From the Washington Post of October 30, 1929:
>>Dizzy Stock Plunge Halts as Strong Interests Buy; Klein, On Radio, Reassures
6,410,000-Share Market Shatters All Trading Records on Street
Support Announced By Morgan Partner
Orderly Market Held Aim of Banking Group Aid by T.W. Lamont
Big Corporations Start Purchasing
Midafternoon Rally Cuts Some Losses and Credit Stress Is Eased
The Associated Press
October 30, 1929
New York, Oct. 29 (AP) -- Huge barriers of buying orders, hastily erected by powerful financial interests, finally checked the most frantic stampede of selling yet experienced by the securities markets and which threatened at times today to bring about an utter collapse in prices.
All trading records were broken with a turnover of 16,410,000 shares on the New York Stock Exchange and 7,096,300
shares on the New York Curb Market. This contrast with the previous records of 12,894,000 and 6,148,300 shares,
respectively, established last Thursday, and a stock exchange turnover of 9,212,600 shares yesterday.
Extreme declines in the active issues ranged from $10 to $70 a share, but many of these were cut in half in the rally which
started in mid-afternoon and continued through to the close.
Morgan Partner Makes Statement
Thomas W. Lamont, senior partner of J.P. Morgan & Co., announced after a second conference of bankers had been held
tonight, that leading New York bankers were supporting the market in a cooperative way and would continue to support it.
"It was not an attempt of the group," he said, "to maintain prices but to maintain a free market for securities in good order."
Unofficially, it was ascertained that large corporations, including U.S. Steel, had stepped into the market today to purchase
stock for their employees' stock purchase plans, as well as for their investment accounts, and that these purchases had been
supplemented by the buying of wealthy capitalists for their individual accounts. Rumors that the banking group was a seller of
stock were denied.
Supporting Orders Come In
Bankers, who had hurriedly called into conference last night and again at noon today, apparently stood aside at the opening as
blocks of 10,000 to 80,000 shares were thrown into the market for whatever price they would bring. When this initial flood of
selling had spent itself, supporting orders began to make their appearance, not with the intention of completely checking the
streams of selling but with the avowed object of regulating their flow.
Several times during the day, particularly in the early afternoon and again toward the close, it looked as though a fresh
collapse in prices, bringing ruin in its wake, was inevitable, but each time the holes were plugged and the threatened disaster
was averted.
Despite the fact that prices of probably half of the thousand stocks listed on the exchange have been cut in half, or more,
during the recent decline, and that the aggregate decline in quoted values of all securities from the high levels of the year
exceeds 25 billion dollars, only one casualty has developed among brokerage houses thus far. Suspension of the New York
Curb Exchange firm of John J. Bell & Co., for failure to meet its obligations, was announced shortly after the market opened.
Inasmuch as this firm was not engaged in a general commission business, the failure had no serious consequences.
Extra Dividends Declared.
Directors of the United States Steel Corporation and the American Co., supplementing the efforts of bankers to restore
confidence, which has been badly shaken by the recent crash in prices, today declared extra dividends of $1 each on their
common stocks, in addition to the regular quarterly payments. These special disbursements were made possible by the huge
earnings piled up by these corporations in the wave of general prosperity earlier in the year.
The United States Steel Corporation, directors of which met after the close of the market, reported earnings for the first nine
months of $15.92 a share. The corporation, which arranged earlier in the year for the retirement of its funded debt through the
sale of additional common stock, has been paying regular annual dividends of $7 per share on the common.
Albert Conway, head of the New York State Insurance Department, after a conference with the heads of leading insurance
companies, said he had recommended to them the purchases of leading common stocks by such companies. Fire, marine and
casualty insurance concerns, as well as surety companies, may buy common shares under the common statutes.
Seek Way to Enter Market
Conway said the life insurance executives had offered to meet with him tomorrow to determine whether there was any way in
which they could make purchases under the existing law.
The New York Stock Exchange, with a record that dates back more than 100 years, has never witnessed such tumultuous
trading as took place at the opening of today's market...
Deluge of Selling
Scores of other issues opened with blocks of 5,000 to 10,000 shares. This deluge of selling carried total sales in the first half
hour to 3,289,000 shares.
Easing of credit conditions was one of the first measures put into effect by bankers to calm the wave of hysteria which has
suddenly swept over security holders. The call money renewal rate, ordinarily announced about 10:40 a.m., was fixed at 5 per
cent, a drop of 1 per cent below yesterday's figure, before the market opened. Time money and bankers' acceptance rates
were then lowered in sympathy.
After the midday meeting of bankers, it was announced that leading banking firms of New York had reduced the margin
requirements on street demand loans to 25 percent, thereby releasing a huge volume of credit to facilitate the financial
operations of stock market firms during the market crisis. Some of these requirements previously ran as high as 40 percent.
F.B. Keech & Co., one of the large commission houses, also announced a reduction in the margin requirements demanded of
its customers to 25 per cent on the theory that current price levels were sufficiently attractive to warrant such action.
Forced Liquidation Blamed
Wall Street attributed the dumping of huge blocks of stocks at the opening to forced liquidation by large operators, who were
no longer able to protect their rapidly dwindling accounts after having amassed paper profits running into hundreds of millions
of dollars. Few of these operators, regarded as the leaders of the recent "bull" market, escaped totally unscathed, as most of
them continued to hold long lines of stocks for investment and the sustained decline of the past week took them completely by
surprise. Sizable fortunes have been amassed by a few traders on the "short" side, but these are only a drop in the bucket
compared to the losses sustained by stock market "bulls."
Exchange Governor's Statement
Governors of the New York Stock Exchange met this evening and issued the following statement through Richard Whitney,
vice president of the exchange:
"The meeting considered carefully the present situation but felt no action was necessary and adjourned to its regular meeting
tomorrow afternoon."
Proposals had been made by stock exchange members earlier in the day that the regular session be shortened tomorrow, or
that a holiday be declared on Monday, the day preceding election day, in order to give harassed brokers an opportunity to
catch up with the vast accumulation of work that has piled up in the last week. Inasmuch as the exchange is closed next
Tuesday, a legal holiday, brokers pointed out that a Monday closing would give a three-day respite from business, but
opposition to this action developed on the theory that closing the exchange during the current crisis might be misinterpreted.
Bank Stocks on Toboggan
Spectacular declines also took place in the stocks of leading New York banks today as those securities were dumped
overboard with listed issues. First National Bank stock dropped $1,200 a share, being quoted at $5,400 bid and $5,600
offered. George F. Baker, veteran chairman of the board, is reported to hold 22,000 shares so that the overnight shrinkage in
the market value of his holdings alone was $26,400,000... The break in the market already has forced the alternation or
postponement of financial programs of municipalities and industrial, public utility and railroad corporations, and cause the
abandonment or delay in the consummation of several mergers underway before the reaction started.
New York Withholds Bond Offer
The City of New York today announced the indefinite postponement of the sale of $60,000,000 of 50-year 4 per cent bonds
scheduled tomorrow. A special meeting of directors of the Cities Service Co., was called for tomorrow, presumably to
purchase additional common stock at $45 a share. When the offer was made a couple of weeks ago, Cities Service common
was sailing above $60 a share, reaching a high of $68.12 and a half, but it broke to $20 a share in today's market. Total sales
of Cities Service on the curb today was more than 1,000,000 shares.
Many of the declines on the curb assumed fantastic proportions, although a large number of the losses were reduced by a rally
in the late trading Standard Oil of Ohio was a feature, dropping 30 and one quarter points. High-priced utilities, specialties
and industrials on the curb showed enormous losses at the lowest prices...
Investment Trusts Down
Many of the investment trusts went for only a fraction of the prices at which they were offered late in the summer. Blue Ridge
convertible preferred was a conspicuous example, closing at $16.12 in contrast to its offering price of $51.50. The loss for
the day was $14.87.
The bond market, which had been advancing for more than three weeks under the favorable influence of easing time money
rates, felt the tremendous selling pressure brought to bear on other security markets. Gilt-edged issues were dumped in some
volume, together with bonds of less investment merit. United States Government issues showed steadiness and there was
heavy trading in Liberty bonds.
The Federal Reserve Bank was said to be buying the Government securities as a means of releasing funds in the money
market.
¸ Copyright 1929 The Associated Press
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