Markets & Plunger

U. S. speculators took it easy last week. Brokers cleaned up the litter left by the July Crash (TIME. July 31). Stock and grain prices rebounded, then shuffled off in a secondary reaction as exchange offi cials prepared for resumption of normal trading. The Chicago Board of Trade retained limits on daily fluctuation but removed the minimum prices established when Edward A. ("Doc") Crawford was suspended for insolvency. Banned from the pit forever were all dealings in in demnities (options on grain futures contracts, generally regarded as pure gambling). The New York Stock Exchange voted to lengthen its short sessions into the full five-hour trading day, but in mercy to frazzled brokerage house clerks, whose objection to all-night work without extra pay threatened to become a general strike, the Exchange will be closed every Saturday until after Labor Day.

But Wall & La Salle Streets were busy --doing their best to raise a New Deal plunger to the stature of Chicago's old-time giants. From the moment that it was whispered that Doc Crawford was the plunger whom Secretary of Agriculture Wallace shamed as largely responsible for the crash in grain prices, the Crawford legend grew like a puffball. Last week auditors were plowing through the books in his tiny office at No. 60 Beaver St., Manhattan, trying to find out just where the secretive little onetime physician stood. Few believed that Doc Crawford was a ruined man. Though he curtly refused to be interviewed it was reported that even he did not know the extent of his huge commitments.

Meantime the Press added these paragraphs to the Crawford legend

P:At the peak of the market his paper profits were more than $100,000,000 but Doc Crawford continued to lunch at a Horn & Hardart Automat.

P:His downfall was caused by his love of selling indemnities. He stood ready to sell options on any amounts, in any grains, from 5,000 bu. to 1,000,000 bu.

P:His positions in sterling and silver were "enormous."

P:He was reported to be long vast quantities of cotton (in which he made his original stake in New Orleans 15 years ago). He was also reported to be short of cotton.

P:His long position in stocks was anywhere from 300,000 to 1,600,000 shares.

P:His long position in grains included 13,000,000 bu. of corn, 16,000,000 bu. of wheat, 18,200,000 bu. of rye. His operations in rye were referred to as virtually a "corner."

P:He was long 180,000 tons of rubber, 700,000 tons of sugar, smaller amounts of cottonseed oil, flaxseed, silk, sulphur, lard and 3,168,000,000 eggs.

While the grain pits were still ringing with the tale of a trapped bull, they were startled by an echo from the past--the sound of a bear trapped five years ago and still clawing at the trap. In Chicago's U. S. District Court, President Edward Wellington Backus of Backus-Brooks Co. (lumber) of Minneapolis filed suit against President Gustavus Franklin Swift of Swift & Co.. Allen F. Moore (onetime Republican Congressman from Illinois), Herbert J. Blum (oldtime grain operator). His charge: that in 1928 he sold short 950,000 bushels of July corn, that they and others long 9,000,000 bushels of corn engineered a "corner" in violation of the Sherman anti-trust law, forcing up prices, causing him a loss of $300,000. Under the anti-trust law, a victim may collect damages equal to three times his losses. Multiplying by three and adding $100,000 for legal expenses, Mr. Backus sued for $1,000,000.

This file is automatically generated by a robot program, so reader's discretion is required.