THE STOCK MARKET DEBACLE
The Stock Market Debac "In The Long Run We Are All Dead" By A. Fabian WEBSTER, in Us famous debate with Hayne, began with reference to the mariner, wbo, having been teased upon...
...The grafter is practically unknown and graft is not an issue in electoral contests...
...It was contended that new methods of doing business, particularly hand to mouth buying and co-ordination between production and actual orders, removed the possibility of a recession in business, to say nothing of a possible depression...
...Whatever the prospects st 1 market from daily contact eg its machinery, experience b aj swering hundreds of let ten, u observation of the investors' pa ecology, the writer must sett ft not buy stocks on margin, ffyj have only a few thousand falsi do not buy common stocks aft for it is cold comfort to Issri gl they will eventually corns back 1 was the famous English •eases* John Maynard Kevnea who nab to someone who used th* jar* "in the long run"—"In tht SJ run, we are all dead...
...Untfi the aessaseS of capital for '--rman\ tsL up, stocks that are actuaay aa| valued will not advaam rssu for in a very real sense, satota many and doners are HtmJx aaj of new stock offerings nfg 2 en the recovery...
...The'G...
...True, Mr...
...The full significance of the above figures can be gleaned only by a knowledge of the fact that in the campaign of last year a Negro was also the Republican nominee, but no unusual effort was made then to elect him...
...Hence much time must be spent by the opposing party in raking over the mess...
...One suggestion made by President Hoover in his Armistice Day address invites special attctftjon...
...We have no doubt that this suggestion will be widely discussed but even if it is finally accepted and embodied in some, agreement of the powers it would not be an adequate guarantee.1 No agreements are certain of being kept once war starts for war itself is a reversion to lunacy...
...Government ownership of fail roads is better than railroad ownership of goveraaeont—Eugene V. Debs...
...Can we measure up to the demands made upon us by the 175,000 citizens who voted our ticket...
...The fanners have been, content to accept little sops from the tariff barrel while the powerful industrial magnates have waxed fat and arrogant...
...In the campaign just ended, the total vote cast was 70,015 or approximately 37,000 less than a year ago and divided as follows: Democrats 39,909, Republicans 26,471, Socialists 3,635...
...Was tt not possible to estimate that a. mail order concern would in 19S5 have gross sales of a billion dollars and net profits on the present stock of $40 a share...
...If the suggestion of President Hoover is worked out tothe satisfaction of...
...It seems that due to this we cannot get away from these districts and therefore yeer after year we are spending our good money in them...
...This young man's nomination was the signal for the launching of one of the keenest fought, most spirited political battles in the history of this segregated section of New York City...
...f The Row in the G. O. P. THE Republican Party appears to be shaken with an old disease that seized other parties in the past...
...The fate of every member of a capitalist community today depends less and less upon his own individuality, and more and more upon a thousand circumstances that are wholly beyond bis control...
...Recently, numerous stocks sold at 20 to 40 times the annual earnings, and were acquired at prices at which the dividend return was lees than 2 per cent per annum—this, at a time when the obligations of these corporations yielded par cent to 4% per cent But, according to the "new era" philosophy, ecenmonstocks were to be preferred...
...By Including turnover profits, .and in many instances, unrealized market appreciation on securities still held in the portfolio, the impression was created that investment trusts can double and treble their invested capital in a year or less...
...So God's Own Party has a family quarrel...
...One of the hideous phases of the .World War was'that so many children and aged people died of starvation in those countries where food became scarce...
...The only Borough that has some sort ¦ of the county organization s the Bronx...
...John Rusk in...
...This would mean two things...
...This seems to bs an opportune time tb take a mental inventory...
...This was on the assumption that the American corporations were following conservative financial policies, that continued growth in earnings was assured, and that if enrreat prices seem high hi comparison with current earnings or dividends, earnings in ths next two or three years would more than Justify these quotations...
...Allegheny, Shenandoah, United Corporation— these were not corporations engaged In business, but to thousands became something, to buy and sell, without inquiry into the very a b $ of their character, business, records and prospects...
...Considering the wide havoc wrought by the recent crash and the comparative absence of suicide reports there is reason Hor believing that news of Sclfdestruction by losers has been withheld...
...Negro boys ranging in years from seven to eleven were to be seen nightly on Harlem's busy streets making their faint Juvenile appeal for the support of Delany in particular and the "party" Of Lincoln and Douglas" in general...
...How much that organization Is responsible for the work done in the Bronx I do not know, but I do know this, that every other Borough that has some sort of a neglected...
...I am not going to discuss here, our shortcomings, for to do that would be wasting space and time, however, I do want to stress some important items relative to party activities and propaganda 1. There is a> growing demand among the younger element in the party for a reorganization in the leadership...
...They are sincere in their view but they do not understand that it is precisely because Socialists have a definite aim and philosophy that they are clean in office...
...If organized labor, both politically and industrially, bad been prepared to devote the same enthusiasm and make the same sacrifices to making the world worth living in as it did* in the war, it would have brought a new world.—Fred Bramley...
...respect for facts —ss bail cannot debate and aajS'saSaiJ unwisdom of a pokey...
...Only here and there can we find a sprinkling of them...
...New that the campaign is over the next Job is to organise as many as possible into party service, continue to undermine the rotten props of the Hall, and to gather a still greater army for the assault in the next election...
...The "jackasses" are sulking...
...The old class struggle between Eastern capitalism and western agrarianism is on and the job now is to soothe the farmers and bring them into the old alliance in the hope of another decade of skinning...
...As Socialists they should hecome active in these organizations and in that way spread the truth about the party, so as to counteract the lies spread about us by the politicians of the two dominant political parties...
...In the same way, no one can explain why the Florida boom did not collapse six months or a year earlier than it did...
...jB A liberal policy oa th* page the Federal reservb bsuta^sn tend to stimulate busts***, SmB meantime, weak snoculahaa «a tions win be Uquidataa...
...The heavier the losses and the more numerous the losers it is logical to expect more than the normal number of suicides...
...They think that they have accomplished all that can be accomplished if they keep the swindler out of office...
...The vast majority of our members take no interest in their Union activity with the result is that the Socialist trade unions cannot be found...
...JOSEPH TUVTM...
...The causes enumerated below were operating as long ago as the latter part of 1927...
...the Republican candidate over 29,000 less while the Socialist candidate received only 415 votes less...
...President, but wbo is getting the fruits...
...The scrap between powerful eastern capitalists and western farmers over the tariff is an underlying issue...
...They want something new...
...The story, except in its extent,^and in the number drawn into the net, is not a new one...
...As a discerning economist remarked, stocks were discounting, not the next year's prospects, but the millennium £—Uninformed Speculation "Making money in Wall Street...
...when they were quotsd^snma...
...Bktfiaaja, K. Y...
...When Senator Mosee referred to the West as the region of "Jackasses'* hep robably was thinking of the big majorities cast for Harding, Coolidge and Hoover...
...Why should not the law of averages hold good now ? IN A NUTSHELL In, his Thanksgiving Day proclamation President Hoover declares that "The fruits of industry have been unexampled in quantity and value...
...Ws have a good finance committee and I believe that they should immediately devise ways and means of raising such funds...
...etntt of corporations in genera] si make a poor rrrmparlsin fffM last quarter of 1938...
...Although industrial conditions do not Justify the picture which has been drawn by apologists for the present state of things, business activity has been heavy...
...Their idea is a clean administration of power, not a program of measures mat aim at a definite ideal of what a city should be...
...Karl Kautsky...
...I know that every suggestion made costs money...
...Moses referred to the western Senators as the sons of "jackasses...
...Because of the, continuous advance in the pricea of standard- stocks beginning in 1921-32," Interrupted only by minor set-backs...
...The collapse bad g as real basts, and those wbaatstl a quick recovery and whs sab up pretty fairy tales to tht ess that ths break was dot to a as splracy, should bs shunned, aa nomic illiteracy in lew sal ftjj quarters, greed, end ths tana* tion to gamble, under tat ratal buying stocks for permeatst a vestment aggravated by ttabss in a prosperity which sever ess ed, and a woeful lack of beat ship in banking circles, ersahtl present situation...
...Negro preachers of every denomination abandoned their usual role of defining with minutest detail the topography of heaven and hell for the equally familiar theme that "the Republican Party brought us over the bridge...
...The churches opened wide their doors to Mr...
...the income would be 4 par cent, which under, normal credit conditions, ts a fair return from the equities of the strongest business enterprises, whose accounting methods rarery disclose the full earnings...
...What ef the Negro...
...John H. McCooey, private • citizen of Brooklyn, will appoint the successor to District...
...Were we to stop and consider that these districts are things of the past insofar as elections are concerned, we would then stop our foolishness and do some real organization work where it is so needed Published election returns show us vividly that districts like the second, ninth, sixteenth, eighteenth and twenty-second in Kings, the upper West Side in Manhattan and a few more places in the City should be worked 5. Candidates for office should at once be chosen in our promising districts...
...earnings were 15 a shesa «gt looked upon dc^btXnJrrgJhssbll price is $80 and tbereiq^gj legs $350...
...Their vision is limited to sweeping out the rats but beyond that they have no plans for the house...
...Delany and his supporters...
...This is that food ships in time of war shall be considered the same as hospital ships and be exempt from capture...
...niaTsJ policy temporarily sets ssVan in forty-eight beexa...
...S—Earnings and Dividends It used to be regarded as axiomatic that a stock of a sound corporation with reasonably good prospects, and in a good financial position, wee worth approximately ten UmeS the annual earnings per share...
...One had only to buy Municipal Consolidated Gas and Electric tduay and sell It next week, or the following day at a profit—and the profit on the sum "invested" was not much greater when the stock was bought on a "conservative" marginal basts...
...We have an over-abundance of writers and thinkers in our movement yet we have no literature...
...With victory crowning our efforts in this respect, we immediately and with vigor plunged into the campaign, speaking to larger and more enthusiastic audiences and receiving more liberal contributions at each succeeding meeting, until on election night we saw registered in votes the fruits of the campaign of Socialist education we had waged against great odda The vote cast in the 21st district for Norman - Thomas was increased manifold over his previous vote as was the vote received by our local comrades, yet it is the Congressional vote which tells a most interesting story...
...The growth was of a progressive nature In September, for example, total financing waa $1,614,000,000, of which investment trusts and kindred issues were fully $643,000,000, or approximately 40 per cent of the total...
...Delany...
...For this reason parties begin and end their struggles by a continuous presentation of programs...
...Aside from the decision of the Public Service Commission In Massachusetts, in which the application or a public utility company to split up its stock was turned down, no specific event can be pointed to as the immediate occasion for the beginning of the hysterical selling and price dwindling...
...It is easy to understand a wave of selling which follows closely on a disaster in the financial world, or a collapse in business activity...
...In practically every such clean up in the past it has been followed by suicides...
...Finances There should bs a drive started immediately to raise money...
...The Stock Market Debac "In The Long Run We Are All Dead" By A. Fabian WEBSTER, in Us famous debate with Hayne, began with reference to the mariner, wbo, having been teased upon the anguished seas for a number of days, uses the first appearance of the sun to take his bearings...
...Hoover's Suggestion NORMAL human beings of all political and economic beliefs, except those who have a vested interest in war and armaments, welcome any proposal that will help to avoid another bloody world struggle...
...4. The party In the last several years has spent thousands of dollars where we had some time elected assemblymen or aldermen...
...There all parties are able to concentrate on issues and programs because even the conservative and liberal parties of capitalism are clean in these matters...
...The Communist Party made a new record in the New York City election by polling less votes than the jazz candidate, Enright The thunder on the left still roars...
...Negro Democrats became strangely silent with regard their own Congressional candidate (he was a white man...
...Yet*if Such ar*-agreement makes it easier to scale down i that will be a gain that is worth while...
...The Letter Box Editor, The New Leader: The vote received by the party and its candidates recently surely shows a revival of the long dormant Socialist spirit Whether the membership will take advantage of this awakening will be seen by their activities within the next few months...
...You knock a man into the ditch, and then tell him to remain content in the "position in which Providence has placed him...
...As a matter of fact in 1929 they assumed such importance that other issues became almost unsaleable...
...What did Municipal Consolidated Gas and Electric earn...
...When our independent friends realize this they will be interested in a better house as well as destroying the rats...
...Unfortunately, gambling became to certain prophets and economists, or rather, professors of economics...
...Their administration of power is accompanied with graft and chicane...
...Farmers have been nursing their wounds and when the two ivory domes rubbed salt into them the row started...
...9. We need a strong Yipsel movement That has been lacking insofar as the City organization is concerned...
...It efcb found that inventories wenyssH low as believed, i nismiidsy mm will fall, the defects of bat bet financing will become stars ana...
...It was contended that investment In bonds or preferred stocks or in other security in Which prospective appreciation is limited, was a mistake, and that good common stocks might be bought without regard to prices...
...Grundy spoke of the West as a region of "backward states" and proposed that their representation in the Senate be reduced...
...Why they did not become perfective in June or December, 1928, or earlier this year, is not determinable...
...8. Literature is badly needed, that of the new kind...
...That a great mapy of our members would be sent tb weak I branches and in that wa£ Strengthen them and also revive the spirit of the few workers in them and second it would take away active members from dead districts...
...For nearly ten years the, fanners have been going through another period of skinning by their allies but they took their medicine and voted for Harding, Coolidge and Hoover...
...ent In all probability,'tht hej ness recession will contsan kg the early part of IMfe, Bnj prices will rally from tans tekm but it is by no means carta* a* the averages will not be sjaajjJ spring...
...7. In many labor organizations there have always been active members to the party...
...The political problem of mankind is to combine three things: Economic efficiency, social Justice, and individual liberty.—John Maynard Keynes...
...I would transfer any member who belongs to a branch outside of his district sad place him into the branch where he rightfully belongs...
...It is facing western antagonism...
...Even Bruce Barton transformed Christ into -a vulgar go-getter...
...The Turning Tide By Frank R. Crosswaith "Truth though crushed to earth wfll rise again" is a truism which through the agee has served as n sustaining thought to men and woman embracing new Ideals end nurturing new hopes of a well ordered world Seekers after Justice whether of a political, social or economic nature have ever drank deep and full of the knowledge that "if your cause is Just, then win you must...
...Stocks that saaaSs-a...
...When the idea of the city organization was proposed, I favored it very strongly, but I have since realized that the City office cannot properly give its attention to County work...
...It has held good id the past...
...toted us out of the land of slavery into the promised land of freedom...
...Tammany is going to undertake a holy crusade up state to win that region for the fat boys of the ¦Hall...
...This query was the beginning of all conversation...
...2. I believe that we ought to go back to County organizations once again...
...It has been stated, time and time again by this element that if we had young men as our leaders that greater activity would be shown...
...Contrast 'this with the situation in England...
...The unprecedented collapse of stock prices and the convulsive changes wrought in the past two weeks have been followed by at least a partial restoration of confidence...
...The average citizen does not care to read the old stuff of years ago...
...With their usual heat, these men of God warned the brothers and sisters "not to turn their backs upon those who in pain and travail had successfully...
...This year a drive was also made to induce a larger number of Negro voters to register, with the result that approximately 25,000 more Negroes qualified this year to vote for Delany...
...It is time that those who do the work of the party should outline this work...
...Enthusiasm la H"l^ In Negro Harlem, as elsewhere, interest in the message of SocialIsm reached new heights...
...These comrades should be put before the voters of the respective vicinities at every possible chance so that all may take an active part in the work necessary and will be known better when the actual campaign begins...
...Dues in the holy order have been fixed from $4 to $500 per year, the easy chair holders being let in on tab second class, while Smith and Roosevelt will carry the banner of the faithful up the Hudson...
...O. P. nobles in the Senate are split into two factions...
...One reason advanced by advocates of a big navy, and it has special force in England which is an island whose population depends upon freedom of sea traffic, is that naval armaments are required to insure that an enemy power will not cut ©ff the food supply...
...This was repeated, and as the tales spread, the gambling instinct in most of us could not be contained...
...Shall we answer their call with organization, or will the timorous pessimists in our movement be permitted once more to smother beneath a blanket of defeatism the flames of interest in our program which Norman Thomas rekindled by his remarkable campaign...
...Something like a revolution appears to be taking place in the Republican Party," reads a dispatch to the New York Times by its Washington correspondent...
...Capitalism has degraded everything it has touched—art, journalism, politics and so on...
...They voted for Norman Thomas but they do not like the idea of supporting a definite aim and philosophy...
...In economic matters it is often difficult to distinguish between an effect and a cause...
...The stocks of leading corporations, exceptionally strong in their respective trades, and with large treasury resou.— > might be worth as much as fifteen times the per share earnings...
...The Record of Votes " In 1928 the total vote cast for Congressional candidates in this district was 106,652 divided as follows: Democrats 56,992, Republicans 45,610, Socialists 4,050...
...Our Degraded Polities TfOW degraded the pofibes of capitalism in -*-¦** this country has become is evident from one unponaat fact Much of the time of a Labor or Socialist party must be unwittingly devoted to showing how indecent and mercenary the ruling parties are...
...Now isn't it kind of John to take over a public function...
...The party membership with very few exceptions have paid no attention to them...
...It would have the further advantage of making the civilian population more immune from starvation...
...6. For a long time there has been a sentiment among Socialists not to take active part in the various fraternal, civic and church organizations that they may belong to...
...Denied an opportunity to speak on the streets by the local police—Delany"s campaign was being made in the churches, lodges and other fraternal organizations—we first had to fight for the right to be heard...
...There is enough to be gotten providing we show some activity...
...Several letters by independent voters that have appeared in the press since the recent election represent this point of view...
...Something that strikes the point and does not dwell upon theories and dogmas...
...Masses of fanners turned Granger or Populist for a time but they generally came back to the G. O. P. alliance with a little coaxing...
...the powers it would spike one big gun of the big navy men...
...Attorney Dodd and will also kindly appoint a member of the City sanitary Commission...
...The investment trust movement In this country dates back less than ten years, and did not become of great magnitude before 1926...
...What dividend was being paid...
...Moreover, it would leave all nations on a basis of equality in the matter of food supply in time of war...
...Wall Street Tragedies ONE phase of the storm in the gambling, joint in Wall Street is the subject of cunent gossip...
...In January to September, the total amount of investment trust offerings aggregated 12,240,000,000, or more than 23 per cent of the offerings of all types of securities...
...Negro newspapers with a unanimity seldom seen In the United States exhorted their readers to support, financially and otherwise, the candidacy of Mr...
...During the campaign and especially the last few weeks, there was a feeling in the active party workers' minds that if we had the organization of 1917, also the finances of that year, the election of a few candidates would be assured...
...I believe that should our comrades take an active part in their union the prestige of the party wtU be greater and this will also counteract labor politicians who act as th* tail of the Democratic and Republican political machine kites...
...It was in that atmosphere that Comrades, Poree, Brown and myself, with an occasional aid from Comrades Roniker, Goldfinger, Conn, and Dobsevage, unfurled the banner of Socialism to begin a campaign that will always remain a most refreshing and encouraging token of the latent interest the Negro workers of Harlem entertain for Socialism...
...In the latest storm, one of the most tempestuous in Wall Street history, there has been only the normal number of suicides reported...
...I know that our philosophy eai be written so that It win not frighten the average man or woman...
...I do not blame the city office for this condition but still the fact remains that the membership has depended upon the City organization to do the work necessary...
...Their acts in the past years have been to sit back and give orders...
...The collapse of stock prices therefore, is attributable principally not to financial and industrial conditions, but to causes pertaining directly to the state of the stock market itself...
...If a corporation's income available for div**% t>i, pnmmnn iharM in equivalent to $10 per sham, and ths stock can be purchased at $100 par share (10 treses the earnings) a dividend yield of • par cent may bs reasonably expected, shsos railroad and industrial corporations can conservatively distribute SO par cent of their annual surplus earning...
...Since that time the profits of a number of these institutions created an apparently insatiable demand for their issues...
...Hoover is said to be "perturbed...
...m!9 But what of the h*bnx&|3 stock market's cothBSayesa S business, and nothing hj sjZstl a refusal to fees -th*dsss facts Involved in a, tow wiping out of capital, eeae] activity recedes, and eerssai chne, market psyohebey «t change...
...Then Grundy and Moses spoke and the row is on...
...It seems that those in charge of the important campaign committee ,<do not sense the demands upon the part of the workers for a different kind of campaign...
...Now and then the farmers have been stripped of their holdings by their capitalist and banking allies...
...Now it is common gossip in the street that in expectation of quite a number of suicides following the crash in Wall Street the word was sent down the line to soft pedal news of these tragedies...
...We have no inside information regarding this but there is reason for believing that there is some truth in the current gossip...
...The sums poured into the treasuries of these corporations help to drive up common stocks, and in turn seemed to support the theories of the "new era" proponents...
...Personally I feel that is true...
...That idea should be forgotten...
...These conclusions were not theoretical paper and pencil fancies...
...ahrperience was behnMa...
...Yet when a circle is organized it generally falls by the wayside because of the lack of spirit and attention, 10...
...At $150...
...In an effort to blind the eyes of Negroes to the remarkable success attending its lily-white campaign In the South, the Republican Party nominated for Congress in the special election in the 21st district a young Negro assistant to United States Attorney Turtle...
...Another result of the degradation of politics is that its low character keeps the aim of many voters confused and ineffective...
...Very' few are still active, yet it is a known fact that men like Beardsley, c assidy and Clark have been very active both as trade Unionists and Socialists...
...This is due not only to farmer discontent but to two ivory domes in the G. O. P., Joseph R. Grundy, owner of the Pennsylvania section of the party, and Senator Moses of New Hampshire...
...The older Comrades do not know the pulse of the younger ones...
...In the new era, an unlimited market was to bs created for commodities by the extension of credit on the Installment basis and by quick changes in the styles of such, consumers' goods ss automobiles, radios, etc Z—Investment Trusts The excellent record of the investment trusts in Europe, particularly England, was made the basis for an immense amount of stock offerings of these corporations...
...With few exceptions, in elections since that period the Republican party has been chiefly an alliance between Eastern and Northern capitalists and the tillers of the soil...
...1—"New Era" Psychology The background for the entire boom may be found in the wide belief in a new era in which precedent and experience were to account for nought...
...In other words, the Democratic candidate received nearly 17,000 votes less than last year...
...They do not realize that the membership of that organization of today will be the membership of the Socialist party to-morrow...
...wfll not these corporations earn tar more In 1933 or 1935...
...The flood-tide of interest and sympathy manifested by the electorate of this city in the personality of our brilliant leader, Norman Thomas, and in the Socialist municipal program of 1929 is but an added evidence to Justify the faith—e faith based upon knowledge—which we Socialists have always cherished, that eventually society will accept our program of social and economic justice if we fight on...
...The prospect of a people famishing for food is a grisly spectre that no doubt has reconciled some to the maintenance of a big navy...
...Municipal Consolidated Gas and Electric was s good company, a famous institution was back of the company, and te dispose of all doubts, a merger was .in prospect Mergers increased profits overnight, and made stockholders wealthy in a month...
...When the victims of war are sobbing they speak the same language all over the world—Karl Spitteler, Swiss poet, and Noble Prise winner...
...3. I would reorganise the entire city...
...One was old-faahioned to raise the question...
...Within a decade after the Civil War the Republicans won the western farmers...
...If such voters were transferred to any other country where decency and honesty is the role regardless of which party is in power they would be compelled to think in terms of programs and ideals...
...Today most of them have little more than their shirts and overalls and they have been insisting on another chance at the tariff barrel...
Vol. 9 • November 1929 • No. 15
