Evening star., 1926-10-08
BREAK IN COTTON
SHAKES STOCK LIST.
Selling of Shares to Cover
Commitments in Staple Has
Depressing Effect.
BY STU ART +. WEST.
Special Dispatch To The Star

Special Dispatch To The Star.
NEW YORK. October S.--Today'
stock market had to face the test ol
n fuRher violent break in cotton
which slipped prices down To new loW
levels for the season. This decline
followed publication of the Govern
ment crop estimate. which made an
extraordinary showing. 1t placed the
proba BILE total of the 1925 crop al
1922 900 bales. which was fully
1000 900 in excess Of some OF the prl-
Nate calculations given out during the
last week or two. and at least 100000
bales above the average prediction.
There is no doubt that some specu-
lators have been caught in cotton,
who were committed at the same time
TO the side of advance in stocks.
Naturally in trying to protect their
position in the cotton market they
had to sacrifice their speculative
share holdings. But the main effect
Of the cotton break upon the Stock
Exchange was to raise ii serious queS-
tion as TO how business conditions
were going to he affected in the South,
and how this would show in the earn
ings of the Southern carriers.
Cotton Shakes Market.
When cotton broke nearly 100 points
the market was shaken for time con-
Siderably Atlantic Coast Line. which
early in the day sold at 205. quickly
fell ) points. weakness developed in
Southern Railway and there was a
renewal of selling in the American
Agricultural Chemical issues on the
ground that a drastic curtailInent of
next years cotton crop was logical TO
r.-;fh F-Il in
the demand for fertilizer.
But the market had been going
down almost without interruption for
a week. Many insecure spec ulat tive
accounts had passed into stronger
hands and a good sized short interest
had been built up. These constituted
important resisting factors against
further selling.
Prices went lower for time the
chief incident being a sharp drive
against General Motors, which forced
it down below 153. In other directions
the declines were. for the most part.
held to one-half point. and some stocks
did not go down at all. Then toward
midday the market turned. partly as
4 result OF the short covering, partly
~ the result of fresh buying based on
the reasonable assumption that after
having lost 10. Is and 90 points in
little more than month the list was
entitled to some sort of a recovery.
Leaders Above Yesterday.
In the afternoon most Of the leaders
were either selling around or above
Yesterdays closing. This was true of
L S Steel, Baldwin Locomotive.
Chesapeake and Ohio, Atchison and
New York Central. Baltimore and Ohio
was up nearly point. Illinois
Central. after having lost half a point.
rallied. Erie was higher and Norfolk
and Western came back hriskly.
The pressure was lifted from the
public utility shares and these were
up for the most part. Electric Power
and Light was steady around 16 and
National Power and Light was frac
ton higher. The decline in American
Power and Light was checked. Again
there were signs of special buying in
Hudson Motor and Wall Street con-
tinued to believe that, despite denial,
something important was going on in
the affairs of this company.
The market continues to hold its ad-
vantage through the late afternoon.
Traders on the short side were taking
In their contracts as they saw, after
four successive days of decline, the
market was due for something of al
rally. Van Sweringen stocks led the
recovery of the rails, Chesapeake and
Ohio and the ErieS particularly. Other
rails participated in the advance, but
were not at all active.