WALL STREET BUBBLE

Greymouth Evening Star, 26 October 1929, Page 7

WALL STREET BUBBLE

BANKS AND THE BURST “A LITTLE DISTRESS SELLING” (Australian Press Assn.) (Bv Cable—Press Assn.—Copyright.) WASHINGTON, October 24.

The Federal Reserve Board held two meetings during the crash on the Stock Market, and they received full reports from the New York banks. Mr. Mellon (U.S.A. Treasurer) and other officials have withheld comment, but it became known that they felt that the break is chiefly the result of over-expansion and of inflated values, due to speculative excesses, and that deflation was inevitable. Their chief worry was that it might go to extremes, with disastrous consequences, but that fear was somewhat allayed at the closing hour of the Exchange. It was felt tbat tb.e losses were largely “paper losses,” and that the readjustment would not cause a serious business depression. The Treasury still expects to go ahead with its reduction prograinme. The Reserve Board in its weekly report on brokers’ loans in New York, has indicated a decline of 167 million dollars. This report, which is only up to Tuesday night, represents only a portion of the drop which must have occurred as the result of yesterday’s and to-day’s liquidation of the stock market.

During the financial crisis to-day, representatives of Messrs J. P. Morgan and Coy,, the National City Bank, the Chase National Bank, and the Guaranty Trust Company met at Morgans’ offices, after which Morgans’ representative, Mr. Thomas W. L. Lamont, stated nonchalantly: “There has been a little distress selling on the Stock Exchange this morning. We held a meeting of financial institutions to discuss the situation. We found that there have been no houses in difficulty and the reports as to the maintenance of the margin were very satisfactory. We consider the situation of the Exchange this morning a technical one, rather than fundamental, and we believe that it will result in betterment.”

Thereupon, the market began to urn.

DAY’S RECORD SALES

NEY YORK, October 24.

The Stock Market sales for to-day totalled 12,595,650 shares. This is a record for all time. The sales of shares on the kerb totalled 6,337,400. This also is an alltime record.

In bond sales the record for a number of years was also broken by a total sale of 24,500,000 dollars worth.

WORKING ALL NIGHT

NEW YORK, October 24.

Wall Street, which normally is as silent and as deserted at night, as the Trinity Church graveyard which faces it, was alive with workers and ablaze with light to-night. - In every brokerage office the word had gone forth that every employee from the junior partner to the switchboard girls must be prepared to work all night, so that the tangled affairs of the financial sector, resulting from the busiest day’s trading in the history of the street, might' be set in order before the beginning of another day on the Stock Exchange.

TO CHECK SPECULATION

NEW YORK, October 24.

Various Senators commented on the situation. Senator Glass said that he will press for a five per cent, tax on stock transfers made within sixty days. He also said that he will offer an amendment to the National Banking Act and the Federal Reserve Act, seeking to restrict speculation. Senator King said that he will demand a thorough investigation of the system.

EFFECTS IN LONDON LONDON, October 24. The scene at Thfiogmorton Street, during a downpour of rain, after the closing of the Stock Exchange, was the most exciting since before the war. Heavy selling orders came from the other side, and all of the leading specialities broke before a wave of liquidation at big figures, and they changed every few seconds as the dealers offered the stock. Prices rallied later, albeit they were showing substantial falls on the day.

POSITION MORE STABILISED.

(Received October 26, Midday). NEW YORK, October 25.

Powerful banking support stabilised the stock market to-day, closing quotations disclosing fairly moderate gains on losses in the leading issues. Trading was approximately half the volume of that on Thursday.

Chicago wheat prices rebounded sharply at the opening when the steady tone of early stock sales induced heavy buying, also reports from the Liverpool and Buenos Aires markets which favoured buying. Wheat closed, December’ 1213 cents, March 1293, May 132 g.

CANADIAN RECOVERY.

VANCOUVER, October 25.

Winnipeg messages state that despite tremendous liquidation to-day, wheat closed more than a cent higher, after the early losses of six cents, with the largest export trade in the season’s crop on Thursday’s.