Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-06-17
another BULGE
II IN MEXICAN PETE
Weeks Shakedown Logical Out
come Of an overbought
VIA Market

New York. June 1T.--Apart from
the Mexican oil shares and few other
specialties today's stock market did not
amount TO much. There was another
big spurge in Mexican Petroleum of
4 points on the top of yesterdays -
point gain on the announcements Of the
signing of the agreement for the pay
ment of the Mexican debt. While this
was regarded forcrnnncr, Of n re-.
establishment of friendly relations be-
tween this Nation and the Mexican
Government. 1t required a rather wide
stretch of imagination to determine as
how Mexican Petroleum was going 20
benefit particularly from this happy
event. Some Of the other concerns.
such as Southern Pacific and American
Smelling. which are likely to get more
out of it made only indifferent re-
sponse
The jamming up Of Mexican Petro.
leum resulted largely from the familiar
strong-G arm methods often applied by
the clique behind this volatile issue
IT was not an inspiring leadership.
although influenced quite n good deal
OF covering Of the short interest The
trading in the general lists. however.
was at considerably slower pace and
what rallies were made lacked III" sta
bflity which attended the recent re-
coveries.
Mexican Government issues featured
the bond market. moving irrrgularly
on oiit-taking. Tho I per cent rose
IN points and reached = points. The
regular Js rose ;. only to fall back
29s. while the IS wore steady at a l.
point advance. National RAILWAYS Of
Mexico i>2s advanced IT, points Lib
orty 4th 4'4s mad" a record price for
the year at 10O.12 and other domestic
war fotationS showed further trmnrss
Iennsy lvanla Consolidated 4les. Eric
General Is. Mercantile Marine IS and
consolidated Gas IS were fraCttonally
better. Seaboard Adjustment IS lost
! point and moderate reccsSions were
recorded by Chile Copper IS. Ccrro do
Pasco SIS and l.. $. Rubber IS.
seldom in the history Of Wall Street
has there been such n thorough agree.
ment as to the moving cause Of the
sharp reaction which has been in
progress in the stock market during the
past week. 1t is the history of spcru.
lation all over the world that mar.
kets become ovcrhought eventually, no
matter how constructive underlying con.
ditions may be. Any one paying but
slight attention the last three weeks
20 the indiSputable caution signals.
which were at all times plainly dis
played. could easily recognizes iust such
q collapse Of an inbated market struc-
ture was inevitable.
For some few weeks pSvrhOIoricoI /
rather than outside influences were the
actual governing motive. and the cOntin-
uation of the forward swing was deren-
dent more upon the strong arm methods
of the Speculativ" pools than from any
stimulus ordinarily 70 be derived from
favorable conditions affecting the gen.
eral situation. In all periods of a pro-
tracted rise there is the \ual mad rush
of irresponsible wo>N-be sperulatorS.
who soon get beyond their depth. eXcr.
cising not the slightest Judgment ms 70
either the amount involved or quality
OF their commitments. This creates a
menace to the market structure because
or the sudden increase of supply coming
on the market whenever the enforced
liquidation of such holdings becomes
necessary
The breakdown Of the market SUI
perstructure. therefore, cannot be
charged to any adverse change in either
fundamental or basic conditions. On
the contrary, all testimony at hand
would seemingly indicate the recon-
struction movement mad secure foun-
dation. This. at least. is suggested in
the progressive Improvement in mrr-
camille lines, continued expansion in tile
steel production and encouraging car
loading reports from the railroads. \
month and over ago, however. there
were present many reasons for assum-
Ing the forward movement in the Secilr.
ity markets was fast out>trirDinC the
Improvement in general business. The
momentum Of the bull movement. as
noted in all iUr swings, had reached
such speed as 10 carry the market
along for some time without the need
OF stimulating developments. This. to-
gether with the plethora Of funds avail.
able for stock market accommodations
always the handspring of active specu.
lation, resulted in veneerng the weaker
structure of the market and permitted
liberal distribution on the part Of the
more powerful pools.
While the technical position Of the
market accordingly was materially i'm
proved by the weeks severe decline II
would be difficult TO determine ar this
juncture whether the reaction rcllrp-
sented merely temporary halt in the
constructive campaign or RI" rulmina-
tion of the first stage Of the bull market
OF 1872. The situation IS somewhat COM
plicated by the unknown and unmcas-
urable influence of the drastic house
cleaning instituted by the Stock Ex.
change officials. The proposed regener
alton of Wall Street has 50 far produced
quite COnSid"rabl" volume uf li0ui-
dation, which figured 70 Il large rytou,
in the market shakpdown. What fur
ther must be done in thl, conncrt.sn IA
bring about the corrections desired bv
the exchange managers can be only con.
jectured II is evident, nevertheless.
there are some who should NOT have
done So bur who are almost Cur.,Il,