
water on the theory that all companies
with big surplus accounts were planning
to make a distribution to avoid a big
surplus tax next year. These dispatches
ha nil To clor mr.
tax program was contemplated before
1924.
In the bond market there still was a
reflection OF the high coupon rate on
the new long term Government loan.
High grade rails and industrial bonds
were inclined to heaviness most of the
day. At the same time Liberty bonds
moved to lower ground. The bond mar
ket still is disinclined to regard the fact
that the new Government financing con-
sists of virtually a trading of securities
What II. regards as more significant
apparently is the fact that the Treasury
Department felt ii necessary TO max
the issue. which Is the longest tern
obligation of the Government now avail
able. a Al per cent. debt.
! Foreign. exchanges fiuctuated rather
| aimlessly. Belgian and French franc!
displaying rather startling weakness
early in the day. Sterling, on the Other
! hand. ruled slightly above Monday:
! figures. German marks continued then
| downward swing. making another new
low a S7s hundredths of cent.
Call money advanced to per cent
near the close. but the same thini
occurred the day before without effec
on the market, so it is hardly likely tina
the late decline could be attributed Z
the hardening of the call rate.