Heroes, Wags, Sages

To all things must come an end. Last week there came an end to the almost uninterrupted panic of selling that has fermented U. S. stock markets since Oct. 23. At the beginning of the week the path seemed as clear for further selling as in the summer it had for continued buying. The only thing that stood in the way was reason: long had speculators seemed to ignore reason. For the first three days, Panic held sway. Led by U. S. Steel, stocks dropped to new lows. Again there were tales of a "banking consortium" holding secret midnight meetings, tales of the "great bear pool."

Bullish corporate developments late in the week were many. An extra dividend of 30-c- was declared by General Motors Corp. Radio Corp. of America, long the prime scoffing object of "inflation" criers, showed earnings of $8,729,389 for the third quarter, compared to $1,409,299 in the preceding quarter. Announcement was made that the $250,000,000 patent suit brought by Bethlehem Steel Corp. against United States Steel Corp. had been settled out of court. The Aviation Corp. announced it had used part of its $20,000,000 cash surplus to buy stocks other than aeronautical securities.

Public confidence was helped when the Stock Exchange requested its members to report details on all sales and short stock, a privilege not used since the War. Although there is of course no legal wrong in selling short, few big operators would care to be exposed as "raiding the market," especially in a period when a decline might carry along U. S. prosperity. And if the "bear pool" were found to be an actuality, disclosure of its identity would enable powerful bulls to determine exactly how much pressure would be needed to destroy it.

With bullish feeling prevalent, selling of stocks slackened, ended abruptly as the significance of Constructive Factors became apparent. Helping to transform selling into buying was a further reduction ($710,000,000) in brokers' loans, reduction of the rediscount rate to 4 1/2% announcement of a proposed $160,000,000 tax reduction.

After the tension of selling had ended, after Panic had taken at least a temporary departure, the chaotic jumble of happenings during the break became gradually clarified. It was possible to begin to summarize, thus:

Heroes. Julius Rosenwald, board chairman of Sears, Roebuck, early in the decline offered to cover the margin accounts of all his employes, became the prime hero. Later Standard Oil of New York became hero-ized with its announcement that it would lend $43 a share ($11 above the market at one point) to employes who had borrowed on their holdings. Other helping companies were Standard Oil of New Jersey, Humble Oil, Gulf Oil, U. S. Steel, Newton Steel. Late last week, when Washington's official silence was broken with promise of the tax reduction, then of an industrial conference, Hoover joined the ranks of heroes. No mere bullish oratory, this statement meant Prosperity was expected to remain, meant bigger corporate earnings and dividends, more spending and employing by the rich.

A momentary hero during the break was John Davison Rockefeller, who said he and his son had been buying stocks. When prices continued to go down so did Rockefeller's glory. But when last week Standard Oil of New Jersey was selling at 50 3/4, the market was electrified by an order to buy 1,000,000 shares at $50 and Rockefeller became a permanent hero.

Wags. Wall Street has long had its own private store of wisecracks, but not until this year did stockmarket gags glut the revues and become current at U. S. dinner tables. Upon a tense, avid public, the market break released a flood of cracks, good & bad, new & old, clean & smutty. Foreign visitors, expecting a glum, panic-stricken people, were amazed to find a new joke for each new catastrophe. Among cracks more or less good, new, clean:

Actor Eddie (Whoopee) Cantor confessed that when he had heard of Mr. Rosenwald's offer to protect his employes' accounts, he had wired for a job as office boy. The confession was in Caught Short, humorous story of his market troubles.

From the Ritz jumped two men hand-in-hand. They had held a joint account.

Room clerks at Manhattan hotels asked each new arrival whether he wanted a room for sleeping or for jumping.

Sages. Many were the self-proclaimed sages who declared they had predicted the break. But outstanding Wise Man was Roger W. Babson who, after a record of much unsuccessful seering, publicly forecast the decline, although instead of his break of "60-80 points," the industrial average dropped 183 (according to Prof. Irving Fisher's index of 50 most active industrials). Quickly capitalized was Seer Babson's accuracy, as were Wag Cantor's losses. Newsstands displayed for $3 a pamphlet giving Babsonic market recommendations. A long silent sage, John Moody, late last week predicted the break was over, that 1930 would provide a slow rising market with small volume, easy money. A broken sage was Charles Amos Dice, famed market student, who early in October published New Levels in the Stock Market, showing prices would fluctuate around the then current prices, never dropping below the Dow Jones average of 300.

Winners & Losers. From a mass of rumors, little could be definitely learned about the course of individual fortunes. Paper losses of such stockholders as George Fisher Baker and Andrew William Mellon were estimated. On the other hand it was known that the State of New York had profited from the heavy transactions. A tax of 2-c- a share on no par stock and 2-c- per $100 of value on par stock, netted New York $4,884,427 in October. Thus can the state build better roads, broader bridges to bear the increasing traffic of U. S. prosperity.

Generally suspected to be a heavy loser was the Vatican, known to be an investor in U. S. securities. First Vatican sales were said to have been made early in the break, the rest at sacrifice prices. Plans for the establishment of a Papal bank were temporarily abandoned.

Suicides, long rumored, became facts, indicated some losers. Most prominent of suiciders was James J. Riordan, president of New York's County Trust Co. (TIME, Nov. 18). In Manhattan, George E. Cutler, wholesale produce merchant, jumped to death. In Philadelphia, Frank S. Palfrey and W. Paul Brown, brokers, shot themselves. In Chicago, Herman L. Felgenhauer, grain broker, took gas. A Rochester suicide was Robert M. Searle, president of Rochester Gas & Electric Co., who was supposed to have lost $1,200,000 in October. Once before he had lost $1,000,000, had gone to a sanitarium. In Scranton (Pa.), Carl S. Motiska, civil engineer, saturated his clothing with gasoline, lighted it, burned to death. His wife died several hours later from burns she received trying to beat out the flames. To contradict rumors of a suicide wave, New York authorities showed that in Manhattan there were only 44 from Oct. 13-Nov. 15, as compared to 53 last year.

Mandeville, Brooks & Chaffee, Providence, R. I., brokerage house, the first Manhattan Stock Exchange member to go under in the recent crash, was last week suspended by the Stock Exchange for inability to meet its obligations. Liabilities: $4,000,000.