WAIL STREET PANICS.

Otago Daily Times, Issue 20901, 16 December 1929, Page 12

WAIL STREET PANICS.

MANY NOTABLE CRASHES. history op exchange, i,Z an lf 3 W n Cr f bea have beea a feature of Wall street experiences from oflL^ 68 !. ln itß Metory - Tbe earliest ot the most severe crashes was in 1837 1893 I r n TIm 0 *? 6 ” K 17 ’ 1873 ’ an <* troils fSf 1 ? 8 th V rash waa 80 d feas 10 days * excban S e waa closed for Btree * bas had a picturesque as well as a somewhat hectic; history (says m tbe Sun-News Pictorial). After the War of Independence, the National Government assumed control of * be ? ebts ° f the States, and issued bonds to take them up. Banka were also organised, and investments in these bonds and bank shares created a demand for investment. Out of this, speculation developed, SALES UNDER THE TREE. As a result, brokers used to meet under a buttonwood tree near 68 Wall p n r r ee L to bu y aad seH bonds and shares, ror 25 years the stock market existed thus on the Wall street kerb. The New York Stock Exchange waa organised in 1817, and the stock market developed rapidly. Railroad stock was first dealt in m 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 br °k® r .’ s office simultaneously with the making of sales, were adopted m 1867. r From the Wall street kerb the Stock Exchange flitted to the Tontine Coffee House and then to the Merchants’ Exchange, A new Stock Exchange buildmg was erected in 19025. One of tbe most serious collapses occurred in December, 1895, 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 tbe 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 3,330,695 shares. The membership of the exchange is limited to 1100 members. Vacancies occur only 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 in times of great speculative activity, and low in periods of stagnation. In 1871 a seat was worth £687. By 1885 the value had risen to £BSOO, 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 £IOO,OOO. When the exchange meets there are no calls and no formalities of any kind. Members meet on the floor of the exchange room, and those haring stock to buy or sell simply announce the fact by work of mouth. Prices fluctuate by oneeighth of I per cent., and no seller can offer stocks down more than one-eighth of a point at a time. TAPE 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 about these posts. All these transactions, too, are verbal. The brokers simply record sales on paper pads, and cqpimunicate 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 makes very searching inquiries into the financial support of any new stocks before they are allowed to be listed. The information obtained by the exchange is often much more detailed than that given to shareholders, but can always lie inspected by the public.