Transcript: Excerpts from the New York Times of 1929 - 1932 Thom quoted on 01 October 2008
Thom compared the crash of 1929 and the subsequent Republican Great Depression with current events and actions by Congress, quoting from many articles from the New York Times at the time.
Excerpts from the New York Times of 1929 - 1932 which Thom quoted on 01 October 2008
These excerpts are all from the New York Times from around the time of the stock market crash and the subsequent great depression. Most New York Times stories were dated the day before the date of publication.
- October 24 1929 was black Thursday
- October 25 1929 was a Friday
- October 26 1929 was a Saturday
- October 26 1929 Topics In Wall Street (91977635).
- October 27 1929 was a Sunday
- October 27 1929 Debacle Inevitable, Wall Street Now Says (91981966).
- October 27 1929 No Need for Alarm in Stock Shake-up (91982306).
- October 27 1929 Sloan Calls Crash On Market 'Healthy' (91981362).
- October 27 1929 Topics In Wall Street (91981993).
- October 27 1929 Stock Clerks Get Bonus (91981991).
- October 27 1929 Republicans Glum On Tariff Outlook (91981325).
- October 28 1929 was black Monday
- October 29 1929 was black Tuesday
- October 30 1929 was a Wednesday
- October 31 1929 was a Thursday
- October 31 1929 Expects Business to Lag (94200345).
- October 31 1929 Topics In Wall Street (94200768).
- October 31 1929 Big Drop Expected In Brokers' Loans (94200784).
- October 08 1931 Real Estate Men On The Hoover Plan (96920574).
- October 18 1931 Californians See Hoover (96209181).
- December 22 1931 Hoover Reassured by Senate Leaders (118430934).
- December 24 1931 Mellon Endorses $500,000,000 Fund (96209181).
- December 25 1931 Refuse Syracuse Pay Cut (98350859).
- July 07, 1932 Compromise Moves Fail (98350859).
- July 10, 1932 Relief Bill Passed By Senate, 43 To 31; Hoover Veto Ready (106030070).
DEBACLE INEVITABLE, WALL STREET NOW SAYS
Markets Grossly Overbought, Consensus of Economists, Bankers and Brokers.
ALL ARE OPTIMISTIC AGAIN
Speculator and Margin Trader Hope to Recoup--Outsiders Less Responsive.
BROKERS' LOANS AWAITED
Large Contraction in Borrowings Is Expected--Business Prospects as Factor in Break.
Wall Street is allowing its imagination full rein in explaining the recent débâcle on the security exchanges, but the substance of all opinions, as boiled down yesterday, was that the break was precipitated by the market's most obvious weakness: a grossly overbought condition.
Bankers, brokers and economists are all agreed that the market went on the rocks for a brief period because speculation for the rise had been carried beyond all limits of safety. In taking stock yesterday of the week's events, the financial community was unanimous in its conviction that the market had been "overbulled" for a long period. Last week's convulsion, it also was agreed, was the inevitable culmination of the unparalleled speculative excesses.
NO NEED FOR ALARM IN STOCK SHAKE-UP
Conference Board Gives Data to Prove Business Sound and Gaining.
TRADE AND 'CHANGE APART
Commodity Prices and Industry Have Been Stable in Comparison With Securities.
Business men should not take undue alarm at the recent shake-up in the stock market, in the light of data compiled by the National Industrial Conference Board and contained in a statement issued yesterday to THE TIMES. No known factor in the field of industrial enterprise gives warrant for the violent fluctuations experienced in the stock market during the past week, or the past year, it says. The total flow of business activity in the United States, on the contrary, has been stable and on the increase. The statement continues:
"It may be true that in many instances stocks have been carried to too high levels. It certainly is true that the fluctuations of many stocks during 1928 and 1929 in either direction, up or down, have not been warranted by fluctuations in business prosperity during that period.
"The closing average price of stocks on Thursday of last week, as reflected in the index of fifty representative stocks, was not the low for the current year, despite the violent decline and unprecedented volume of trading. Irrespective of where the support originated, the financial world proved its power to avert a panic which has its roots in speculative activity.
Once Had More Influence
"Stock speculation in the past, by virtue of the psychological effect of such manipulations, had more power to influence business sentiment. But the much improved and perfected organization of modern businesses, through the increased use of conference between business leaders and more accurate, prompt and vastly better cooridnated [sic] sources of statistical information, has greatly restricted the power of speculators in securities to harm business stability and progress."
"The slump on Wall Street is a healthy thing," said Alfred P. Sloan, president of General Motors, just before sailing for home on the Mauretania this morning. "It had to come sooner or later and it is better over."
The Mauretania carried a number of other American business men who had made hurried last-minute reservations in consequence of Thursday's Stock Exchange crash.
Mr. Sloan was frank to declare that he did not regard the slump as a catastrophe.
"There can be no doubt that the market has been too high in certain things," he said. "Now everybody will get to work instead of cherishing the idea that it is possible to get rich overnight by speculation. I think, however, that it has been a little drastic, but when the pendulum once begins to swing it usually goes too far in either one direction or the other."
Normal trading conditions were completely restored on the Stock Exchange yesterday and Wall Street breathed easier. Not only were transactions of average Saturday proportions but the market seemed to have lost its nervousness. Stocks fluctuated within a rather narrow range, some continuing the recovery started Thursday afternoon and others losing ground. There were only a few striking price changes. Further evidence was seen of cautious investment buying, but on the whole the market exhibited an uncertain tone, with a fairly long list of net declines. Brokerage houses again counseled their customers against unwise liquidations, at the same time emphasizing the advantages of remaining "close to shore."
The TIMES's averages last Thursday showed that the loss since Sept. 19 had been 23 5/8 per cent. This compares with about 10 per cent loss in the three separate reactions of last March, last December and June of 1928, and exceeds the 21 1/4 per cent decline between the middle of February and the end of March, 1926.
Old Records Broken.
Every old stock market record went by the board last week and an entire new set has been set up for future markets to shoot at.
Opening New Accounts.
Before the worst part of last week's break was over new accounts were being opened in considerable numbers in all of the large brokerage houses. This suggested to brokers that it probably will not be long before those speculators who were wiped out in the late debacle will be replaced by a fresh crop. At one of the leading commission houses fifty new accounts were opened on Friday. Some of these new customers had dabbled in the market before, but most of them admitted they were preparing to take their first flier.
New Business Alignments.
It is expect that, when the débris is all finally swept up some of the firms will take in new partners, that there will be some consolidations and possibly some new partnerships.
A bonus of a week's extra salary will be paid by the Stock Exchange firm of J. F. Trounstine & Co. to its clerks, in recognition of extra work resulting from Thursday's record market and the active trading of Friday and yesterday.
Many employes [sic] of Stock Exchange firms have worked until the early hours of the morning during the last few days to keep their books up to date. Instead of returning to their homes, these employes have been sleeping in downtown hotels. Most Stock Exchange houses reward their employes for extra work with bonuses, but these usually are distributed at the end of the year.
Some old and threadbare economic theories were dusted off yesterday in Wall Street by persons seeking to account for the unprecedented decline in the security markets during the week. Even the theory of the business cycle, which has received little attention by economists since the recession of 1920, was advanced as a possible explanation of the present break. In general, however, few authorities could be found who placed much faith in the old belief that business activity ebbed and flowed with a constant rhythm. Several authorities indicated, however, that they believed that a moderate recession of business activity might be expected as a result of the break in the stock market.
One enterprising Broadway house went to the trouble yesterday of preparing a formidable list of "depression-proof stocks." This list, which will be announced to the firm's customers, will contain a group of stocks which reasonably may be expected to weather any storm on the Stock Exchange. It was asserted that more stocks than the public realized had stood up under the bombardment of Thursday and earlier in the week.
The other points were that the break of Thursday had been preceded by speculation unequaled in history, and that when the critical day had arrived it had been physically impossible for bidders to come forward in volume sufficient to cope with the selling.
REPUBLICANS GLUM ON TARIFF OUTLOOK.
Regulars Fear Further Cuts in Industrial Rates, With Bill Failing in Session.
SENATE ON FIRST SCHEDULE
Gillett Motion to Raise Duty on Artists' Paints Loses. 52 to 19--
Nine Other Items Acted On.
The Smoot-Hawley tariff bill was in a precarious position this afternoon when the Senate, after a week's work on the chemical duties, laid the measure aside until Monday. Little enthusiasm for the bill as it now stands was apparent in any quarter, and doubt was expressed whether it could be sent to conference by Dec. 2 when the special session must end.
Progressive Republicans seemed more interested than any others in keeping the bill before the Senate, hoping that they can rewrite the rates to bring agriculture closer to a parity with industry.
The drastic readjustment which has taken place in stock market quotations will augment current business hesitation, according to Gage P. Wright, an article by whom is printed in the current issue of the Business Economic Digest. No major industrial recession is likely, however, he believes.
"The condition of general business during the last fortnight has not been marked by any substantial change in developments considered of fundamental importance," Mr. Wright says. "Nevertheless, the current hesitation which has been noted in many lines of business will undoubtedly be considerably augmented by the drastic readjustment now taking place in the stock market. Authorities do not anticipate that this unfavorable influence on business will usher in a period of severe business liquidation, but it does appear quite probable that we may expect the hesitation in business to proceed further. This would result in a further moderate retardation of activity."
Sweeping recovery occurred all through the security markets yesterday. Active banking support, the fact that the biggest men of the country stood ready and willing to put their shoulders to the wheel to right what had developed into a tragic and precarious situation, brought a rally that was characterized by robust vigor. About the highest levels of the day were held and stocks closed with a strong tone. The fact that the market had finally rallied itself, after three days of black terror, led to the general conclusion in Wall Street last night that the storm had been weathered and that the real worth of stocks, as measured by their dividends, earning capacity and prospects, would guide fluctuations in the immediate future, rather than hysterical scrambling to "get out". Gains of 2 to 25 1/2 points were established all along the line yesterday on the Stock Exchange and on the Curb. The leaders of the recovery were United States Steel, Allied Chemical and Dye, American Can, General Electric, General Motors, International Telegraph and Telephone, American Telegraph and Telephone and Montgomery Ward.
Public statements by the country's biggest and most influential men that the fundamentals of the country are entirely sound, and that stocks at present levels have reached a point where buying for investment is warranted, probably aided the situation as much as any other single factor. These men not only talked; they bought stocks. The authorized statement that John D. Rockefeller and his son were buying stocks synchronized closely with the day's sharpest upturn and attracted the more attention because of the rare occasions on which Mr. Rockefeller has permitted direct quotation, and never before on stock market affairs.
Selling Out Accounts.
The biggest crash in the history of the stock markets is likely to leave a long trail of disputes, arguments and possibly lawsuits over accounts that were sold out at the lowest prices on Monday and Tuesday.
Odd-Lot Buying for Cash.
One of the most constructive developments of yesterday was the tremendous amount of odd-lot buying for cash. Practically all of this stock was paid for outright and taken out of the market. It represented an overnight change in sentiment of great importance to the market and was construed as recognition of the fact that many stocks, in the wild scramble to sell, had been depressed to too low levels. Many a strong box was replenished with securities yesterday at levels that now look attractive.
BIG DROP EXPECTED IN BROKERS' LOANS.
Today's Federal Reserve Report Likely to Show $1,000,000,000 Decline, Wall Street Hears.
REDISCOUNT RATE CUT SEEN
Reduction to 5 Per Cent This Afternoon Believed Likely--General Easing of Credit Predicted.
As a result of the terrific slash in security prices to the accompaniment of record-breaking turnovers, bankers are expecting a reduction in brokers' loans to be announced this afternoon, which will far exceed any hitherto recorded.
In meeting the crisis on the Stock Exchange, local banks have had the full cooperation of the Federal Reserve, which has been steadily pumping credit into the market during the last few days by the wholesale purchase of Government securities.
In the last week there has been heavy calling of loans by corporations and wealthy individuals listed in the group "of others." In part this calling of loans has been inspired by a desire to take advantage of the bargain-counter prices for securities on the New York Stock Exchange. In part, however, it has been the result of a sudden realization that it is not always safe for non-banking institutions to usurp the function of banks.
In large part, however, the liberal attitude shown by the Reserve in building up its portfolio through purchases of government securities has supplied the market with its needed funds.
Skepticism as to President Hoover's plan to liquidate frozen bank assets was expressed yesterday by Charles G. Edwards, president of the Real Estate Securities Exchange, the only mart of its kind in the country. The exchange deals almost exclusively in real estate bonds, of which it is estimated that $1,500,000,000 at par value are in default throughout the country.
The constructive value of the Hoover proposals was stressed by other prominent real estate men here yesterday. Much depends upon the details of how the plan will operate, they declared.
Improvement in business conditions is necessary before real estate can improve, in the opinion of Lawrence B. Elliman, president of Pease & Elliman.
The Hoover plan will relieve the general situation immediately, or at least stop the "downward plunge," according to Douglas L. Elliman, president of Douglas L. Elliman & Co.
"The plan is undoubtedly a step in the right direction," Douglas L. Elliman said. "It is bound to ease the situation everywhere. Psychologically it will do much more good."
The system will make it possible for the Federal Reserve Bank to issue acceptance notes against sound real estate securities, thus stabilizing their values. Real estate mortgages are commonly regarded in banking as frozen assets. The Hoover plan seeks to take these substantial investments from the frozen asset class and give them a recognized value."
Rolland A. Vandergrift of Sacramento, Cal., Director of Finance of that State, headed a delegation which called on the President today relative to tax problems. The President told them, according to Mr. Vandergrift, that he was convinced that real estate and agriculture must be relieved of their tax burdens to bring about economic recovery.
MELLON ENDORSES $500,000,000 FUND.
He Urges on Congress Immediate Adoption of Reconstruction Finance Bill.
WOULD QUALIFY RAIL TERMS
Favorable Report on $100,000,000 More Capital for Land Banks Expected When Congress Reassembles.
Special to The New York Times.
Secretary Mellon has written a letter to Senator Norbeck, Republican, of South Dakota, chairman of the Banking and Currency Committee, endorsing the plan for the $500,000,000 Reconstruction Finance Corporation which President Hoover has asked Congress to create as part of his program for economic relief.
Senator Walcott, Republican, of Connecticut, chairman of the subcommittee which has charge of the bill, stated tonight that Mr. Mellon had urged immediate adoption of the proposal. He would not make the text of the letter public. Secretary Mellon was quoted as saying:
"The mere existence of such an instrumentality furnished with adequate resources and enabled to deal with any weakness that may develop in our credit structure should have a reassuring effect on public confidence and be a stimulating influence on the resumption of the normal flow if credit into channels of trade and commerce."
Favorable Land Bank Bill.
A favorable report to the Senate on a bill to increase the capitalization of Federal Land Banks by $100,000,000 or more is expected when Congress reassembles after the holiday recess as the result of consideration of this subject today by another subcommittee of the Senate Banking and Currency Committee headed by Senator Carey, Republican, of Wyoming.
The Senate bill is expected to differ from that passed by the House by making the authorized increase in capital $125,000,000 instead of $100,000,000.
Chester Gray, representing the American Farm Bureau Federation, testified in favor of a $100,000,000 increase in land bank capitalization but opposed a moratorium of five years on farm debts.
A third project to come before the Banking and Currency Committee will be a bill introduced in the closing hour of last night's session by Senator La Follette, asking a $5,500,000,000 prosperity bond issue for public works.
HOOVER REASSURED BY SENATE LEADERS.
Committeemen of Both Parties, in White House Talk, Promise to Speed Economic Program.
ACTION BY JAN. 4 FORECAST
Conferees Expect Chamber Will Then Take Up Land Bank and Finance Board Measures.
BILL DRAFTING DISCUSSED
President Stresses His Interest In General Principles and Need to Push Restoring of Business.
In a last-minute effort to expedite Senate action on his economic program, President Hoover called to the White House this morning leaders of both parties in the Senate and pressed on them the need of prompt action on the debt postponement, the Federal Land Bank and the Reconstruction Finance Corporation, the three major items in his plan for the restoration of normal business conditions.
"The President called these Senators into conference to urge upon them the necessity of the most expeditious action on his economic legislative program," Mr. Newton stated.
Syracuse police today "respectfully declined" to accept Mayor Rolland B. Marvin's proposal for a 10 per cent voluntary reduction in salary of city employes [sic]. The Mayor told them he gave them until 2 P. M. Saturday to change their mind. If they did not, he said, "then I'll act." The Mayor did not indicate today what his action may be if the police stand is unchanged.
The policemen's committee, waiting upon the Mayor, cited recent utterances of President Hoover against wage cuts in support of their stand. They said: "We are acting in behalf of 30,000 members of the New York State Police Conference."
COMPROMISE MOVES FAIL
Hoover Assails Lending to Any One on Any 'Conceivable Security.'
WARNS THAT VETO WAITS
Finance Corporation Would Be a 'Gigantic Banking and Pawnbroking Business,' He Says.
GARNER CHEERED IN HOUSE
Democrats Hail His Demand for Extension of Aid to Others than Banks or Railroads.
Speaker Garner took the floor of the House to receive an ovation from the Democrats when he asked their support in what he termed a battle against "class legislation" desired by the President.
The President objected to the provision in the bill, insisted upon by the Speaker, which widens the basis of loans to be made by the Reconstruction Finance Corporation, and later in a statement of his position declared unequivocally that he would not agree to the policy of lending money "to individuals, private corporations, partnerships, States and municipalities on any conceivable kind of security for every purpose".
The measure would make the Reconstruction Corporation "the most gigantic banking and pawnbroking business in all history," the President asserted.
President Blames Garner.
President Hoover in his statement laid the blame for the failure of the meetings last night and this morning on Speaker Garner, terming the Speaker's insistence on his point "the fatal difficulty" of the proceedings.
Democrats Get The Support Of Fourteen Republicans For Conference Report.
PRESIDENT IS CRITICIZED
Johnson Charges His Stand On Private Loans Has Shifted--
Borah Backs Measure.
COMPROMISE IS PLANNED
Quick Passage With Adjournment This Week Hoped For By Leaders--
Garner's Backing Indicated.
New difficulties loom, however, in a threat from Representative La Guardia to lead a House movement to vote for direct relief of $300,000,000 more than is in the present bill if the administration forces new action, and to limit the Reconstruction Finance Corporation loans to new projects and "not only for dead bonds."
Supported by fourteen Republican votes, the conference report on the Garner-Wagner $2,100,000,000 relief bill was adopted in the Senate today and Congressional action on the measure was thus completed. The vote was 43 to 31.
The bill will be sent to the President Monday for a veto, which will admittedly be sustained. The President's message of disapproval has already been completed.
Wagner Quotes Hoover Message.
By arrangement, Senator Norbeck began the Senate debate by introducing the conferees' report. He explained briefly the provisions of the compromise bill, including $300,000,000 for loans by the Reconstruction Finance Corporation to States for immediate relief work; appropriation of $322,000,000 for roads and public works and Reconstruction Finance Corporation loans of $1,500,000,000 to States, municipalities, public and private corporations and individuals on proper security, for the advancement of employment.
The breach between Democrats in Congress and Mr. Hoover resulted from the last of these three sections, drawn by Speaker Garner and opposed by the President on the ground that it "makes the Reconstruction Corporation the most gigantic banking and pawnbroking business in all history."
Senator Wagner opened fire on this contention, quoting Mr. Hoover's annual message to Congress last December as recommending that the Reconstruction Corporation be authorized to advance loans to "established industries" which could not otherwise obtain credit. Mr. Wagner continued:
"More recently, when the President issued his denunciation of the Garner bill because of its so-called 'pork-barrel' features, there was not a suggestion of objection to loans to private industries."
Johnson Criticizes the President.
Later Mr. Johnson declared that this relief bill was designed to help "the forgotten man," an allusion that brought to mind Franklin D. Roosevelt's declarations.
Transcribed by Sue Nethercott.