PANIC IS AVERTED ON STOCK MARKET AS BANKERS ACT TO HALT DECLINES #

Leading Issues Swept Down in Avalanche of Selling Volume of Sales Hits All-time Record. #

BANKERS IN CONFERENCE AS DECLINE CONTINUES #

Mitchell, Wiggin, Potter and Others Gather at Offices of J.P. Morgan–Report of Exchange Closing Denied–Situation Becomes Acute in Afernoon.i #

By the Associated Press #

NEW YORK, October 24–A stock market panic appeared to have been checked early this afternoon as leading bankers issued reassurances, and prices of many leading stocks, after declining $10 to $40 a share, rebounded sharply.

United States Steel common, after dropping $9.50 a share to $194.50, more than regained its loss, selling at 1:30 p.m. at $206. Johns Manville, which had dropped $40 to $140, jumped to $175. American Telephone, after turmbling $21 to $251, snapped back to $268.

Total sales on the new York Stock Exchange up to 1:30 p.m. were 10,171,900 shares, breaking all records, and comparing with a turnover of 8,246,740 shares for the full session of the previoius day, March 26 last.

Livermore Buying Stocks. #

Jesse L. Livermore colorful stock operator, who is reported to have made and lost several fortunes, told newspaper men that he had been a heavy buyer of stocks all during the morning. Mr. Livermore has of late years been obscured by the huge market operations of such men as Arthur W. Cutten of Chicago and William C. Durant, but his name has been prominently mentioned in Wall Street gossip during the recent severe “bear” drive. Mr. Livermore, however, denied that he had headed a “bear” pool.

The situation became so acute by early afternoon that a report was sent out over private wires that the stock market would be closed at 1 o’clock, but this was later denied by the New York Stock Exchange, which announced just before 1 o’clock that no call had been issued for a meeting of the board of governors to take action.

Bankers continued to congregate at the low, formidable-appearing, gray-stone offices of J.P. Morgan & Co., at the corner of Broad and Wall streets, directly across the street from the Stock Exchange. W.C. Potter, president of the Guaranty Trust Co., soon joined the group. The bankers assembled represented the heads of the largest public and private banking institutions in the United States, and had under their supervision resources totaling many billions.

Brokerage Houses Crowded. #

Customers’ rooms of brokerage houses were crowded with pale and harassed faces. In contrast to the shrieking traders on the exchange floor, these men were ominously silent. A few were confidently placing huge orders to buy, while many more were frantically placing orders to sell.

During the early afternoon, the ticker quotations were an hour and 20 minutes behind floor transaction, and desperate efforts were made by commission house customers’ men to get quotations from the floor. Members clerks on the floor were driven to desperation in a vain endeavor to supply information and handle the deluge of orders.

Many commission houses were reported to have dumped weakened marginal accounts overboard right and left without waiting for responses to calls for more margin. Hundreds of leading stocks were swept down to the lowest levels in more than a year. Many issues lost from 5 to 50 per cent of their quoted values in a few hours.

Bankers’ Action Reassuring. #

The announcement of the meeting of leading bankers in the early afternoon appeared for a moment to have checked the decline, and a few issues rallied a little from their previous low levels. United States Steel, after touching $195 a share, in contrast to the year’s high of $261.75, sold soon after 1 o’clock at $199.

Thomas W. Lamont emerged from the bankers’ conference at the office of J.P. Morgan & Co. early this afternoon and announced that in so far as the bankers had been able to learn, no financial houses were in difficulty.

“So far as we can find, there are no houses in financial difficulty and reports from brokerage houses indicate that the margin position is satisfactory,” said Mr. Lamount.

He added that the concensus of the conference had been that many quotations “did not set forth the situation fairly because of the numerous air pockets found in many stocks where there were not many bids.”

Asked whether he thought the Federal Reserve Board would take any action, Mr. Lamont replied that he did not know, but thought there might be “some consideration given.”

Trading during the first half hour totaled 1,676,300 shares, a new high record for the period, and at the rate of more than 16,700,000 shares a day. The record turnover was established on March 26, when approximately 8,200,000 shares were traded.

Financial news tickers flashed unofficial reports from Washington during the midmorning stating that Treasury officials do not consider that the terrific fluctuations in stock prices in any way reflect business conditions, adding that profits from business are still large and increasing regularly.

Many Accounts Unloaded. #

Much of the selling represented the unloading of marginal accounts weakened in yesterday’s drastic decline, the sharpest in recent years. Brokerage house margin clerks, in many instances, worked until early hours this morning sending out calls for more funds. On the other hand, many large traders and investors felt that stocks had reached bargain levels, and many who had sold the market short covered the commitments which supplied the market with large buying orders. Commission houses, however, were inclined to advise customers to proceed with great caution until the present price levels are thoroughly tested.