Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-01-25
FLOOD Of SELLING
ON STOCK MARKET
Abrupt Breach Follows Boost
of RediSC0unt Rate at
Chicago.
BY GEORGE r. HUGHES.

Special Dispatch to The Star
NEW YORK. January 25.-Specula-
tive Wall Streets reaction to the over
night announcement that the Federal
Reserve Bank at Chicago had advanced
its rcdiscount rate from 3l2 to a per
cent was an abrupt break in prices
So great was the flood of selling
orders accumulated before the opening
that 1t was some 10 minutes after trad
ing started before first sales were re-
corded in United States Steel and Cen
eral Motors. This action, coming OH
the heels Of the selling Of more than
1928 100000 in Government securities
by the Federal Reserve Bank during the
past two weeks. indicated decrease
In the supply of funds that have been
available for stock market purposes.
While this does not necessarily mean
an immediate upward revision in rates
of the remaining IL regional banks, the
outcome of the Boston reserve direc-
tors meeting today and the New York
bank directors meeting tomorrow was
awaited with a good deal of anxiety.
Steel and Motor or.
u. S. Steel opened between 1461s and
lat as against yesterdays final of l487 Il
The opening break In General Motors
carried the price to 1873 where 1t was
of more than 3 points. But 1t was the
industrials of the pool variety which
had been the leaders early in the week
that had to withstand the bulk of
liquidation. Such issues as Westing-
house Electric. Adams Express. Ameri-
can Express, Montgomery Ward. Radio
Corporation, Fleischmann and Gold
Dust Corporation broke from / to as
Y10i1fc unuv YnIiCh nf tho
offerings represented selling by fright
ened holders and how much was for
short account was question, but there
was no doubt that the reserve bank
action resulted in the first definite
change in speculative sentiment.
After the initial outburst had been
completed. rallying tendencies developed
but they were not sufficient to counter
act the sharp declines. The fact that
Gold Dust Corporation was able to move
forward some five points above the pre-
vious final just before midday. OCCASION
ed surprise in view Of its recent advance
but this was merely case of special
ty in a market position still vulnerable
to the work Of powerful pool interests.
Crossing IS 1t sold at its highest since
listing The one group to show best
resistance was the public utilities and as
the session progressed many OF THESE
issues were higher on the day. Posi-
bly, this was direct response to the
amendment to the Walsh resolution af-
fecting the powers to be invested IN
the Senate investigation committee.
Montana Power. Standard Gas Laclede
Gas and Brooklyn Edison were among
those to reach higher levels.
Air Reduction Climbs.
The announcement Of the proposed
split-up Of Air Reduction common IN
the ratio OF three new shares for each
Of the present with the new stock car
rying a So dividend resulted In further
rise to a new high record for all time
In the stock. Placing OF Mathieson
Alkali on a S. annual basis. as against
81 paid heretofore. apparently had been
discounted in the rise from the low OF
the year of 1854 TO current prices and
the stock was unaffected.
The rails suffered less than the in
dustriais possibly because they had not
figured as prominently In the recent
campaign for higher prices. The fea-
ture of the group was another sharp
movement in Southern Railway-Mobile
e. Ohio certificates. this time on the
side OF advance. Losses in Hudson,
Nash. Packard. Studebaker and Chrysler
extended from one to more than two
points.
The short account acted as a cushion
at the lower price level and as the ses-
sion progressed good-sized rallies oc-
Cured in various directions. Youngs-
town Sheet & Tube crossed l0l again
for a gain OF more than 2 points.
although there was nothing new at
hand regarding merger negotiations 10
account for the renewed strength
National Biscuit finally worked above
it's previous closing and Montgomery
Ward retraced a good part of its early
loss. The market was in highly
nervous state throughout