Evening star., 1934-05-02
MARKET COLLAPSE
PUT AT 15O BILLION
PettengiII, Arguing for Bill,
Estimates Liquidation at
$91,729,OOO,0OO
BY the Associated Press.

By the Associated Press.
Urging enactment of the stock
market regulation bill, Representa-
tive Pettengill Oemocrat), of In
diana, today told the House that be-
between 1929 and 1882 the liquidation
of stocks, bonds and brokers' loans
on the New York Stock Exchange to-
tailed $91, ,729, 100000, or more than
three times the national debt.
Pettengill, a member of the Inter-
state Commerce Committee that re-
drafted the legislation, said in his
prepared speech that the market col
lapse probably cost between $780,
0OO,O00,OO0 and $200,0O00,0O0,OOO al
together.
Prom September, 1929, to June
1882. the market value of bonds listed
on the New York Stock Exchange
alone deprecated S9,387 900 ,OO0," he
said. Brokers loans fell off $780,
100000 and the value of stocks on
that exchange vanished to the tune
of $74,O34, ,O00, ,OOO"
Richard Whitney, president of the
New York exchange, today tossed a
charge of propaganda" at Ferdinand
Pecora, counsel of the Senate Investi-
eating Committee.
Whitney made his accusation just
after the committee turned out a new
mass of figures to show how a flood
of credit swept down Wall street on
the boom tide.
The survey, containing answers to
questionnaires submitted to 80 of the
Nations largest banks, showed that
on July l. 1929, these institutions had
out brokers loans totaling $4,700 ,000,-
900.
Figures Called Misleading.
Whitney hit anew at publication by
the committee yesterday of figures
showing profits in seven figures by
Wall street insiders and exchange
member firms. In a first statement
he asserted these figures were gross
ly misleading Later he said:
THE Stock Exchange has been ac-
cused Of using propaganda to defeat
the pending legislation for the regu-
lation OF exchanges. This is not true.
The Stock Exchange is prepared to
prove every statement it has made
about the Fletcher -Rayburn bill.
Real propaganda consists of pub
fishing at timely moment informa-
tion capable of influencing or pref
udicing public opinion. That is pre-
cisely what Mr. Pecora did when he
submitted to the Senate Committee
figures in regard to the earnings of
the New York Stock Exchange firms. "
Legislation Speeded Up.
1t was generally conceded, as the
House moved closer to a vote on the
Fletcher-Rayburn bill, that the legis-
lation had been given impetus by dis
closure Of the heights to which brok-
ers' profits ran during the speculative
era.
The new statistics, showing how bill
lions of dollars were absorbed from
the channels of business and COM
merce by Wall Street speculation in
the boom days, were generally calcu-
lated to have similar effect.
The 33 institutions, in addition to
the S4,700,000,000 of street loans" to
brokerage houses, were shown to have
had total of more than $4,000 ,0OO,-
900 loaned out on security on July 81
1929. More than S2,000,00 900 of this
was secured by stocks and bonds.
Banks Write Of Loans.
While the losses from loans to
brokers were comparatively slight. the
banks were forced to write off from
January l, 1929, to September Is
1888, more than quarter of a billion
dollars loaned on these securities.
The survey thus provided for the
first time an indication of the strain
suffered by the national banking sys-
tenn as a result Of the collapse in
security prices.
Pecora said two features of the en-
tire survey would bear particularly
on the question of legislation.
One was data showing about 60 per
cent of the customers dealing with
New York Stock Exchange member
firms traded on a cash basis, and the
other was disclosure by the member
firms that they and their partners
had participated in more than zoo
pools during the less than six-year
period covered by the QUESTIONABLE.
The former, Pecora contended, re-
futed the contention of those who
claimed strict regulation of margins
would result in deflation of the mar
ket. He maintained the second point
answered the argument of exchange
officials that pool operations were
beyond their control, because they
were chiefly the work of outsiders.