In 1880 Prince & Whitely, Manhattan brokers, opened a branch office in the old Hotel Willard, Washington, D. C., engaged the first private wire from the Capitol to Manhattan. On July 2, 1881, this wire was used to flash word of President James A. Garfield's assassination, giving Prince & Whitely clients an advantageous time margin in the market shock which followed. At that time the firm was three years old. Since then it has survived many a severe depression including at least six actual stockmarket panics. Last week it failed. Almost coincidentally a "New Economic Theory" seemed to sweep the emotions of volatile stock-traders. Though few Wall streeters have ever read Oswald Spengler's Der Untergang des Abendlandcs, it was easy for them to imagine a world in the grip of conditions more awful and appalling than ever before. Prices will never go up again; the world will seethe in war and revolt; all mankind is doomed to a steadily decreasing standard of living until poverty, per-haps starvation, is the rule of life—such talk made spice for bear-food last week.
Since early September stockmarket prices had declined steadily. When the week opened, commentators were already comparing prices with the panic lows of Nov. 13, 1929. Steel drew near to $150 (its 1929 high was $261¾). On Thursday, Stock Exchange President Richard I. Whitney, who on Oct. 24, 1929 had temporarily reversed the market by bidding $205 for Steel when it was at $190, this time was willing to bid the market-price $150. At this figure 25,000 shares were sold in a single $3,000,000 transaction, but even indirect evidence that J. P. Morgan & Co. was buying failed to halt the decline. When Mr. Whitney was obliged to announce the Prince & Whitely failure from the floor of the exchange, many a blue-chip sank below its 1929 bottom. Traders noted these prices:
Low Nov. 13, 1929 Low Oct. 10, 1930
Allied Chemical & Dye 197 200
American Can 86 112¼
American & Foreign Power... 51 37⅝
American Tel. & Tel 197¼ 192¾
Anaconda 70 34¾
Baltimore & Ohio 105* 84 1/2
Consolidated Gas 80¼ 94
E. I. du Pont 90 97⅝
General Electric 168⅛ 52¾
General Motors 36⅛ 35½
Gillette Safety Razor 80 35⅝
International Tel. & Tel 53 25⅛
Kennecott 49⅜ 27
Montgomery Ward 49¼ 21⅝
New York Central 160 139
Pennsylvania 74 64⅞
Radio 28 21½
Standard Oil of N. J 50 55⅛
Texas Corp 50 42⅛
Union Carbide & Carbon 59 61
U. S. Steel 150 144½
Westinghouse Electric 102⅝109¾
Woolworth 52¼ 59⅜
Much of the selling was of course directly attributable to the failure of Prince & Whitely. Liquidation was especially violent in stocks in which Prince & Whitely were supposed to have an interest: Atlas Stores, Brockway Motor Truck, Hahn Department Stores, Kelvinator Corp., National Dairy Products. On the curb, Prince & Whitely Trading Corp. dropped from $7.50 to $.50 before rallying. Brokers pointed to the fact that J. A. Sisto & Co. which failed fortnight ago (TIME. Oct. 13) had had an investment trust, that both Sisto financial and Prince & Whitely trading had been formed near the peak of last year's bull market.