Business: 40% Bulls & 50% Bears

One day last week while all Wall Street watched, President Roosevelt was closeted with his two chief Wall Street policemen— Chairman William 0. Douglas of the Securities & Exchange Commission and one-time Chairman Joseph P. Kennedy. Though no connection was admitted by those involved, within two days the New Deal took a step for which brokers and bankers had clamored since the stockmarket smash began over ten weeks ago. Without offering explanation, the Federal Reserve Board reduced margin requirements for stock purchases from 55% to 40%.

The 55% level was established by...

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