The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-03-14
Insiders on Air Mail
Cancellation
Chicago Tribune)

Following the cancellation OF the air
mail contracts stocks Of leading COM
panies fell out Of bed. Aviation cor
portion. which was selling for $l0.75
per share on Feb. l. dropped to $4.37
following the Presidents announce
ment that the army planes henceforth
would carry the mails. North Amer
lean Aviation stock went to s4l3 the
morning after - the price ten days
earlier being $8.75. And on Feb. Is
United Aircraft common sank to
$l7.62 per share. although the stock
sold for $37.38 earlier In the month.
Other aircraft securities fell in SIM
liar proportions.
The stockholders Of these companies
who continued under their ownership
throughout suffered losses Of so per
cent and more of the value Of their
property In about ten days. But some
stockholders who presumably knew
what was going to happen sold out
before the blow fell And some who
were not stockholders sold the stock
short. with knowledge of what hap
pens to a stock when the kind of news
comes out which was coming out.
Who knew and sold before the price
went DOWN. And who sold what he
didn't have In anticipation Of the de-
vastation Of aviation stock prices that
was soon to come?
The answers to these questions have
become available in part. President
Whitney Of the New York Stock ex-
change has furnished the senate
banking and currency committee, at
its request, with the names Of persons
trading In aviation stocks for the two
weeks preceding the cancellation of
the air mail contracts. Leading
long list Of well known Wall Street
names are j. p. Morgan & Co.. SELL
ing $500 shares Of United Aircraft:
Jacobson d Co., $4,000 shares Of the
same stock: Brandenburg g. Co., &c.
500 shares of Douglas Aaircraft. and
James Seligman. l2,4O0 shares Of
Curtiss- Wright, $500 Of Douglas, and
300 Of United Aircraft. Other readily
recognizable names among the sellers
were Tom Bragg. Louis Kaiser, E. A.
Pierce & Co.. Frank Vanderlip, and
Harry Content.
But 1t was not alone these financial
middlemen who beat the gun. A
number Of aviation holding companies
disposed Of great blocks of their hold
ings. The North American Aviation
corporation, National Air Transport
corporation, and Sperry corporation
sold q total Of $4,000 shares Of Cur
tiss- Wright and Douglas between
Jan. 20 and Feb. 8.
During the period when q half mil
lion shares of long stock and about
10000 shares Of short stock in the
leading aviation companies were be-
Ing sold prices held rather firm. For
each sale there Is both a buyer and a
seller. Who were the buyers? The
reports do not show this. But there
Is no great mystery about their iden-
uty. While insiders with good sources
OF information were selling stock ru-
mors were being circulated that the
government was about to approve a
large military building program. The
buyers In all probability were the small
investors, who were seeking q hedge
against initiation or who believed that
the recovery program would succeed
and that the aviation industry would
share In the new prosperity.
The financially wise knew what was
coming off and got out. Alone to
stand the loss In the greatest shock
N entire industry has ever received
was the small investor-the forgotten
man. The New Dealers had forgotten
to tell him what was going TO happen.