HT This Day: April 18, 1935 -- The Bombay stock exchange crisis
Mr. K. P. P. Shroff, President, Bombay Stock Exchange, interviewed by the Press regarding the recent crisis in the Bombay Stock Exchange said it was due to several outside circumstances over which the Stock Exchange had no control.
Mr. K. P. P. Shroff, President, Bombay Stock Exchange, interviewed by the Press regarding the recent crisis in the Bombay Stock Exchange said it was due to several outside circumstances over which the Stock Exchange had no control. These circumstances were the fall in sterling security on the London Stock Exchange, the German conscription and the Belga situation.
Prices on the Bombay Stock Exchange were also gradually inflated and such high prices could not be maintained.
He sounded a warning to the speculative public but his warning went unheeded and what followed could not be avoided.
He said he never expected such bold fall in the prices of shares that was witnessed on the Exchange.
Nevertheless, it was very creditable on the part of brokers who not all their liabilities in full with the exception of five of them them whose inability to meet their liabilities arose out of default on the part of their clients and there was no speculation on their part.
Weak Bull operators having cleared out of the Exchange, the President thought the situation now was normal. Although it was not possible for him to estimate the loss of brokers on account of defaulting clients, it seemed to him that they had lost about four lakhs of rupees by compromise arrived at between the five brokers concerned in the crisis.
There was a rumour that as a consequence of the recent crisis the total loss to speculative public amounted to Rs. 2 cores but the President maintained that the total loss could not be more than Rs. 65 lakhs which could not be considered as very heavy having regard to the huge profits which they had made during the last six months.
