Yellow Cab

One of the sensational developments in the recent sharp decline in stock prices has centered about Yellow Cab.

Only a few months ago, Chicago apparently produced another miracle man of business in John Hertz, who had begun to operate bus and taxicab companies. The shares of his several cab companies were at first marketed only in Chicago, and attracted a most enthusiastic following. Fortunes in them were made overnight. In February, 1923, Hertz acquired Chicago Motor Coach, a defunct bus company. Only $5 was paid in on the common stock, yet in a few months it was selling between $115 to $120 a share, by October, 1923, at $212 a share. Such a feat has never been paralleled in the history of Chicago traction financing. Hertz stocks sold to yield less than municipal bonds. Chicago investors could not get enough of them.

Looking for other worlds to conquer, Mr. Hertz sought to obtain a "listing" for Yellow Cab on the New York Stock Exchange. But a less enthusiastic East did not seem to share Chicago's opinion of John Hertz and his companies. This Spring local speculators began to operate on the "short side" of Yellow Manufacturing, which promptly slid off from 96 to below 50. Yellow Cab fell from 85 into the 40s. Chicago Motor Coach dropped 60 points. Other Hertz companies also declined. Altogether, Hertz's stocks lost value to the extent of $30,000,000.

Now rumors arise of a "Chicago pool" which will punish the Eastern shorts for their skepticism. Wall Street speculators are beginning to talk about "Stutz" and "Piggly Wiggly" and to cross New York streets carefully to avoid being run over by Yellow Cabs.