The People: Reservoir of Confidence

The market is practically everybody's business: not only do more than 15 million people hold shares, but some 120 million have stakes in stocks invested by such financial institutions as banks, insurance companies and pension funds. Understandably, then, the U.S. watched the gyrations of the market with interest and alarm. Yet there was also a remarkable degree of confidence in the basic strength of the nation's economy.

Rumors & Plots. Inevitably, some wild rumors spread: an Arizona investor heard that President Kennedy and Nikita Khrushchev had agreed to disarm; a Washington stockholder had a hot tip that the U.S. was about to invade Laos; others understood that Russia had dumped American securities in Switzerland to ruin the U.S. market. Just as inevitably, there was talk about some gigantic plot. In Los Angeles, retired Newspaperman John Gray, 87, who held on to his falling Southern California Edison stock, said: "The whole thing was started by people who wanted to discredit the President. They sold off huge chunks of stock, prices went way down, as was planned, but then things got out of control." California's Maurice Soble, 67, a retired toy-store owner, had it all figured out: "They're doing it because they're sore at the President for refusing to knuckle under on steel prices. It's a conspiracy, you can be sure of that."

The Kennedy Administration came in for plenty of castigation. "It just took something like Kennedy's whipping the steel industry to sort of unsettle the people," said Fred Schoellkopf, a Dallas stock salesman who holds $200,000 worth of shares himself. Complained Chicago Investor E. C. Price, 72: "All you hear these days is that Government is investigating, investigating, investigating. When business needs all the encouragement it can get, all it gets is threats." Said a Winnetka, Ill., patent attorney: "The American economy would be all right if Kennedy would leave it alone."

Big Shots. But most Americans took it pretty much in stride—and many could even find humor in the situation. Chicago's Creative Research Associates Inc. interviewed nearly 200 ticker watchers, reported that 76% of them believed the market shakedown had been inevitable. In Los Angeles, an elderly investor laughed as he looked at the worried faces in front of a stock board. "Some of them got caught short on margin, you know," he chuckled. "They got burned plenty bad. I'll bet they won't try and be big shots again with somebody else's money. Me. I'm cash and carry."

The basic reservoir of confidence found expression in many ways and many places. Said Illinois Attorney Paul Freeman: "The population increase is still going on. That didn't stop Monday or Tuesday, and it means there'll be good business in the future. The only complaint I have is that my brother-in-law bought A.T.&T. lower than I did." Observed Millionaire Showman Billy Rose, a fabulously successful investor who saw the value of his 80,000 shares of A.T.&T. drop by $760,000 in one day: "I'm not worried about the future of A.T.&T. It's as good an investment as the U.S. itself—it owes a lot less money and, to make a small joke, even President Kennedy's father would admit it has much better management."