Business Adventures by John Brooks

Author:John Brooks
Language: eng
Format: epub
ISBN: 9781497638853
Publisher: Open Road Media

8

The Last Great Corner

BETWEEN SPRING and midsummer, 1958, the common stock of the E. L. Bruce Company, the nation’s leading maker of hardwood floors, moved from a low of just under $17 a share to a high of $190 a share. This startling, even alarming, rise was made in an ascending scale that was climaxed by a frantic crescendo in which the price went up a hundred dollars a share in a single day. Nothing of the sort had happened for a generation. Furthermore—and even more alarming—the rise did not seem to have the slightest bit of relation to any sudden hunger on the part of the American public for new hardwood floors. To the consternation of almost everyone concerned, conceivably including even some of the holders of Bruce stock, it seemed to be entirely the result of a technical stock-market situation called a corner. With the exception of a general panic such as occurred in 1929, a corner is the most drastic and spectacular of all developments that can occur in the stock market, and more than once in the nineteenth and early twentieth centuries, corners had threatened to wreck the national economy.

The Bruce situation never threatened to do that. For one thing, the Bruce Company was so small in relation to the economy as a whole that even the wildest gyrations in its stock could hardly have much national effect. For another, the Bruce “corner” was accidental—the by-product of a fight for corporate control—rather than the result of calculated manipulations, as most of the historic corners had been. Finally, this one eventually turned out to be not a true corner at all, but only a near thing; in September, Bruce stock quieted down and settled at a reasonable level. But the incident served to stir up memories, some of them perhaps tinged with nostalgia, among those flinty old Wall Streeters who had been around to see the classic corners—or at least the last of them.

In June of 1922, the New York Stock Exchange began listing the shares of a corporation called Piggly Wiggly Stores—a chain of retail self-service markets situated mostly in the South and West, with headquarters in Memphis—and the stage was set for one of the most dramatic financial battles of that gaudy decade when Wall Street, only negligently watched over by the federal government, was frequently sent reeling by the machinations of operators seeking to enrich themselves and destroy their enemies. Among the theatrical aspects of this particular battle—a battle so celebrated in its time that headline writers referred to it simply as the “Piggly Crisis”—was the personality of the hero (or, as some people saw it, the villain), who was a newcomer to Wall Street, a country boy setting out defiantly, amid the cheers of a good part of rural America, to lay the slick manipulators of New York by the heels. He was Clarence Saunders, of Memphis, a plump, neat, handsome man of forty-one who was already something of a legend in his home town, chiefly because of a house he was putting up there for himself.

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