When People Stoned The Banks To Get A Meal In Jail

Sun Herald

Sunday October 24, 1999

John Synnott

This week is the 70th anniversary of the Great Crash on Wall Street and Eric Storm, 104, has been a share trader through it all. He spoke to John Synnott.

WHEN shares collapsed in Australia in 1929, Eric Storm, then a commodities broker, bought up big. He made a killing.

``Yet I remember decent people would bail you up in the city and ask you for a couple of bob for a meal because they had nothing to eat," he said. ``People would stand in Martin Place and throw stones at the banks so the police would come and arrest them and they would get a meal in jail."

Mr Storm, who still enjoys trading from his Cremorne home, says the present ups and downs of the stock market are nothing compared with the bad old days.

``A few days ago we had a big drop here in the stock market. I got out of it very well yesterday I will do even better today," he said last week.

A lot of the money is given away to charity about $500,000 each year of his $20 million including supporting 85 war orphans. He was made a Member of the Order of Australia this year.

His wealth sprang from a Burns Philp posting as an accountant to Indonesia, then switching jobs to become a broker and making #400,000 during the 1920s.

``The Dutch East Indies, as it was then known, was producing everything the world was short of after the First World War sugar, rubber, tea, coffee and petrol," he said.

``Prices were sky high. I was a broker there from 1917 and our small office was making millions.

``When I came back to Sydney in 1930 I found people walking the streets.

``The trouble started on the other side of the world and came out here America was the stumbling block.

``Our economy had broken down entirely and nobody knew what was going to happen. The stock market had tumbled and was very low. I had the money to buy good shares very cheaply almost at the bottom of the market. I was brave enough to do it.

`` I made money out of the Depression. Tooth, BHP and all the good ones, they were dirt cheap."

Australia did not have frantic stock market speculation in 1929 or a big crash like Wall Street's, because few brokers here operated on borrowed money.

Yet the share index fell from a peak of 120 in April that year to 43 in September, 1931.

``The Australian crisis, when it came, was largely one of falling commodity prices, governmental ability to service large debts, and heavy unemployment," said Salsbury and Sweeney in their history of the stock exchange, The Bull, The Bear And The Kangaroo.

The US stock market collapse did not cause the depression, according to Professor Boris Schedvin of Melbourne University. It was mainly a US phenomenon, linked to a crisis in the US banking system where a third of banks went bust.

Central banks did not play the role they play now and nations engaged in ``beggar thy neighbour" policies.

``We came through the Asian crisis last year because the US kept putting dollars in the system which created liquidity," said Professor Schedvin.