The Buffalo News from Buffalo, New York • 14

The Buffalo News Business inance Sunday ebruary 18 1979 on the MOI Buffalo Stock Ex 1 1929 the stocks Corp the steady liquidation in progress here since in The By Mike McKeating al the re on the MR BRADT who today is retired and lives in the Town of Tonawanda remembers that trading among the floor brokers of the 35 member firms was "very and mostly was done in odd lots of less than a hundred shares The floor of the Exchange was also connected via ticker tape to the New York Exchange where the big action was course there was no SEC (Se curities Exchange Commission) Mr Bradt said Companies and investors were not required to disclose much information about their activi ties and stock manipulation activities were common There also was a lot of "insider trading" in those days Mr Bradt said "Information was not disseminated like it is today Companies did not 4 A SPOKESMAN OR STV I earlier this week admitted to The1 Buffalo News that it was the appli 1 cant for Channel 49 then the next I day changed his mind and denied I it However sources in the indus I try who are usually accurate say I STV is indeed the company which I plans to apply for Channel 49 The other company Anax Inc I is headed by Paul A Willax presi I dent of Erie Savings Bank and Al I fred Anscombe thunder of Am I herst Cablevision a cable televi I sion franchise which was later I sold to International Cable 56 6 7 7r9 8 NYSE Amex Bonds OTC Options BOARD MAN The life of a board man in a Buffalo brokerage house during the era of me Buffalo Stock Exchange was anything but ing In this 1936 picture Charles Kollatz chalks up ticker prices to see Today the job is done electronically q1: THE WORDS and "de had not yet entered the Buffalo vocabulary back in the early months of 1929 when plans for the establishment of the Buffalo Stock Ex change began to rise from the drawing boards of the major securities brokers in the city ew remember now that 1929 start ed out to be a year of great prosperity for Buffalo and the rest of the nation Business was booming actories were expanding Unemployment was low New buildings like the Rand Building The Courier Express build ing New York Central Railroad termi nal and City Hall were under con struction A lot of people had money to spend and much of it was being "in in "sure in the stock market The previous year 1928 had seen tremendous growth in public interest in investing speculating and gambling in stocks and bonds Volume on the New York Stock Exchange hit a record 38 million shares in one trading in March Then came a 47 million share day later the same month Then 5 million shares one day in June In November after Herbert Hoover beat Al Smith for President the volume soared to an amazing 66 million shares in one day THE INCREASED volume of trad ing and interest in the market was generated largely by almost continual ly rising prices of stocks To the aver age investor it seemed hard not to make money in the market During 1928 the price of Radio Corp of America one of the glamor issues of the day climbed from $85 to $420 a share US Steel went from $150 to $190 The Dow Jones Industrial Average climbed from the to the It was as President Coolidge de ny ROBERT SUMMERS Real estate speculators city plan ners and hotel executives who are eye ing various parcels of downtown Buffa lo property as possible sites for future gambling casinos might do well to avoid the neighborhood where Niaga ra Pearl and Eagle Streets come together That corner now a parking lot might still be haunted by the ghosts of the last legal to operate in downtown Buffalo the long forgotten Buffalo Stock Exchange Had it survived the Buffalo Stock Exchange would this week be getting ready to celebrate its 50th anniversary Members and management prob ably would be preparing speeches and press releases detailing its long and distinguished history and extolling the virtues of the free enterprise system and the joys of owning stocks and bonds But like many business ventures which were booming in 1929 the Buffa lo Stock Exchange was wiped out by the Great Crash and the Great Depres sion which also were born that same year change of its own Baltimore Boston Cincinnati Cleveland Detroit Hart ford Los Angeles New Orleans Phila delphia Pittsburgh St Louis Salt Lake City San rancisco and Wash ington all had local exchanges which at the time were regarded as indica tions that those cities had made it into the financial big leagues Looking backward however Mr Galbraith saw the growth of the many local exchanges as another symptom of the wild fever spawned by the great bull market of the late "By 1929 it was a poor town sadly devoid of civic spirit which wasn't wondering if it too have a stock Mr Galbraith wrote Ac BESIDES THE previously mention ed advantages of knowing exact price and volume of trades the Buffalo Stock promoters said the exchange would also be of great bene fit to local businesses listed Local companies the Chamber of Commerce magazine article said would receive "valuable from being listed Their homes would be quoted daily in newspapers across the country The fact they were listed on the Buffalo Stock Exchange would indicate they were "a company of more than average is a demonstration at once of financial strength and activity here as well as of the soundness and impor tance of local the arti cle said When the Buffalo Stock Exchange opened for business there were about 65 issues listed for trading Some of time did go on to become companies "of more than average Some of them have not been heard from in years THOSE THAT did survive in one form or another include Marine Mid land and Liberty banks Niagara Share Abstract Title Mortgage Spencer Kellogg (now a division of Textron Inc) Buffalo Niagara East ern and Niagara Hudson (now Niaga ra Mohawk Power Corp) and Rich Ice Cream (now Rich Products Corp) Non survivors included issues like International Railway Co which ran trolleys in and between several West ern New York Communities ord Hotels which owned hotels in Toronto Montreal and Erie Pa and Stout Airlines Inc which had air routes between Buffalo Detroit and Cleveland The exchange also listed 15 "in vestment whose main assets consisted of the stocks of other compa nies Most of them were sponsored by one of the local banks Most of them did not survive the Depression which was to come The Buffalo Stock Exchange got off to a rousing start According to an article wTitten by its first president George Rea the organizers had hoped that trading might reach as much as 6000 shares a day They were pleasantly surprised when trading averaged about 12000 shares a day THE EXCHANGE was open the same hours as the New York Stock Exchange 10 am to 3 pm on Weekdays and 10 a to noon on Saturdays A total of 315559 shares were traded during May Volume rose to 415441 shares in June with a record 32819 shares being traded on June 19 can be no doubt that within the next few years Buffalo will rank among the leading stock exchanges in the Mr Rea wrote in August 1929 The Chamber of Commerce shared Mr enthusiasm The Stock Exchange enabled Buffa lo to be in rank with Cleve land Detroit and Chicago in impor tance of local security business a phase of financing which has shown remarkable growth during the past two the Chamber newsletter said Life on the Buffalo Stock Exchange was sometimes during the ex change's early days recalls John A Bradt who was a floor broker for the new defunct brokerage firm of Vietor Hubbell Rea Common Business have to report their earnings And be fore they did directors and all theirfriends knew about he said ON THE New York Exchange Mr Bradt said "loor traders would form pools to bid a stock up hoping to sell it to somebody else They usually would get a crop of suckers to "Sometimes get a wire from New York that would say something like Buying (Corp of America) That was news Buy ing he said Mr Bradt said he did not remem ber such practices on the smaller Buffalo Stock Exchange He remem bers that just about everybody on the floor wore a three piece suit He recalls that Laube's Cafeteria next door was a good place to eat that Abe Wallace of the firm of Wal lace Trost was a "sharp and that nearby speakeasies named and were popular spots for a drink after a hard day of stock trading The good times on the Buffalo Stock Exchange came to an abrubt end in October 1929 on days which have since been known as Black Thursday and Black Tuesday During the course of less than a week thou sands of stocks plummeted in price and thousands of people many of whom had borrowed money to buy stocks were wiped out EXCHANGE BUILDING On May change set up shop on the first floor of the Mutual Life Building 210 Pearl St The structure was demolished in 1971 The site today is a parking lot behind the Main Place Mall I "PERHAPS most I predominant historical pattern in I the past was internecine rivalry I among various levels of govern I ment in their industrial develop I ment Mr Curley said I all stopped about a year I and a half ago and the way every I one worked together on this one is I one of the best examples of I he said I Mr Curley noted that at a I meeting with Rolls Royce execu tives in Buffalo on Oct 4 Mayor Griffin stood up and told the Rolls 1 officials: if you see your way clear to build the plantI in the City of Buffalo my adminis tration will do everything we canI to cooperate because we want you 1 in the I Mr Curley noted that nearly aI dozen state county and city agen cies worked on the proposal in I total cooperation They maintain I ed secrecy and none of the offi I cials or agencies tried to take po litical advantage of the situation I Chonnel 49 Coming? 4 As reported in The Buffalo I News earlier there are two groups interested in acquiring the fran chise for Channel 49 a UH fre I quency reserved for Buffalo by the I ederal Communications Commis si sion but never awarded I Sources say one company defi 1 nitely will apply for the franchise i probably within a few weeks The I other is still doing market studies I to determine whether to apply for I Channel 49 or to acquire a fran I chise in another city 1 Sources say that one company I is Subscription Television of I America a subsidiary of STV Sta ll tion Corp headquarted in New I York City I A Kenmore man is one of the I senior officers of STV and will I probably play a key role in the I application for Channel 49 Both I industry sources and the name of 1 the company itself suggest that its I plans call for Channel 49 to be at I least partially pay TV It will probably offer some free programming but charge sub scribers a fee for a package of first run movies and sporting I events sources say scribed it in a quote used as a chapter heading by economist John Kenneth Galbraith in his study of "The Great a time for "vision and boundless hope and While most of the stock market fanciers were following the ticker tape chronicle of prsoperity emanating from the floor of the New York Stock Exchange on Wall St many Buffalo investors were discover ing that money could also be made at home in the stocks of local companies Buffalo investors were following fastgrowers like Marine Trust and Deco Refreshments and Niagara Hud son companies that listed on the New York Exchange but were traded "over the at the 70 or so securities dealers which had offices in the city BUT THEN as now over the coun ter trading had several disadvantages for investors or one thing no one knew the exact prices or volume at which stock trades were made Deal ers would publish and prices of various issues but few poeple knew for sure what price a particular stock would bring in an open market at any particular time Not knowing the current price of a particular stock posed problems for some investors particularly those who speculated with bor row ed money In those days an investor could trade on 10 percent margin A specula tor need only put up $100 to buy $1000 w'orth of stock The other $900 could be borrowed usually from a broket or a bank with the purchased stock itself acting as collateral for the loan Being able to know the exact day to day value of the stock held in collateral from newspaper quotes or from the stock ticker itself made things easier for both the investors and the people who lent them the money to make investments According to an article by veteran Buffalo newspaperman William Barney in the April 1929 edition of the Buffalo Chamber of Commerce maga zine talk of starting a Buffalo Stock Exchange began about 1926 and finally came to fruition on eb 21 1929 when a group of 35 brokerage firms organ ized the Exchange and made arrange ments to open a trading room on the first floor of what was then called the Mutual Life Building an 11 story structure with entrances at 210 Pearl St and 45 Niagara St THE NAME was quickly changed to the Exchange and a trading area equipped with a chalk board a horseshoe shaped trad ing post a bank of telephones and desks and a visitors gallery was soon constructed The Buffalo Stock Exchange opened for business on May 1 1929 and was as Mr Barney put it then "an evidence that the city has come of age as an independent financial and busi ness In those days every city of impor tance seemed to have a stock ex Some considered it a cleans ing which scared out people who didn't belong in the market 'Nir Bradt said 3777 They said got the shoe clerks he said BY ITS IRST ANNUAL meeting in ebruary of 1930 the officials of ibe Buffalo Stock Exchange bragged that they had handled 4523773 shares dur ing their 8 months of 1929 They had also traded $1747000 in bonds and 308767 rights and warrants Seats on the exchange which had originally sold for $10000 had changed hands for as high as $25000 and none had recently been purchased for $22500 Roland Lord the second president of the exchange termed the operation as "profitable and smooth running But gradually it became clear that October 1929 had marked not only the end of the stock market boom but also the beginning of the Great Depression actories closed people lost jobs investors were wiped out and interest in stock speculation declined sharply' In June 1930 volume on the Buffalo Exchange was 264287 shares It fell io 101265 shares in 1 July and 99365 shares in August before makingqa slight fall rebound By the end of the "year volume for all 12 months of 1930 was 2537428 shares about 2 million shares less than the total for two thirds of LEWIS CASTLE who wasth executive director of the Exchange wrote in his review of the year: break throughout the year seemed like the last and optimists kept averaging (buying more shares) until each break became more disastrous Things grew worse in 1931 Voliime for the year fell to 1419885 shares There was little interest any more jn the Buffalo Stock Exchange the Mr Brandt remembers "the market just dribbled away Dribbled away day after 'day You wondered when it was ever going to things got so slow we used to play bridge over Mr Bradtsaid The Buffalo Stock Exchange con tinued in business for several more of the darkest years of the depression But gradually 'as brokerage firms went out of business as companies listed on the exchange merged or fqld ed and as the public became mojo and more disenchanted with the stock market "everyone thought every broker was a Mr Bradt said The Buffalo Stock importance diminished THE EXCHANGE limped along for several more years but by 1935 annu al volume had dropped to 143669 shares The end came on March 25 1936 when the Securities Exchange Com mission which had been formed in 1933 gave the Buffalo Stock Exchange permission to close Some members predicted it would reopen again but it was not to be so After its closing the Stock Ex change Building took on a new identi ty The building where thousands had lost millions of dollars gambling op the stock market ironically became head quarters for the Erie County Welfare Department The building was demolished "Jn 1971 to become a parking lot west of the Main Place Mali Sometimes late at night when the traffic dibs down and the neighborhood get quiet you can almost heara drejtm crashing THE WORST DAY was Black Tuesday October 29 A record total of 164 million shares was traded that day on the New York Exchange And a record 65000 shares were sold Buffalo Exchange Prices plummeted Some could find no buyers Radio which had sold for $98 a share in Sep tember dropped to $3850 US Steel which sold for $257 the day after Labor Day plunged to $174 on Black Tuesday of holders of local se curities threw their stocks overboard for whatever they would said The Buffalo Evening News that day Marine Midland fell $13 a share to $40 Niagara Share was off 8 to $2114 irst National Bank of Kenmore dropped from a 1929 high of $300 to $89 a share Brott Co an investment trust fell from $35 to $5 Iroquois Share Corp went from $50 to $10 savings of a multitide of Buffalo investors and speculators have been wiped out in the collapse of the security The News said of speculators who made thousands of dollars during the four boom months of May June July and August in the local exchange were reported to have lost practically all their profits in which has been the first week News said HI PHILLIPS a popular colum nist of the day wrote a poem about the crash which appeared on this editorial page It went was an old woman who lived in a shoe She brought lots of issues untested and hew 1 She did everything that her broker said to Now gone is her money and also her never forget that day as long as I said Mr Bradt At first the as it was called then was thought by many to be just a temporary correction in the overactive sjock market Zi A Buffalo Stock Exchange A ew Months of Glory And Years of Decline Cooperation Impressed Rolls Royce Michael Curley the formet Rnftaiomao who heads the lob I leveiopmeni Authority came 10 rown this week to tell two very interesting stones One has ready been reported and other The first story which was ported in The Buffalo News Wednesday is that officials of state and the Buffalo Area Cham ber of Commerce have been meet ing secretly for the last six months with Rolls Royce the giant British aircraft engine company and have offered Rolls a package of incentives worth $31 million to lo cate a plant in the Buffalo area Mr Curley made the disclo sure after the story broke in The Wall Street Journal on Monday that Rolls Royce plans to build a major aircraft engine plant in this country Rolls Royce originally consid ered more than LOO sites in the I US but has narrowed the num I bei under active consideration to I about 10 and Buffalo is one of I them Mr Curley said I I HE SAID HE can tell by the I amount of additional detailed and I specific information about the I Buffalo area that Rolls officials I nave requested that Buffalo is I high on the list of possibilities I Mr Curley said he has flown I to London four times and Cham bei of Commerce officials flew I there once to present additional I information I The story that been told I yet is that one of the things that I impressed Rolls Royce most about I Buffalo was the way in which all I segments of the community city I and county officials the Chamber I the Erie County Industrial Devel I opment Authority and business I and banking leaders worked to gether to land the plant I That may not be a big story in I some places but here sort of a I man bites dog story because in I the past one of the things I hurt our industrial development is that these same forces I more often than not were working I at cross purposes Sb i Hr MKil 11 Mm a Irlil 72 fir Ii la wA TIfrUB'y idPBaiiMI I 4.