CRISES IN THE CITY.

Pukekohe & Waiuku Times, Volume 3, Issue 253, 4 December 1914, Page 3 (Supplement)

CRISES IN THE CITY.

WHEN WARS AND RUMOURS (tf WAR CAUSE FINANCIAL PANIC.

(By a Well-known Financial Journalist.) If it can ever be said that the City of London "loses its head" in financial matters tho sudden and unprecedented closing of the Stock Exchange early in August, caused the nearest approach to

Never before, since the foundation alone of the Stock Exchange was laid, in tho year 1801, have the Committee" deemed either political or financial considerations necessary for the issuing ot an official notice such as was posted outside the building, like a bulletin at the door of ft patient in serious ill-health, as the following: "The Committee of the Stock Exchange has decided immediately to close the Stock Exchange until further notice. Official notice will be given to the Press the day before the House is to be re-opened."

IN THE STREET. To "the man in the street," as tho pnra«e goes, but not really meaning the man in "the street," as Throgmorton Street is known, this cold notice does not convev the conditions of excitement which it caused. A swirling mass ot people, brokers, jobbers, Pressmen, curious onlookers, etc., sways to and Iro like the ripples on a pond. A pandemonium of excited talk, of wild conjecture, of pessimistic prognostications, is dominant. . Even tlie infection catches the lady typist who looks down from the window of the broker's office at the rushing crowd and wonders whether it means she can get off early or will she have to stay late. .. Or the more important factor assails her- "Shall I lose my job?" But she finds that the rattle of the typewriter is even more in demand than on an ordinary business day. The instructions to clients as to buying or selling, ol course, cannot be carried through when "the House" is closed, and lengthy letters of explanation to them are necessary.

IN CHANGE ALLEY. The European war panic of 1914, re■ulting in the closing of the Stock hx change, might, perhaps, provide an ai gument for those superstitious adiv* Sals who insist upon the ill luck of the figures 18, and who equally condemn Friday as the Jonah day of the week. The Stock Exchange had its foundation stone laid in 1801, so it w exactly 113 yean* that the building has been in exisFrom 1914 to 1720 is a long cry backwards, and the earlier date synchronises with the period of the smash in Change Allev and the bursting of the South Sea Bubble, immortalised m a famous Pl The e dominance of the South Sea Bub We period in Change Alley, with all its exciting episodes and its wild cat comJanies, is evidenced by the fact that at that t me a public office was opened in Change Alley itself where people were asked it is asserted, to raise the sum o limOuO for a project which would JfteYwarus be disclosed and the public flocked in, paying ss. for every 4,1,UW of stock s'uLribed. A few day, later an advertisement appeared in the puoS S3 to the effect that the subscribers who had applied for stock could ha 9 ve heir money back, as the project had only been put forward to see how many fools could be captured in one day.

THE GREAT WAR HOAX. When stock jobbing took its hold utv of the community in Change Alky the City of London took alarm and endeavoured to restrict brokers to the Royal Exchange but. with verv little success. TinTwent on. and there weremany excitements in the latter-days of the eighteenth century, but it was left tor thf opening years of the nineteenth c«nturv—as a matter of fact, the year IS-fo L one of the most startling "panics upon the Stock Exchange the Sly instance in the 113 years which has elapsed since the formation of the Mock Exchange when the doors of the buddS were not opened at the proper tune ft was the great French \\ ar Hoax when there appeared outside the Man sion House one day early inJMay an mtimation from Lord Hawke bur who presented his compliments to the Lord Slavor of London and had the honour of informing his lordship and thcitizens that the negotiations between doe and Great Britain had been brought to a amicable conclusion. The excitement was terrirac. He funds rose enormously, but by and by the Lord Mayor discovered that he had Wn made the victim of a serious forgery He made ihi s information known to' the Committee of the Stock exchange, but that body refused to open Se doors of the building the next Say until the matter had been either definitely confirmed or definitely den-ed. As a matter of fact, it really was a forgerv, and the doors were.open the next day at noon. On May 18th war its decked. The Stock Exchange Committee on that occasion took the drasMc step of declaring void all the transactions which had been entered into as a result of the hoax.

UNDER NAPOLEON. The next exciting period was in connection with Napoleon, in the year lbU. when a conspiracy was set on loot to augment falsely prices of the fund, and other securities. In this case the pelpetrators were discovered, and they Sere severely punished. Some of them cot twelve months' imprisonment, plus Jfii of from £.500 t0.£1,000 wide three of them were condemned to stand Jor an hour in the pillory in front o tfie Royal Exchange. The latter part „f the Sentence, however, was never car- " The" panic and excitement on the Stock Exchange was, of course ternffic and the Committee, although it d,d not declare all bargains entered into to be void, annulled a considerable numbei of them, and it devoted certain moneys over which it had the contro to charltable purposes, with the result that tin and Westminster Hospitals received the «um or fcouu each and other charitable institutions sums ranging from £3OO to £oo so that altogether an amount very (loot upon £O,OOO was distributed-. In more recent years and after bo construction of the new building of the Stock Excbage. in 1885. more panic* camo upon the City, including Hie tuning crisis in \M). and the excitements in connection with the Bntisli defeats in the Boer War from 1H!« onwards Those were black days indeed, when the continual story of the British reverse* in the Transvaal came over the wire into the Stock Exchange, but. great as the gloom was ... those da vs. the celebrations on the relief of LadyBniith and Mafeking showed thai panic »«w] not of necessity 1* pessimistic, but

there can be an optimism of panic thai is scarcely short of delirium. ITS LIGHTER SIDE.

Dut iu all the history of stocky and share gambling, and of legitimate Stock Excbange transactions, nothing lor its gravity or for the immediate and drastic steps taken to cope with it could compare with the action of the Stock Exchange on the last day of the seventh year of grace lt>l4. There is a lighter side of the Stock Exchange that in brighter days may be talked about. It has its gigantic*

"spoofs" and hoaxes; it has its art. its literature, and its sport—all peculiarlv its own. It has its dramatic and operatic societies, it has provided the setting for two great scenes in a successful and exciting melodrama at Drury Lano Theatre, and it is, when times are flourishing, charitable to the extreme. To-day it is under a cloud, but tho cloud will lift and the golden lining show again.