WALL STREET PANICS

Evening Post, Volume CVIII, Issue 121, 18 November 1929, Page 18

WALL STREET PANICS

MANY NOTABLE CRASHES

HISTORY OF EXCHANGE

Panics and crashes have been a feature of Wall street experiences from early times in its history. The earliest of the most severe crashes was in 1837, and there were others in 1857,. 1873, and 1893. In 1873 the crash was so disastrous that the exchange was closed for ten days.

Wall Street has had a picturesque as well as a somewhat hectic history, says a writer in the "Sun-News Pictorial." After the War of Independence, the National Government assumed control of the war debts .of the States, and issued' bonds to take/them.. up. Banks were also organised;-'and investments in these bonds and baijk shares created a demand for; inVtstment. '"'\ Out of this, speculation. .ctevelopecK „-V ;; SALES.UNDER THE TREE. . As 'a result,- brokers used, t» meet under, d, button.wooc[.;tre(3 near.6B, "Wall street.to buy-^nd sell'bpnds. arid shares. For; 25'years-;jlie stbely market existed thus-on th£';Wall street kerb.'; TheNe^y'York Btock.Exchange.was organised ifi^iSl£;-aiid'l;W stock market developed rapidly. Eailroad stock was first dealt in in 1830. The introduction of the telegraph and cable and of a national banking system expanded business enormously. Stock indicators or "tickers," by which quotations were recorded in every broker's office simultaneously with the making of sales were adopted" in 1567. From the Wall street kerb the Stock Exchange "flitted to" the Tontine Coffee House and'-then;";.fo the Merchants' Exchange. -A ne\Y%tock?'exchange. building Was erected.iii': 1903. -'] v-pne of tho.nio'st''serious collapses' occurred.in December,:vlß9s, when the New York and London exchanges were convulsed by President Cleveland's Venezuelan message to England, a clause of which seemed to threaten war between England and the.United States. Another panic occurred in May, 1901, when the Northern Pacific, corner, and panic caused a collapse in prices and established a record in selling of 3,336,----695 shares. The membership of the exchange is limited to 1100 members; Vacancies only occur by death, resignation, insolvency, or expulsion for fraud." A seat can be, transferred'by sale, and proves a very' valuable asset. Prices vary, being high iii times of great speculative activity,-and low in periods of stagnation. 1n,:i871 a seat was worth £687. %y 1885. the value had risen to £8500, but'in. the-dull >year of 1896' fell back to £3250. In 1901 and 1902 seats were sold at £20,000, but since then prices have risen enormously. Earlier this year, a.seat was sold for £100,000. When the exchange meets there are no calls and no formalities of any kind. Members meet on the floor of the exchange Toom, and those having stock to buy or sell simply announce the fact by word of mouth. Prices fluctuate 'by one-eighth of 1 per cent., and no seller can offer stocks down-njore than oneeighth of a point at'a time. V pTATE TELLS THE TALE. In-the board room are a number of posts on which the names of the more active stocks are posted, and transactions }take place aljout these posts. All ,iheß"e vtransactibpß,' to6,'are verbal.; The brokers simply' record sales on--ipaper-pads, and communicate them to their offices .by telephone. As the sales are made, prices are obtained by a large staff 'of official reporters, and are immediately recorded'on'the tape of the stock indicator^' The tape is a narrow ribbon of paper which feeds itself into the indicator. '■ After receiving the printed' impressions giving the sales and prices, the'tape falls into a basket under the machine. Thousands of these machines are located in offices and hotels throughout the city.

Securities not listed on the official exchange list are traded in on the Wall street kerb, and this business, which requires 100 brokers, is often very active.

Wall street .jaafces very searching inquiries into \.tKe. financial support of any new stocks before"they are allowed to be listed. The^nformation obtained by the exchange ii .often much more detailed than that^giyen to shareholders, but can always be inspected by the public. v V v-k; ."■■-. ■ •