Stock Market Jamboree

Madness. The frenzy of trading on the New York Stock Exchange last week surpassed all previous spectacles. From the floor a ululant howling roared; brokers milled around; pages and messengers doubled around huddles of bidding brokers; brokers chanted a litany of bids & asks at each other, and sweated like the marching monks in Tannhaeuser. Visitors in the iron-railed balcony peeked at the madness below for a few minutes, and were politely hurried out by grey-dressed attendants. When Friday was done the brokers were glad that the Exchange governors had decreed Saturday a day of rest. In five days of trading they had handled 21,352,200 shares, thus:

Break-Down. Wednesday, with 4,820,840 shares, marked a new high record for a day's trading. More important it marked the worst break in stock market prices of the present expansion. They had been dancing an exuberant tarantella; they suddenly clattered into a noisy breakdown. They dropped without warning 5 to 40 points. American Telephone & Telegraph stock, one of the few important ones listed, not only did not wobble, but even rose during the week. But then directors had decreed $185,000,000 of new stock at par to shareholders. General Motors held unusually firm, considering that it has been a "favorite." Chrysler and Studebaker stocks tended to rise. Hudson Motors also made a good record, and Mack Trucks, Hupmobile, Nash, Packard.

Shut-Down. Last week the New York Stock Exchange was again closed on Saturday so that brokers' clerks could catch somewhat up on their back records.

But within the buildings of the neighborhood grey-faced clerks squealed instructions at each other; boys with skins like cellar-grown mushrooms pattered to and fro; nervous bookkeepers scratched names of stocks and bond issues along blue cross lines, drew pothooks down between red and green lines. Theirs was the moil of days, nights* and holidays caused by 3 and 4 million share days.

Yet, last week, surcease seemed in sight. The governors of the Exchange ordered that for a time trading, which begins at 10 a. m., shall stop at 2:00 p. m., instead of at 3 :00 p. m. In four hours less shares can be traded than in five; clerks will have less to record. London long has had four-hour trading days. Boston, Philadelphia and Chicago exchanges may also close early, not because they are frustrated by business but because their activity depends on New York.

"Boobs." Colonel Leonard Porter Ayres, economist of the Cleveland Trust Co., last week made this estimate of the present stock market: "This wave of speculation has extended to all parts of the country, and drawn in all classes of population. Increasing thousands of first-time speculators are watching their paper profits mount, and are concluding that anyone who works for a living is a boob. It is almost literally true that great waves of speculation like the present one cannot be killed off; they have to commit suicide. "How much longer this market may run is as impossible to predict as was the duration of the Florida boom, and for similar reasons. The leading stocks in this market, taken as a group, now yield in dividends about half as much as it costs to carry them on margin. Speculators think they are discounting the future earnings of the prosperous companies. In the bull markets of the past 30 years the prices of groups of stocks have repeatedly been carried up to levels quite out of relationship to their earnings or their dividends. This has happened with the express companies, the rails, the coppers, the oils, and the equipments. The records show that these extreme price advances have always turned out to be based on belated recognitions of past performances rather than on prophetic appreciation of future possibilities."

Seat. A seat on the New York exchange was sold for $398,000 last week, new record.

Markets Abroad also had their week's jamborees. London Stock Exchange saw great activity in coal, iron, mining and textile shares. Talking machine (a great British favorite), artificial silk and mining shares fell in quotations. When the New York rediscount rate rose, London money lenders, borrowers rejoiced; British borrowers would look less overseas for funds. The Paris Bourse was so active that members insisted on a Saturday holiday (as in Manhattan). The fact that 10,000,000,000 francs were subscribed during the week to the French government's new Consolidation stimulated Bourse speculation. Money cost 9% to borrow. The Berlin Boerse traded heavily in industrial shares, but was otherwise quiet. Money cost 7 1/2% to borrow, speculation was heavy. In Tokio, Bombay, and Vienna, average prices in exciting trade rose on the stock exchanges. Trading was quieter, yet active, in Prague and Budapest.

Gold Export. Since last September, when a great movement of gold from the U. S. began, $494,000,000 net have gone. Last week $13,000,000 were shipped, almost all to France, and an additional $37,000,000 was put aside. The gold reserves in the 12 Federal Reserve Banks dropped during the week from $2,690,052,000 to $2,640,809,000. Because the amount of credit Federal Reserve Banks may give is based in large part on their gold holdings, the shipments forecast a tightening of credit.

Rediscount Rate. New York Federal Reserve Bank last week increased its rediscount rate from 4% to 4 1/2%. The Philadelphia Bank did the same earlier in the week; six others previously. Only Cleveland, San Francisco, Atlanta and Kansas City retained 4% rediscounts.

Commerce & Industry are borrowing more money from banks (a healthy trend, economically). New York Federal Reserve Bank last week reported $296,829,000 bills discounted. A year ago they were $118,374,000. However, some of the great difference was borrowed for speculation in wheat, corn, hogs and cotton.

U. S. Wealth now amounts to $320,000,000,000; calculated economists of Stone & Webster and Blodget, investment bankers. Since 1890 population has increased from 62,000,000 to 117,000,000; manufactures $9,372,379,000 to $62,700,000,000; farm products $2,460,000,000 to $19,700,000,000; exports $850,000,000 to $4,870,000,000; bank deposits $4,060,000,000 to $48,880,000,000. In 1890 the U. S. owed foreign investors and institutions $600,000,000; now they owe the U. S. $14,000,000,000.

* Until 2:00 and 3:00 o'clock each morning, taxicabs with their doors held open like traps, line lower Broadway's sidewalk, to carry night workers away. Hornblower & Weeks, stock market brokers, at Easter gave their heavily worked clerks two weeks extra pay. A fortnight ago the company repeated the bonus. Luke, Banks & Weeks, another brokerage house, divided a day's brokerage commissions among their clerks. Other houses have dealt as handsomely.