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Show MONEY & MARKETS By James McMullin Til. Teleqr.m't Eiclufiv. Obnrv.e Along Wall Sl'.t NEW YORK More than half a dozen big timers of industry and finance visited President Roose--elt at Hyde Park last week at the president's own request. Besides such White House standby! as Joe Kennedy and W. Ave rill Harriman, the list of callers Included other outstanding ' leaders who have not attacked the new deal openly notably Gerard Swop, of General Electric and James H. Perkins of the National City Bank. The visitors returned to New York walking on air. and have since been assuring associates privately pri-vately that everything is going to be all right. The president received re-ceived them cordially and talked to them in friendly terms. They got the Impression that he la in earnest about balancing the federal fed-eral budget and that he is not seriously averse to tax revision along the lines advocated by business busi-ness chiefs. But other top flight New Yorkers are still from Missouri. Mis-souri. They recall too many agreeable agree-able White House conversations from 1933 to '35 which raised high ""Sopes buried nowhere. The stock market slump entered Its serious phase about the middle of August. A recheck of circumstances circum-stances when it began shows no sign of a business decline to account ac-count for the sudden outburst of selling which the market couldn't digest. Everything pointed to continuance of a strong recovery trend. Somebody struck a sour not. which didn't make sense at the time, but which threw the whole orchestra off key in the -course of a few weeks. Who did it? Analysis of market mar-ket action the last two weeks in August sheds revealing light Almost Al-most every day during that period the London stock market five hours ahead of New York sagged lower, setting a bad example. Almost Al-most every day there was an ac-cumlation ac-cumlation of selling orders at the New York opening which set the tone for the trading period. As we have noted before, substantial orders on either the buy or sell side at the opening usually indicate indi-cate European trading. It looks as if Europe pulled the plug. Once the piug had been pulled, many additional factors accelerated acceler-ated the drop. The thinness of the market exaggerated the effect of a relatively small volume of selling. sell-ing. Furthermore, there was no strong buying to offset it. "Smart money" stayed on the sidelines. By Labor day. a business reaction re-action had definitely set in. Frightened Investors started dumping and the vicious spiral of margin calls began to get in Its deadly work. The point is that probably none of this would have happened if influences outside the United States hadn't touched it off. It is only fair to add that Europe was having an attack of war jitters jit-ters in late August, though London Lon-don scoffed at war scare talk in New York a little later. Reports have been circulated that anti-new dealers deliberately pushed the market off the deep end in order to discredit the Roosevelt administration. Evidence Evi-dence Is lacking to support th. charge, except the negative evidence evi-dence of an absence of buying support. sup-port. This abstinence was inspired in-spired by prudence rather than vindictiveness. It Li true that there was a good del of "inside" selling during the summer. Most of it traced to a vague uneasiness about the business busi-ness outlook. But these transactions, transac-tions, when large, were handled "over the counter" not through: the stock exchange and did not disturb th. market at all. It is also true that Wall Street relishes th. idea that the slump ! has put th. new deal on a spot. But th. boys haven't yet reached th. stag, where they would deliberately de-liberately cut their own throats to spit. th. Washington head. (Copyright. 1937. for The Telegram) |