FRENZIED FINANCE SCENES ON WALL STREET.

Hokitika Guardian, 27 July 1928, Page 3

FRENZIED FINANCE

SCENES ON WALL STREET.

“Paper profits’' turned into “losses” on Wall Street this week amount to a colossal and incalculable sum—literally “wealth untold.” Such losses, resulting from the Stock Market crash which began on Monday with the precipitate descent of 52 points in Bancitaly shares here, being followed by an even deeper plunge in San Frannisiv, the lootieem’s. headquarters, will amount to billions upon billions of dollars.

This debacle marks the crisis of a period of tlio wildest speculation by the public which the country has ever known.

Such frenzied, (finance, carried on for several months, lias been in vogue in utter disregard of all advice from conservative bankers and others. Indeed, the warnings that a large number of stocks had been inflated beyond all reason, and that the top-heavy market was due to topple over, seemed only to increase the fever of reckless buying on margin.

To-day thousands of bewildered gamblers sit amid the ruins of their air castles, with their pockets turned inside out, and their calculations so upset that they can only wonder what is happening.

Most astounding has been the speculation in shares of the Bank of Italy and the Bancitaly. The former institution was founded in California by Air A. P. Giannini, a financier of that State; and the Bancitaly—a great investment trust which specialises in bank stocks—was also due to his genius. Italian-Americans all over the country have regarded Giannini as a financial wizard, a Midas who could not fail to turn, into gold anything which ho touched. And amazingly successful have been his methods. He lias acquired bank after bank till his concerns control a string of them. Recently the Bank of America, one of New York’s oldest and most conservative institutions of its kind, came under Giannini’s control. But it must not for a moment fie supposed that Giannini is responsible for the wild plunging of his admirers.

He lias done everything in his power to discourage it by repeated warnings of the peril of excessive speculation. In liis attempts to curb the people from blowing financial bubbles, ho went so far as to request leading banks not to lend money on Banoitnly and Bank of Italy shares for speculative purposes.

It was all in vain. The public turned deaf ears—ears which have in so many cases proved to these wild speculators that, while they have not “the Midas touch,” they have something like Midas ears.

They plunged on. Once the collapse began, the bears speeded it with heavy short, selling, and the stocks of even some other eminently substantial banks slid down anywhere from 40 to 100 points, or

more. Stock and bond markets arc alike affected. Yesterday the record total of 5,052, 790 shares traded involved no fewer than 802 issues.