Wall Street 1929 Part 11
The desire to make money is not limited to minds trained in making it. The easier money can be made, and the more quickly, the better it attracts the public. Just now the most fabulous money-making machine in the country seems to be the stock market; so the public has enthusiastically gone shopping there.
Savings banks have been not a little alarmed by this migration. Money that once remained in their vaults, soberly gathering 3 1/2 and 4 per cent interest, has now gone adventuring among common stocks, where dividends may be just expectancy, but where the greatest lure is the chance of selling out at twenty points profit. More than a billion dollars of deposits flowed out of the country’s national banks during the last fiscal year, and the authorities ascribed the withdrawals to investment and speculation by the middle class.
Down on the lower East Side, where the residents recognize no international problems save Grover Whalen’s minor incursions with patrol, the stock market has opened a new door to El Dorado. There are push cart peddlers who appoint an agent, chip in $15 or $20 each, and buy two or three shares of General Motors or U. S. Steel. Dividends are rigidly split, and the profits of sale divided perhaps ten ways.
A New York publisher, who made millions by getting in on the ground floor of America’s self-discovered concern with sex, seems to have tapped another latent reservoir of desire by bringing out a daily tabloid devoted exclusively to financial news. Its price is three times that of any other afternoon newspaper. But its circulation is booming.
For months, a morning tabloid, the New York Daily News, has been featuring a financial writer whose function is avowedly that of tipster. He. has made the stock market as colorful—more so—as the race track. He is its Walter Winchell.
“Dupont is a corker . . . there’s at least 40 points in it if bought at the market.—Stick with the Standards of N. Y. and N. J. . . . For a high-flyer, Eastman Kodak can’t be surpassed. . . . Natural Dairy Products are about ready to go …
“Buy Montgomery Ward and reap a substantial profit by August 26. . . . The Market Goose hangs high as Brokers’ Loans dip. . . . U; S. Freight is to have a swirl upward. . . . The rails never looked better. . . . Don’t so to bed tonight without having some American and Foreign Power in your strong box. …”
And so on, day after day. Not being concerned with such things, I have never attempted to calculate the success of this anonymous artist. Some experts who have followed him say his predictions have averaged 6 per cent correct. Others fix the percentage considerably lower. But all of them agree he has been immeasurably assisted by the great Bull Market. Within the past three months—May 27 to August 27—100 representative industrial and railroad stocks have risen on an average of $28 per share, according to the New York Herald Tribune’s recapitulator.
When the market sagged in the face of his bullishness, the tipster saw in it a good portent—”a corrective reaction,” which he likened to a dose of castor oil. His rival newspaper writers simply smiled. They are wondering how he will fare when he must try to pick winners in a falling market.
Source: The Outlook, 18 September 1929
Related posts:
- Wall Street 1929 Part 9
- Wall Street 1929 Part 3
- Wall Street 1929 Part 10
- Wall Street 1929 Part 8
- Wall Street 1929 Part 12
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