Good-bye To Everything!

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Precisely at 10 A.M. on Thursday, October 24, 1929, William R. Crawford, superintendent of the mechanical department of the New York Stock Exchange, whanged his gavel against the traditional gong. Beneath the Stars and Stripes and the blue banner of the Empire State, some nine hundred brokers began moving around the 16,000 square feet of felt-padded floor, giving orders to clerks in seersucker and linen coats manning the bron/.e, stockadelike trading posts. Another market day had begun.

But this was neither an ordinary day nor an ordinary market. It was the autumn of the year of the Bull, nine months of rampaging rises that had made headlines on front pages across America and convinced hundreds of thousands that the millennium had indeed arrived. Not only was the abolition of poverty just around the corner (as Herbert Hoover had confidently predicted in his 1928 campaign speeches); it was now possible for the average man to get rich overnight. A jingle in the Saturday Evening Post summed up the national attitude:

O hush thee, my babe, granny’s bought some more shares, Daddy’s gone out to play with the bulls and the bears, Mother’s buying on tips and she simply can’t lose, And baby shall have some expensive new shoes.

Day after day, month after month, the bull market had surged ever upward, carrying favorite stocks into the empyrean. Radio Corporation of America, without ever paying a dividend, had soared over 500. An obscure company named Western Warehouses had behaved in similar fashion, for equally speculative reasons. The mighty Bull had long since left the solid earth of reality. Stocks no longer went up because a company was making money or creating new products. They rose because the titans of the market wanted them to rise.

This mystique created a galaxy of new American heroes, whose every word and move was watched and discussed. A few sentences of optimism about the automobile business from John J. Raskob was enough to drive General Motors up twelve points. News that Detroit’s Fisher brothers, Samuel Insull, William Crapo Durant, Arthur W. Cutten, Charles Topping, were buying a particular stock was certain to send it bounding upward. In the galleries of the Stock Exchange visitors begged guides to point out Michael J. Meehan, the bespectacled Irishman who had made an estimated twenty-five million dollars by specializing in Radio. Or gray-haired Frank Bliss, the “silver fox of Wall Street,” who had engineered the fabulous corner on Piggly-Wiggly grocery chain stock in 1923.

But on Thursday, October 24, 1929, the nation was watching the Stock Exchange for reasons more urgent than this general fascination with men who made millions by exchanging orders for mysterious little slips of paper. For several weeks—since September 3, the day after Labor Day, to be exact—the Big Bull had been behaving as it someone was shorting his oats. One day he was surging onward and upward again, the next he was bolting dismayingly downward. By October 18, the Wall Street Journal was grousing: “With Steel oft approximately 50 points [rom its high of the year, Allied Chemical 44, … Chrysler 70, … New York Central 36, … General Electric 54, no one can say that we have been in a bull market.”

Four Who Saw It Coming

But the Bull had had his ups and downs before. In December, 1938, Radio had dropped a sickening 80 points in a single day. Besides, “they”—the big operators, the bankers and top executives who had loaned almost six billion dollars to brokers for speculators buying stocks on margin—woidd not tolerate a really serious decline. This article of faith was bolstered by the vast growth of investment trustscombines which took cash from small investors and bought stocks with it under the direction of Wall Street professionals. Jn 1929 alone, some 265 of these creatures—whose stock was also sold and speculated upon—had appeared on the scene. They supposedly had net assets of over eight billion dollars—an eightfold increase since 1927. All these mysterious factors (investment trusts were not required to tell anyone which stocks they bought) added up to a magic phrase, “organized support”—which was supposed to pump the right kind of oats into the Big Bull at crucial moments.

This was what the nation—especially the tens of thousands of shaken small speculators—was anxiously hoping would happen early on October 24. During the last hour of the previous day, the Bull had been staggered by a flood of furious selling—2,600,000 shares had changed hands in an hour, and the New York Times industrial average sagged from 415 to 384, wiping out all the gains of a glorious summer.