"Stock, Look & Listen"

After the stock market dived to new lows at the start of last week, speculators began to take an interest in U. S. Steel shares, which could be bought as low as $86 (year's high: $126.50). But the interest was mild--and very temporary. One morning blocks of Steel began to hit the thin market like a locomotive. All day in what swiftly became a 2,400,000 share avalanche, Steel showed the way downward, sagging to $80 on sales of only 83,600 shares, and the whole list tumbled along with it, setting another low mark for 1937. The Dow-Jones industrial averages were off nearly eight points to 146.2. At one incredible moment there was not even a bid for General Motors, whose 43,500,000 shares of stock in the first six months this year earned some $2.50 apiece and whose U. S. sales in August set a record for that month. G.M. closed at $47.50 (1937 high: $70.50).

Next day while the market wavered around its low, the New York Stock Exchange, by now as puzzled as everyone else, launched an investigation into all transactions of U. S. Steel common during the previous three weeks, explaining in a questionnaire to all member firms, that it was only studying Steel as "the bellwether" of the market, not because of charges from Washington that "bear raiding" was behind the market's latest drop. Such rumors spread so swiftly, however, that the Securities & Exchange Commission dispatched a squad to Wall Street to run them down.

While other popular explanations of the week ranged from a theory that the market crack was another 1906 "rich man's panic" to the notion that it was a "capital strike" against the New Deal, one fact became increasingly clear: whether or not pessimism over fall business prospects was at the root of the market's drop, the market's drop had certainly dragged down fall business prospects.

During the six-week decline no less than $15,000,000,000 in paper values have been wiped out. And the state of paper values has a potent influence on the state of public spending. As a result, retail stores began to worry over fall sales. Estimates for fall steel production were revised from 75% of activity to 70%. New financing was postponed. And the National Association of Purchasing Agents, cagiest of all buying groups, saw fit to warn that buying should be "conservative" when there was so much uncertainty, even though there is "no real fear of a serious letdown" in fall business.

At the start of this week the market gave itself a breathing spell, the list climbed a few points back up the ladder. Meanwhile from a prime U.S. capitalist came a remark reminiscent of Andrew Mellon's famed quip early in 1929 that "gentlemen prefer bonds." Said Chairman Ernest Tener Weir of National Steel Corp.: "I think that the present situation can be made very serious unless people stock, look and listen."

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