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New York Panic.


£80,000,000 Slump.

NEW YORK, Oct. 24.

Continuing its spectacular decline, the stock market experienced what may be the worst break in its history, when 400,000,000 dollars worth of paper pro- fits were wiped out in less than three hours' trading, which was twice the amount in the same period yesterday. The tickers were 80 minutes behind sales at 1 o'clock, and scenes of the utmost confusion reigned on the floor of the exchange, with the brokers


Wave after wave of selling mowed down prices until all the leaders crashed down through the resistance barriers. Traders mean-   time surged about the brokerage offices watch- ing their holdings wiped out. Such scenes ensued as have rarely, if ever before, been witnessed.

The situation took such a serious aspect that bankers held meetings to determine some way to stem the flood of offerings.

It is understood that the Board of Gover- nors held a meeting to discuss the advisabil- ity of temporarily closing the exchange. It was decided, however, to keep open as usual, and the governors thereupon took the floor of the Exchange and began themselves to buy, which inspired some confidence and appeared likely to turn the tide.

Meantime, rumours throughout the financial district that the exchange actually closed nearly caused a panic in some quarters, espe- cially in conjunction with similar reports re- garding Chicago and Baltimore, but these were quickly denied from all three centres. Nevertheless, Baltimore's chairman admitted that his board had considered the possibility of a temporary closing, because they had heard a report that New York was discussing it, and they would be likely to follow.


Over 5,000,000,000 dollars in market values were swept away in the greatest day in the market's history. Then some of the most powerful bankers gave support, which stopped the break. Over 11,500,000 shares were ex- changed shortly after 2 o'clock, the tickers then being nearly three hours behind ac-

tual sales.

San Francisco and Philadelphia markets   were also plunged down in sympathy. The Chicago grain market was badly hit, but rose sharply at the close, when wheat prices came back to within five cents of yesterday's close after dropping 12 cents in one of the wildest sessions in the year. At one period Decem- ber wheat dropped 11 points, March 12, and May 12. In the Omaha wheat pit not one sale was recorded, conditions in Chicago and elsewhere being too unstable for either bull or bear to take a chance.

Sales for the day totalled 12,895,650, a re- cord for all time. Sales on the curb totalled 6,337,400, also a record. The bond sale re- cord for a number of years was broken by the total sale of 24,500,000 dollars worth.


LONDON, Oct. 24.

The city editor of the "Daily Express" says: —"British losses in the New York slump are not large. British trust companies and larger investors have been selling American securi- ties for some time, and realised substantial profits, though some losses were incurred in speculating in international nickel and Bra- zilian traction. Apart from speculative losses, the slump in America will be beneficial to London. Already considerable amounts of British and French money are returning to the London market. The immediate result of the slump will be a further improvement in the value of sterling as measured in dollars, and eventually cheaper money and a reduc-

tion in the bank rate."


NEW YORK, Oct. 25.

Something of the psychological aspect of the stock market's break is reflected in numerous advertisements inserted in morning newspapers by the oldest and best established financial houses. One such advertisement reflects the attitude of all, namely: "We believe that the present conditions are favourable for advan- tageous investment to standard American


One observer, writing of the extremely dan- gerous aspect of the situation, says: "The stock markets of this country tottered on the brink of panic, as prosperous people, gone suddenly hysterical with fear, lived through a financial nightmare comparable to nothing ever before experienced on Wall-street. It rocked the financial district to its foundations, and chilled its blood with terror. In a society built largely on confidence, with real wealth expressed more or less inaccurately by pieces of paper, the entire fabric of our economic stability threatened to come toppling down."

Colonel Leonard Ayres, of Cleveland, one of the country's leading economists, com- mented: "No country but the United States could withstand such a shock, and it remains to be seen whether it did so or not."


During the financial crisis yesterday the representatives of the J. P. Morgan Company, the National City Bank, the Chase National Bank, and the Guaranty Trust Company met in Mr. Morgan's ofllces. After the con- ference Mr. Morgan's representative, Mr. Thomas W. Lamont, nonchalantly stated: "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 are no houses in difficulty, and reports as to the maintenance of margins are very satisfactory. We consider the situation on the Stock Ex- change this morning a technical one, rather than fundamental, and believe that it will result in a betterment." The market there- upon began to turn.


LONDON, Oct. 25.

The scene in Throgmorton-street, despite a downpour of rain before the closing of the Stock Exchnnge, was the most exciting since pre-war days. Heavy selling orders came from the other side, and all leading specialities broke before the wave of liquidation. Big figures changed every few seconds as the dealers offered stock, but prices rallied later, although still showing substantial falls on

the day.



The Federal Reserve Board held two meet- ings during the crash on the stock market, and received full reports from New York banks. Mr. A. W. Mellon, Secretary of the Treasury, and other officials, withheld com- ment, but it became known that they felt the break was chiefly the result of the over expansion of inflated values, due to speculative excesses, and that deflation was inevitable. The chief worry was that it might go to ex- tremes, with disastrous consequences, but that fear was somewhat allayed in the closing hour on Change, It was felt that the losses were largely "paper losses," and that the re- adjustment would not cause serious business depression. The Treasury still expects to go ahead with its reduction programme.

Various Senators commented on the situa- tion. Senator Glass said: "I will press for a 5 per cent. tax on stocks, and transfers made within 60 days. I shall also offer an amendment to the National Banking Act, and the Federal Reserve Act, seeking to restrict


Senator King said: "I will demand a thorough investigation of the Federal reserve


The Reserve Board, in its weekly report, states that brokers' loans on New York in- dicated a decline of 167,000,000 dollars to a total of 6,634,000,000 dollars. This report is only up to Tuesday night, and represents only a portion of the drop which must have occurred as a result of yesterday's and to- day's liquidation on the stock market.


Among the financial records broken to-day was the sale on the "kerb" of 1,151,000,900 shares in City Services, the "kerb's" principal stock. This is the greatest recorded turnover in any single issue on any Exchange. The stock opened at 55¾ and closed off at 7½. On the Stock Exchange American Telephones and Telegraphs opened at 273½, broke to 245, rose to 274¾, and closed at 269. Canada Dry Ginger Ale ranged between 80½ and 60, clos- ing off at 11½. Laclede Gas touched 200, and closed at 198½, with a loss for the day of 26½. United States Industrial Alcohol had a range of 34 points, closing at 176 off 25¼. Western Union rallied from 220 to 243, closing with a gain of 8.

[By special arrangement, Reuter's World Service, in addition to other special sources of information, is used for the compilation of the overseas intelligence published in this issue, and all rights therein in Australia and New Zealand are reserved.]

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