Evening star., 1939-04-09
Secret Bear Raids
On Market Seen
As Prices Fall
Selling Via London
Laid to New York
Stock Operators
BY HENRY PAYNTER,

BY HENRY PAYNTER,
Associated Press Financial Writer.
NEW YORK, April 8.-Some
financial leaders said today they
believed Wall Streets war jitters
had brought about market decline
and business setback greater than
known facts warranted.
However, they made 1t plain they
did not predict turnabout. They
pointed to continuing widespread
confusion over the world outlook.
Since March l, more than $780,
100000 in value has been wiped out
from the quoted prices Of all stocks
listed in the stock exchange here
alone.
London stock prices relatively
have not suffered nearly so bad a
fall. Yet New York Stock Exchange
sources, international banking, ex-
change and brokerage houses re-
ported a good part of this week S
selling orders here had come from
London.
Bear Raids Blamed.
One leading banker, however, ex-
pressed the opinion some OF the
weeks bear selling presumably COM
ing from London. actually originated
in New York City from local bear
operators fearful of running afoul
of the Securities and Exchange
Commission. Trading in this round
about way, it was said, may enable
them to escape official scrutiny.
Experts close to the stock ex-
change pointed out that compara-
lively small selling orders recently
have caused drops Of several points
even in most active stocks. and
claimed this phenomenon was at
least partly due to the fact that the
cushion" once provided by "in-and-
out" short sellers was absent, due
partly to present trading restrlc-
tions.
Many financial leaders professed
some bewilderment because war
specters seemed to be terrifying this
world financial capital to a much
greater degree than in the more
closely affected London and Paris
markets.
The domestic business outlook also
came In for puzzled scrutiny. some
leaders holding 1t to be not nearly
as gloomy as the markets action
would seemingly indicate.
Basis for Fears.
Stock market price changes the
oretically represent the guesses OF
investors as to what business will
be like in coming months. In the
first World War. American busl-
ness generally prospered for the time
being. Why. then, should war fears
undermine the market?
Three reasons were widely given
!. Outbreak of general war in
Europe would frighten our money
markets, as it did in 1914. But times
have changed. Then We were a
debtor Nation; now we are creditor
Nation. Then we were short of gold
which Europe wanted in hurry
Now we have more gold than we
know what to do with.
2. General war would dislocate our
industrial structure. While some
companies eventually would pre-
sumably reap profits, others might
they said, at least temporarily, suf-
fer a diminution of business Un.
certainty as to what corporate Sc
curities would decrease in value
helps cause market 'jitters," they
explained.
3. Wars complex psychological
and political uncertainties frighten
money" Capital feels most secure
when future developments can be
reasonably predicted: war can bring
profound changes to basic estab-
lished political and economic prac-
tices, hence is abstractly frighten-
ing to capital, which may tend
therefore to be boarded rather than
invested. Some leading f1nanciers
believe another world war would
profoundly modify the capitalist sys-
tenn on a world scale, hence are
nervous.
Wall Street generally has behaved
lately, some say, as If 1t were almost
convinced general war In Europe is
inevitable. Is that belief justified?
Leading international banking
houses reported their partners and
friends in London and Paris were
much less agitated than Wall Street
They report a definite feeling OF
greater confidence lately in London;
a feeling that, while 1t is not safe
to predict what Hitler may do. be
could not win a war with France
and England and knows it.
Why should Wall Street magnify
incidents that London. more vi
tally concerned. has taken calmly?
The general answer is that the
United States, having a much more
effective international news-cover-
ing machinery. has been more thor
oughly informed as to detail, is con-
sequently more interested and ex-
cited-or so say London and Paris
fihanciers.
Business Hesitant.
Business in the United States Is
inclined to hesitate, leaders said
because:
l. A nation apprehensive of war is
q nation of businessmen who dc
not feel like taking new risks, ma
ton of salaried men and wage
earners who hesitate to buy that
new automobile or that new elec-
trio ice box if unsure the job would
hold up in case of war or uncertain
the buyer himself might not have
to go to war.
Q. Quite apart from the effect Of
war hysteria on business, many in
vestors are described as gloomy
over the prospect of earning profits
commensurate to the risk they
would take in investing In new cor: