Dullness & Horseplay

The great exchanges of the U. S. last week lacked natural stimulants. On the Chicago Board of Trade the energy building grains, limited not only to 4-c- and 5-c- daily fluctuations, but also forbidden (by a rule good until Aug. 15) to fall below their July 31 closing levels, floundered ineffectually. September wheat meandered between a top of $1.02 and the stated minimum, 92 1/8-c-. September corn wandered between 57-c- and its stated minimum, 49 3/8-c-. September pig bellies swelled up occasionally to $7 but flopped back on their minimum, $6.50. From similar listlessness, begotten partly by regulation, Manhattan's Stock Exchange was saved by outside stimulants. Following pricking of the speculative bubble three weeks ago, the Senate's busy Prosecutor Ferdinand Pecora called on Exchange President Whitney, told him speculation must be curbed. Last week the Exchange announced two new rules: 1) brokers must report weekly to the Exchange all that they know of the operations of pools and syndicates; 2) traders with debit balances of over $5,000 must maintain margins equal to 30% of the debit balance; those with debit balances less than $5,000 must maintain a margin equal to 50% of the debit balance. Calculated in the ordinary way--the proportion of a trader's equity to the total value of the stocks in his account--the margins now required amount to 23% and 33%. Example: If a man buys $1,500 worth of stock and gives his broker $500 he is said to have put up a 33% margin. However his debit balance is $1,000, of which $500 is 50%, adequate margin under the new Exchange rules. With speculative enthusiasm dulled by these rules, brokers amused themselves with a 1933 version of an ancient game of hazing new members--by a swindle in distillery shares. To Leland H. Ross Jr., new floor broker for Marshall, Campbell & Co., they gave an order to buy 5,000 shares of OWS (Owens Distillery). Guilelessly ignorant that no such firm existed, he asked directions to the post where it was traded, rushed to execute his order. On the quotation board the "last sale" of OWS was duly recorded at 14. New Broker Ross asked the OWS "specialist" to quote it. "14-15" (14 offer, 15 bid), said the broker. "Take it!" cried another broker over Ross's shoulder. Broker Ross asked for another quotation. Another broker snapped up that offering. Broker Ross found a dozen experienced brokers eagerly bidding against him, snatching up the stock under his nose. At each sale the price mounted. Trying desperately to fill his order he shouted hurriedly at the same time as another broker, had to flip a coin, according to custom, to see who got the purchase. By a sleight-of-hand he lost the toss, bid up & up. finally got the stock at 38, trembling to think what Marshall, Campbell's customer --doubtless watching the tape, seeing OWS sold again and again at higher prices --would say at such bad execution of his order. As Broker Ross backed away, in rushed New Broker Anthony McKin of G. H. Walker & Co. with an order to sell 1,000 shares of OWS. Last sale stood on the board at 38, but as he offered his stock the other brokers bid the price down as fast as it had risen. He did not succeed in selling till the price was down to 23. Then oldsters, laughing at the novices, tore off their collars, poured water in their pockets, completed the initiation.

Next day brokers had a new diversion not of their designing. Trading was very dull. In the first two hours such notable stocks as Allied Chemical, Delaware & Hudson. J. C. Penney, Norfolk & Western had not even been sold. At seven minutes after noon a broker looked up and saw smoke near the ceiling of the high trading room. Rapidly it descended, filling the room. The alert vice president of the Exchange rang the bell to stop trading. At 12:10 brokers, abandoning orders and order books, fled to the street, weeping into their handkerchiefs. In brokerage houses the lazy ticker quietly ceased ticking. Police surrounded the Exchange and kept the gathering crowd at a distance.

"An ammonia pipe in the air cooling system burst," was the rumor that started. Policemen in gas masks entered the building to investigate, found not leaking pipes but two empty tear gas bombs lying at the intake of the ventilating system on the fifth floor.

First believing the "bombing" was a joke, police traced the gas bombs to a Cleveland maker, thence to an Iver Johnson sporting goods store in Boston. Soon they arrested in Manhattan one Eugene Sanger Daniell Jr.. 28-year-old Boston lawyer, graduate of Harvard, member of Battery A of Massachusetts' famed 101st Field Artillery (recently in training at Camp Devens). Founder of a pseudoradical party, he a year ago gained notoriety by leaving a fake bomb on the doorstep of Mayor Curley of Boston. Police heard that he had planned to get "spectacular publicity" in New York, but in eight hours' questioning they drew no admission from him, had to hold him "on suspicion of malicious mischief"--a felony if damage done is more than $300. No final bid & asked quotations were available for publication because brokers had fled the Exchange. Only once before in history had Stock Exchange trading been so suddenly, unceremoniously halted : at noon of Sept. 16, 1920 when 1,000 lb. of TNT were exploded at the Wall Street front of J. P. Morgan & Co. Other closings of the New York Stock Exchange: March 11, 1888--the great blizzard. July 31, 1914--the World War. June 5, 1917--registration for the draft. Jan. 28, Feb. 4 & 26, 1918--heatless days by order of U. S. Fuel Administrator. Nov. 7, 1918--false Armistice. Nov. 11, 1918--Armistice. Jan. 7, 1919--burial of Theodore Roosevelt. Sept. 10, 1921--Pershing's return from France. Aug. 2, 1921--a small fire in the building. Aug. 3, 1923--death of Warren G. Harding. Feb. 6, 1924--funeral of Woodrow Wilson. Jan. 24, 1925--total eclipse of the sun. June 13, 1927--return of Lindbergh. Oct. 31 to Nov. 30, 1929--closed Saturdays during the market crash. March 11, 1930--funeral of William Howard Taft. March 5, 1933--bank holiday.

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