The Washington times., 1929-10-26
B A n K 8 AVERT
CALAMITY IN
MARKET
BY ". C. COUSINS

NEW YORK, Oct. 26 Q.N.S).-
Prompt, courageous and effective ac-
ton of group of the country's most
powerful bankers averted calamity
in the security markets this week,
and saved the stock market from
what might have been serious cata-
clysm.
The Morgan partners and the
heads of New York's giant banking
houses met behind closed doors, on
Thursday, while pandemonium was
raging on the floor of the Stock Tx
change, and brokers were striving,
in frenZied fashion, to sell stocks
at whatever they would bring. The
selling wave, probably the culmina-
tion of the load of forced liquidation
the markets have been forced 10
absorb, struck the big board and
other exchanges of the country near
the end Of the first hour on Thurs
day, after the support orders" of
a million shares or more had been
gobbled up by the avalanche of sell
ing which awaited the opening gong.
Stocks Wildly Dumped
For the next hour unexpected con-
fusion and turmoil ragged on the floor
of the Stock Exchange. Efforts 10
find buyers for industrial and rail-
road stocks within a reasonable
range of quoted prices were aoso-
lutely without result, and shares by
the hundreds oil thOI~"tS were
thrown into the seething mass of
struggling, gesticulatlng brokers' ana
traders for the best offers OBTAIN
able, and in many cases these offers
represented a sheer drop OIL ~ anu
30 points between sales.
The turn of the tide in THURSDAY
10000 .OOO-share market came about
shortly after the noon period, When
buying orders for 200, 900 shares Of
United States Steel common were re-
ceived on the floor of the exchange.
Big Steel rallied sharply from 19o
to 2O6 and the forward move was
under way.
Though the bears rose hard on the
terrified market, forced selling OF
weakly-margined accounts and a rush
to unload stocks by terrified spccu-
sators doubtless accounted for the
greater part of the avalanche of
selling orders which broke with VIC
lence over the board,
SMALL TRADERS SWAMPED
Thousands Of small traders in all
sections of the country who under
the strain of the speculative battle
nad responded to previous margin
calls, finally reached the end of
their resources. When they failed
to provide further protection" for
their margin holdings, the brokers
had no choice but to dump their
stocks on the market. Like the
progress of a giant SNOWFALL, the
selling movement gained momentum
as the week advanced, and only the
effective measures put through by
the giants of American finance
saved the market from demoraiiZa-
ton.
Though more than the regular
seasonal slackening in important
lines of business and industry have
been reported this week, the heads
OF the steel, copper, oil and other
industries have been in an optimistic
frame of mind when reporting cur
rent operations as we'll as immedi-
ate future prospects. Steel heads who
attended the annual meeting Of the
American SteA1 institute in this city
this week predicted steady in.
crease in their business next year,
all lines with the exception of au.
tomobile steel buying having shown
n considerable expansion since the
turn of October.
Crude Prices Lowered
Lowering of crude oil prices this
week is expected to be effectual in
curbing the unmanageable flow of
crude oil from under the surface
Of the ground in Oklahoma and
California. This is apparently the
only remedy against overproduction
and the heads of the oil industry
have not failed to use it when neces-
sary.
Liquidation of stocks on an
enormous scale this week can have
but one effect on the money market
and that has been to release mil
lions of dollars from speCula tive
employment to swell the funds
available for industrial and business
activities. The best reflection OF
this situation is seen in the soften
ing of time and call money rates
and the large Increase in the vol
ume Of funds offered for commercial
or speculative use by the banking
houses.
Notable gains in bond prices wers
recorded this week aside Of course
from the oonvsrtiblss. which fol
lowed directly the market course OF
their respective stocks. Prime cor
poration and Government bonds re-
aponded with higher prices to the
easier tone in the money market
and the better demand from 1nsti
tutional and private investors. Busi
ness leaders at the weekend were
confident of the immediate future
Of American trade and industry.