Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-13
BARRAGE ON SHORT
SELLING RESUMES
Exchange. Continues to
Maintain Check on Tactics
of Bear Traders.
BY CARLTON A. SHIvELY.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, July 13.-The short
selling ghost refuses to be laid. Wall
street had one of its periodical prod
dings on the subject little over
month ago, when the stock market
was lurching heavily. Stock Exchange
authorities announced, without expla-
nation, that they would require a daily
list Of short sellers, with stocks and
amounts, TO be furnished by each mem
Der firm. This requirement. was reduced
to weekly report on June 29, and as
such is still in effect.
A similar report on short selling was
requested by the Stock Exchange in the
Autumn of 1929. shortly after the great
market crash. A somewhat similar but
milder form of inquiry was made in
1919.
Wall Street was considerably per-
picked at receiving the inquiry last
month, it being generally thought that
while stock prices were declining, the
market was falling CT its own weight
Few believed that the shorts Ware re-
SponSible for the drop. although, as
taking advantage OF the trend by SELL
ing short For some weeks The turn
over had been quite small, averaging
500, 600 shares d day. and many OF
the well known bears were reported TO
be inactive.
Higher Ups"
Nothing happened beyond mild buzz
ing around the brokerage house board
rooms. and it was not until the banks
announced that they had cut brokers
loan margin requirements and that the
Government had decided to drop its OPP
position to the Standard Oil Of New
York-Vacuum Oil merger that the mar
ket began to rally. This rally was, of
course, greatly stimulated by the Hoo
yer debt proposal
Those given TO digging for eXplana-
tons were inclined to attribute the
initiative in the latest stock exchange
move to people higher up President
Richard Whitney of the Stock Exchange
and his predecessors have on runner
Gus occasions made it plain that they
regarded short selling as a legitimate
and necessary part of the markets.
Moreover. in a recent survey OF the
markets President Whitney cited figures
10 show that short selling, even in the
Autumn of 1929, was insignificant COM
pared to the liquidation by holders of
stock. Rightly or wrongly, Wall Street
assumed that the criticism of short
selling over the country, where the
tendency has been TO attribute all the
woes of the business depression 10 the
stock market bears, had melted the ad-
ministration to suggest that something
be done to combat the impression of
Stock Exchange indifference TO the
matter
There is no doubt about the latest
barrage laid down against the short
seller President Hoover, with charac-
teristic energy. has openly denounced
the short sellers in wheat. Just about
a year ago. Wall Street recalls. certain
wheat-hedging sales by the Russians
were denounced as the cause Of upset.
ting values. In trading circles the view
is strongly held that short selling at
present is but a small factor. except
in SO far as the shorts are hedgerS,
class exempted by President Hoover.
L. s. Forecasts.
In the grain and cotton trades 1t is
held that the speculative short interest
is not unduly large. The Government
itself has published forecasts for grain
crops which suggest the explanation
of lower prices Harvcsts promise to
be we'll above those of year ago. and,
in addition, there is an enormous carry
over. partly held by the Federal Farm
Board. The same is true of cotton.
However Wall Street is willing To aC-
cept unorthodox views on the subject
of short trading or anything else II
prices will only move higher.
(Copyricht, 1917