Evening star., 1933-07-21
STOCK LIST TAKES
SEvERE'ST SETBACK
Fresh Flood of Selling Sends
Entire Market Down
in Afternoon.
BY GEORGE T. HUGHES.

IN Afternoon.
BY GEORGE T. HUGHES.
Special Dispatch to The Star
NEW YORK. July 21.-The most
severe break yet seen was registered on
the stock exchange today.
A fresh food of selling swept over
the list in the afternoon, after morn
ing Of comparative quietness. The re-
suit was wide open breaks in all classes
OF stocks. Stop-loss orders were uncov-
cred on the way down and accelerated
the decline.
While as a rule the losses were not as
large as those in the alcohol stocks
which started the debacle Wednesday,
they were more uniform, affecting the
most conservative issues as well as the
highly speculative Stocks Of the grade
of General Motors. United States Steel.
American Telerhone and N. Y. Central
broke in disorderly fashion.
Closing Report Heard.
Late in the day it was reported that
the exchange would be closed tomor-
row, but no confirmation was obtain
able. If closure is decided upon. it
would be on the plea that the STATS
of brokerage houses are unable to keep
up with business under present condi-
tions.
All sorts of rlmors were afloat in the
Street as to the reasons for collapse
The one accorded the most credence
was that the financial community was
in doubt as to the status of the in
dustrial recovery movement.
The weakness affected commodities as
much as securities. In fact. the signal
for the outburst of liquidation was the
precipitate decline in cotton futures.
Losses in that market in midafternoon
ran to S6 a bale.
Trading in wheat futures at Chicago
had been suspended, SO that market
was not affected However, rubber, sill
In the last hour silver was down 230 to
points.
Margins Closed Out.
These sweeping declines forced the
closing out of margin accounts in all
speculative markets. Undoubtedly there
were numerous casualties among the
overeXtended
All groups of stocks went together
today Gold mining shares which had
held up in the early trading. broke as
badly as the rest. HON sstake Mining.
the highest priced issue on the big
board, at 2i0 was of 81 points.
Ten minutes before the close a mod
crate recovery appeared, but nothing in
proportion to the extent of the drop.
simultaneously with the break in
prices for securities and commodities
there was vigorous rally in the dol
lar, although it had been weak in the
morning. Sterling exchange dropped
to S4.59, off SIS cents. and the Euro
pean gold currencies declined.
Speculative bonds were almost as
weak as their corresponding stocks, but
United States Government issues were
steady.
The market opened with mixed
changes, rallied point or two and then
met enough additional offerings to
check the recovery. At noon-time the
averages were not much changed.
OF debris which would have to be
cleared away before traffic could pro-
ceed along the one-way street Senator
Thomas had prescribed for it. The
margin calls that went out overnight
were said to be well met, but there was
good deal of voluntary liquidation
today and probably little forced SELL
ing.
What part, if any, operations for the
decline played in the collapse, it is diff
cult to say. The chances are that short
selling had very little to do with it. No
one could foretell how far the craze
for the repeal stocks would go. The
boldest bear heSitated to sell the liquor
issues short because he ccZld not tell
what might happen before the inevit-
able reaction came. This lack of SUBJ
sLantial short interest contributed to
the devastating character Of the break.
Repeal Shares Rally.
The whisky stocks today rallied for
the first time in two sessions, but not
decline. National Distillers in the first
hour was up points but it lost good
part of that gain by midday. U. S.
Industrial Alcohol came back or
points and the others lesser amounts
Belated liquidation appeared in some
Of the chemical stocks, among them
Montsanto and Columbian Carbon.
Corn Products was heavy and Celanese
had another setback.
On the other hand. the rails were
well supported. New York Central and
Illinois Central were the strongest dur
ing the early trading. Southern Rail-
way and Great Northern preferred also
advanced, as did Union Pacific. This
part Of the market took its cue from
bonds, moving more or less with the
senior obligations
Gold stocks rallied, but speculation
in them was restrained by the uncer-
tafnty in the rest of the market Nc
Intyre and Alaska Juneau made the
best showing.
One thing the traders in stocks did
not have to worry about Sas another
break in wheat, as trading in futures
in Chicago had been suspended, ito
give the overworked clerks time to catch
up," it was explained. Other commodi-
ty markets were irregular.
Sterling exchange rallied vigorc usly
after yesterdays sharp reaction. The
first quotation on this side showed an
advance of 711a cents, all of which gain,
however, was not retained The dollar
weakened in terms of European gold
currencies.
Aside from its own internal position
and the gyrations in the dollar, there
was an undercurrent of apprehension
in the Stock Market as to the workings
of the National Recovery Act. A good
deal was heard of the warning by Gen.
johnson in regard to an approaching
crisis if purchasing power was not In
creased.
Copyright, 1933)