Montana labor news., 1937-09-30
Market Break Caused
By Insiders seeking Big
Profits, Say SEC Experts
BY HENRY ION
Federated Press

eQSIdleu ASoo
Observation-Disclosures
by large corporations and brokerage
houses to replenish their supply of
stocks are probably the basis for the
recent decline in stock market prices,
according to experts in the Securi-
ties and Exchange Commission here.
For the past month, prices have
been jumpy, breaking sharply
Among the $4,000 employees of
brokerage houses in Wall Street
there is a near panic, according to
reports, with wages being cut dras-
tically and the fear of dismissal
haunting many. Organizers working
there report that fear of the bread
line has employees cowed.
The furor, say the experts, is only
partially justified by economic con-
ditions and is probably due to the
efforts of insiders to build up their
supplies of stock, depleted by the
prevailing high prices of the first
months of this year.
The boom of April, 1885, caught
large number of them without suf-
ficient stock in hand to reap the
reward they felt was possible. AS
a result they were forced to go into
the market and buy at high prices,
thus curtailing their profits. Feel
ing that the stock market is due for
still further rises because of the
prospect of war profits the insiders
do not inetnd to get caught short of
stock again.
Another factor in the present stock
market break, according to SEC OBJ
servers, is the coming 1888 elections
and the prospects of doing damage
to the Roosevelt political fortunes.
Starting in the middle of 1886 the
stock market began to rise and pros
perity, seemingly, was here. Many
fair weather friends rode along with
Roosevelt figuring it was impossible
to beat him with a rising stock mar
ket. In 1888 congressional elections,
it is thought, declining stock mar
ket can do much to cause fair
weather friends to turn tail and de-
sert the bandwagon.
For 1888 it may be possible to fix
declining stock market, the experts
say, whereas it was not possible in
1886. In the election year produc-
ton figures showed up favcrably in
contrast with production figures of
previous months and years. This
year production figures will slacken
off due to the reaching of a rela-
lively stable level of consumption.
Index figures of the SEC show
that some members of the stock ex-
change have been quietly letting go
of their stock within recent months
Brokers are told to sell at certain
points and to buy when the stock
recedes to a predetermined level
Manipulators then sit back, twid-
ding their thumbs, and wait for the
decline.
After stock prices begin to decline
as a result of the selling, manipu-
lators then make show of support
ing the market, of refusing to sell
America Short" and buy at the low
prices. In such fashion they become
great patriots and net themselves a
neat profit.
SEC experts warn, however, that
certainty as to the cause Of the stock
market break is impossible and that
what may appear to be a maneuver
on the part of insiders to recoup
their stock and at the same time
take a whack at Roosevelt whom
they dislike intensely because of the
SEC, may turn out to be definite
downward trend in the stock market
cycle.
The best guess is, according to the
SEC people, that present turmoil in
Wall Street is the result Of profit
seeking by a small clique. That
thousands of clerks and little fell
lows get squeezed in the process is
a matter of small Importance.