Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-14
KEEP CLOSE
WATCH ON MARKET
Recent Action of List in Re-
sisting Pressure Has Made
Shorts Nervous.
pispatch to The star.

Special Dispatch to The Star.
NEW YORK, February 14.-The story
runs in Wall Street that big bear
operator came back from the South last
week and, suddenly appearing on the
floor of the Stock Exchange on Thurs
day, sold about $4,000 shares of vari-
Gus industrial issues. During his raid
he knocked down the price of United
States Steel common to below 1873, after
it had sold the previous day above 14l.
He is reported to have boosted that he
would cover Steel at 125. The stock
opened this morning at IA and went
higher later.
The position of the short interest in
the stock market is now the most dis
cuSSed topic in Wall Street. For
months shorts have had their own way.
They took advantage of all Of the vary
ing industrial, transportation and bank
ing situations that were developing and
day after day sold stocks by the ream. !"
Several Groups in Street.
There have been several important
bear groups in operation, one made up
of New, York members, another with
headquarters in Boston, and third in
Detroit. Estimates of the extent of
their uncovered commitments have at
different times ranged between 5000, 900
shares and 100000 shares.
The situation at present, from the
bear standpoint, Is not unlike that in
1908. Following the steady decline in
prices of stocks during 1907 and the
eliminating episode in the Autumn of
that year, when there were a series of
important bank failures, the market
dragged along, and in the early part of
1908 began to show the same kind of
resistance that it has indicated in the
past few weeks. There was one big
bear group at that time that over
stayed its market. Those who were
active in that period well remember
the sensational Saturday morning. cpl
| Sode followed by the suspension OF one
of the largest operators on the New
York Exchange.
The theory that bears always sell
at the top of the market and cover at
the bottom has as little basis as the
Supposition that the bulls invariably
buy at the bottom and sell at the top.
An analysis of the volume of short
sales would probably indicate that
these are greatest toward the end of a
prolonged decline in stocks and small
est when a rising market is reaching
| its crest. Consequently, the position OF
| a short interest is always most pre-
carious after a period of extreme liqui-
| dalton, Just as is that of a bull pool
when a public that is madly speculat-
| ing for a rise begins to consider the
advisability of selling its stocks while
| it still has q profit.
Short Selling.
Considerable interest has been taken
in the statement made by Eugene
AEovcr ir cy0vern0r Of the Federal Re-
serve Board, in Washington last week
before the banking and currency sub
4 committee, which was considering his
| nomination. Mr. Meyer in 1909 was
reported to have written an article de-
Tending short selling. According to his
statement to Congressman McFadden,
| when he wrote this article he was
| thinking more along academic lines
| than at present. He does not now
favor unrestricted short selling" He
suggested that publication Of the figures
of short sales by the New York Stock
Exchange might be helpful in correct
| ing short selling. 1t is understood that
these figures are available and that
| frequently members of the Stock Ex-
change are asked to reply to question
naires covering stocks loaned or bor-
| rowed.
One of the theories that has been
presented by those favoring short SELL
| ing Is that the short interest provides
| Cushion for the market during the
period of liquidation. Some of the
earlier and strongest advocates of this
opinion are now known to have aban-
doned it. It has not worked out in
a number of trying situations in the
last few months.
Copyright, 1919