Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-10
DISTRESSED SALES
SEEN CRISIS CAUSE
Short Selling Not Blamed for
New Lows on Market
Yesterday.
BY JOHN F. SINCLAIR.

to reach 1920 as against the November
lows of 1858 and the last June lows OF
204.47.
Twenty standard railroad stocks, ac-
cording to the Dow-Jones averages, went
down 236 points, and utilities 400
points. This, in spite of the fact that
the brokers loans showed a decrease OF
$158,000 900 and are now down to ST.
COS ,000, 600, the lowest since 1927.
Probably the failure of Prince 81
Whitley, a New York Stock Exchange
house established in 1878, which has
nine branches throughout the country,
was largely the cause.
The standard stocks went with the
rest. None was spared. Everything
went. The cheap stocks and the blue
chip stocks all slid together, and the
closing was soft.
THE stock market decline today was
due to distressed selling, and not to
short selling" said one large trader to
me. "One very smart group of British
traders have been selling stocks for the
last 10 days and turning their money
into cash. This, too, has affected the
market
will today be another hectic, hair
raising cay? Yesterday was more than
that. It was, in addition, dlscouraging
and demoralizing.
UNLESS SOItlctllulb
pens, the market Is due for rally" con-
tinued my trader friend. Further than
that he would not commit himself.
But the bulls seem tired after two
weeks Of battling against the tide.
Which reminds me of the story of the
great naturalist. Charles Darwin, who
divided an aquarium with clear-glass
partition. He put lusty pike in one
section and minnowS into the other
The pike would strike every time min
now approached the glass partition
But 1t was useless. After three months
Of fruitless spearing, in which his nose
and face suffered severely. the pike
ceased his efforts and decided to take
merely what food was dropped in from
the top.
Then Darwin removed the glass par
tition, the minnows swan all around the
pike, but 1t did not strike at single
one. Why?
1t was thoroughly sold on the idea
that business was. bad and until its at
titude changed there was no hope.
The moral of this is to take another
shot at the glass partition. Maybe 1t
isn't there any more.
When the Reichsbank raised its dis
count rate. to per cent yesterday 1t
was 10 check further loss of gold hold
1ngs, which have shrunk about 20 per
cent In the last three weeks.
The flight of German capital con-
tinues. Frances credits in Germany
are shrinking every day. The political
situation, tied up with the uncertain
question Of reparation payments, is
DR.. Hans Luther, president Of the
Reichsbank. win arrive in the United
States about the middle of November.
The report persists that while here he
expects to seek additional loans in the
American market.
A close friend of Dr. Luther's, now in
the United States. tells me that all
such rumors are groundless, that he
has no negotiations pending in the
United States concerning loans or rep
arations, but his coming is merely for
the purpose Of paying his initial visit
as head Of the Reichsbank to the Fed
eral Reserve Bank of New York, whose
guest he wiz be during his stay.
DIR. Luther has never been In the
United States and one of the first items
on his program after entering into
with the New York banking world"
said DR.. Lutheris friend. "He regrets
that the situation in Germany pre-
vented him from carrying out his pur-
pose at an earlier date
0kdGAA OOuuo, ldCt Lie JULIUS u
all South American republics, have
been depressed by the political news
that has been coming out Of those
countries during recent weeks. One
can now secure q bond guaranteed by
the Republic of Brazil to net better
than 8 per cent.
People often get panicky when they
hear about revolutions in different
countries but no matter which faction
xzrfran Ia x.rf1g 81 -
foreign money to expand the business
life OF the country. Brazil has already
borrowed hundreds of millions, largely
from France. England and the United
States, and has had excellent credit.
The country must have foreign lonas
TO live. That is well known to every
business and political leader in this
Southern republic.
So it's almost a truism to say that
no administration will repudiate Bra
zil's foreign obligations. 1t would be
suicidal.
Brazilian bonds are among the most
attractive issues on the market today.
Thomas L. Chadbourne, New York
lawyer and financier. Is a busy man
these days. After effecting an agree
ment with the Cuban producers where
by l,50o. 900 tons of their sugar win be
withdrawn from the market and dis
tributed over a period of five years, he
has secured from them at the same
time an agreement to restrict exports
TO the United States to $500, 900 tons
for the next crop. His first big OBJ
stacle. therefore, has been overcome.
and he is now preparing to go to
Europe to cooperate with European
interests in sugar restriction.
With Cuba out of the way, this New
York lawyer will leave soon to attend
an international sugar conference in
Holland. But why Holland?
Because Holland interests control all
the sugar production in Java. If this
can be restricted it is felt that the rest
OF the worlds sugar countries can be
handled easily
Cuban holders of sugar will be re-
paid through loans, based upon the
sugar itself. which will be held as col
lateral. The proceeds received from
the sale Of one-fifth of this surplus
sugar placed on the market each year
will be used to retire the loans made
and iquidate the obligations.
It's a very ambitious program. II
successful, II will break new ground in
the field of international cooperation.
(copyright, 1880. by North American NeWs-