Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-10
INVESTORS GIVEN
ADVICE BY OIL CO.
Standard of New Jersey
House Organ Discusses
the Stock Market.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, December 10.-When
the history of the break in stocks is
written in later years and the influ-
ences that brought it to a sudden stop
on November Is are recorded, 1t will
be pointed out that one of the most
spectacular and effective episodes OF
that period was the bid put in the mar
ket by the Rockefeller interests for
100000 shares of Standard Oil of New
Jersey at so.
The turning point dates from the an
nouncement reaching the floor of the
Stock Exchange in the early afternoon
that the RockefellerS stood ready to
invest $4,000, 900 in the shares of their
company and that they had put up a
barrier against any further slaughter
of it either through short selling or
through panicky conditions. They were
never required to take up stock at their
limit, for 1t opened the next day many
points higher and today was selling at
approximately 10.
Position of Shareholders.
The management of the Standard Oil
Co. of New Jersey had not only the
interest of the general market in mind
on that critical day, but also the posi-
ton of the $4,000 employees who were
also shareholders in the company.
Many of them were deeply disturbed
by the steady fall in the price of their
shares and by the rumors circulated
throughout Wall Street and even among
the employees themselves at the re-
fineries and out in the field. Along
with many other corporations the
Standard Oil Co. of New Jersey agreed
to assist their employe shareholders
who might be in distress as a result Of
the market break. However, only 129
Of the total of approximately $4,000,
or one-half Of l per cent, appeared be-
fore the committee to take advantage
of the financial assistance offered to
them.
Obviously as an effort to clear the
minds of their employees Of theories that
they might have had regarding in
vestments in stocks, the organ of the
Standard Oil Co. Of New Jersey, the
Lamp, in todays issue has a most sig.
niflcant and unusual feature under the
title of Investing Versus Stock Gam
bling" 1t Is apparent that this Is ad-
dressed to those who are working FOR
the Rockefeller company, among whom
are many foreigners whose first use OF
capital in the purchase of securities
had been under the plan by which they
were permitted to subscribe to the
shares of their company. This article
deals with the differences between legit-
innate investment and trading in stocks
on margin or making purchases OF Sc
curitieS on a scale in excess Of the
ability of the buyer TO take care Of
them in a crisis.
Three Kinds of Trades.
The article deals with three kinds
of trades INDUCED in by people who
hope to make money in the stock mar
ket." 1t characterizes the first as "es-
sentially a gamble" which is based on
q tip that a stock is due to rise and
in which the individual utilities his
credit with the broker las far as he
can stretch It," The second Is CLASH
ned as a speculation. It is predicated
on good information that a stock is
worth more than its current price and
seems likely to be favored by develop
ments surrounding it. This stock Is
bought on credit. It is often built up
to much larger than the initial amount
through the process of 'pyramiding.
In 1t. according to the Lamp, the spec
ulator usually keeps in close touch with
the market and seldom sees the ser
tificates which he buys and sells" s@
In the third trade the strict invest.
ment operation appears, in which the
buyer employs surplus funds and pays
for his stock or bonds outright"N In
this position he can use the stock as
collateral for loan If he so desires.
This is apparently what some of the
employe holders of Standard Oil of New
Jersey stock did when the shares Of
their company dropped to so and they
were advised to average at that figure.