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.

Equally alarming to many was the way the ticker had behaved. It had fallen far behind the news on the Exchange floor, leaving speculators in thousands of brokerage offices around the nation hopelessly in the dark. Once more (it had also happened during a break on Monday) men were reminded that they could be wiped out without even knowing it. Even more unnerving were the thousands of telegrams sent out that night by brokers, telling speculators they would have to put up more collateral for stocks they had bought on ten per cent margin with the blithe faith that the Bull would carry them to some dizzy profit-taking peak. The collateral by which the margin trader obtained the broker’s loan to finance his purchases was, of course, the stock itself. As long as prices kept going up, it was a delightful way to buy a lot with a little. But if prices sagged ten per cent, that slender cash investment was wiped out, and the broker had to call for more (ash or its equivalent to maintain the proper credit balance.

In the burbling optimism of 1929, it was practically sinful to consider such a possibility. Just how many speculators were betting on the Bull’s perpetuity could be glimpsed from the figures on brokers’ loans. In the fall of 1929 they were around the six-billion-dollar mark—a 400 per cent increase over the early years of the decade. In Chicago, racketeers responded to margin calls by dynamiting the home of a brokerage-house credit manager and throwing stench bombs into three branch offices. But the average speculator was devoid ol such unorthodox resources. For him it was either pay up—or be sold out.

For the first half hour on that fateful Thursday, prices were steady. But good stocks were being offered in large blocks, often a sign of trouble. Six thousand shares of Montgomery Ward changed hands at 83. (A few short months before, it had been selling at 183.) Then came 20,000 shares of Kennccott Copper, 20,000 shares of General Motors, 15,000 of Sinclair Oil, 13,000 of Packard Motors. By eleven o clock, the ticker was behind more than thirty minutes. Suddenly there was raw panic everywhere, panic wilder (ban anything ever seen in the long history of the Exchange. “Sell at market” resounded throughout brokers’ offices, as speculators clutched frantically at paper profits that were melting away before their horrified eyes.

By eleven thirty the ticker was forty-seven minutes late, and the floor of the Stock Exchange was a wild melee. According to the rules the traders might not run, curse, push, or go coatless. But they could shout their orders, and shout they did, especially around Post No. 2, where steel was traded. It was, according to one eyewitness, “the center of a sort of madness,” where specialists such as General Oliver C. Bridgeman fought desperately to keep the price above 200. As the traditional market leader, plunging steel could carry everything else down the chute. One small man in a large gray hat was pinned in the middle of the waving, roaring group. Every so often he would crouch down to scribble some figures on a pad, then leap tip and shout an order at the top of his lungs.

Around plummeting General Motors, there was also a considerable melee. One fat, perspiring man became almost hysterical, yelling orders that made no sense until some friends seixed him by the arm and led him away. Another tall, lean man with a shock of gray hair forgot the rules and raced frantically from one end of the Exchange to the other to shout an order.

Those on the floor at least had the cold comfort of knowing what the quotations were. Outside, as the ticker slipped steadily behind, ignorance added to the mounting terror. Ordinarily the alert speculator was never more than a few minutes away from a ticker during trading hours and could tell at a glance what the magic numbers meant, although the Exchange omitted all hut the final digit of each quotation. But on the twenty-fourth, when a man saw figures like R 6.5½.5.4 he could not he sure whether they meant Radio was at 66 or 56 or 46. At ten-minute intervals the bond ticker spewed forth a list of selected stock prices direct from the floor. But this only added to the panic by reporting quotations ten and twenty points below what was coming over the stock ticker.

A together, that morning, over seven hundred people jammed the Exchange galleries. (One visitor was Winston Churchill, Great Britain’s former Chancellor of the Exchequer, who was touring the United States as a lecturer during one of his political limbos.) At half past twelve officials closed the galleries, as a small attempt to cut oil one avenue of panic. It was a feckless gesture. Outside on Broad Street a “weird roar” rose from an already immense crowd. Police Commissioner Grover Whalcn hastily dispatched extra policemen to the scene to keep order. But they were unnecessary. The only thing wild about the crowd was the rumors sweeping it. Supposedly, eleven speculators had already killed themselves. The Chicago and Buffalo stock exchanges had closed. When a workman appeared on top of a nearby building, the crowd immediately surged in his direction, waiting for him to jump.

Except for this bizarre expectation there was little external emotion cither on Wall Street or elsewhere. According to Edwin Lefèvre, a veteran Stock Exchange reporter, the faces of the watchers expressed “not so much suffering as a sort of horrified incredulity.” In brokers’ branch olliccs, crowds overflowed from buildings, blocking sidewalks, forcing nonspeculating tenants to use service entrances. “They stood there,” Lefèvre said, “dying men counting their own last pulse beats.” He did not see a single one telling his neighbor his tale of woe. Each kept his misery to himself. As the ticker fell further behind, many called the Exchange door for current news. Few got through; most telephone lines were jammed. When one did, he would come back, report the news, and other men would simply shake their heads or just gulp.

There was more visible grief in the uptown brokers’ offices that kept separate rooms for women clients. One elderly woman sat all day in the first row at one office, weeping quietly, while her daughter tried to comfort her. In the office of De Saint Phalle & Co., at Park and Fifty-seventh, there was an attendant on duty with smelling salts.

On the Atlantic, aboard the luxury liner Berengaria , which the resourceful Michael J. Meehan had equipped with a broker’s office and ticker tape, a replay of scenes on land took place. Games, chats, all the ordinary ritual of shipboard life, ceased, and passengers jammed the deck outside the broker’s office. One woman lost $160,000 in the morning’s trading, and the ship’s radioman all but wore out his fingers flashing orders for nearly 20,000 shares in the course of the day. It was, one passenger declared, a “deathwatch that even kept people from their meals.”

At about twelve o’clock on the Exchange floor, the dreaded “no bid” became commonplace. One of the basic principles (and mysteries) of the speculators’ market has always been the readiness of someone else to buy when stocks are offered for sale. But now blue chips were dropping five and ten points between bids. Around steel’s No. 2 post, there was even worse news. The market leader had crashed below 200 and was rapidly approaching 190.

But help was on its way. To the august offices of J. P. Morgan and Company at 23 Wall Street hurried Charles E. Mitchell, chairman of the National City Bank; Albert H. Wiggin, chairman of the Chase National Bank; William C. Potter, president of the Guaranty Trust Company; Seward Prosser, chairman of the Bankers Trust Company. Together they represented six billion dollars of what the New York Times called “massed banking resources.” Their host was Thomas W. Lamont, Morgan’s senior partner.

Word of the meeting was enough to steady prices on the Stock Exchange floor. Traders with a sense of history recalled a similar meeting on October 24, 1907, when J. P. Morgan, E. H. Harriman, James Stillman, Henry Clay Frick, and other titans of the time had created a $25,000,000 pool which saved a plunging market. The eitler Morgan was dead now, and his son was in Europe. But the firm’s name was enough to raise hopes everywhere, as the information purred out over the news ticker.

At about twelve thirty, reporters were summoned to Lament’s office. With a perfectly straight face, he told them: “There has been a little distress selling on the Stock Exchange, and we have held a meeting of the heads of several financial institutions to discuss the situation. We have found that there are no houses in difficulty, and reports from brokers indicate that margins are being maintained satisfactorily.”

Lamont declared that the situation was being caused by a “technical condition of the market, rather than any fundamental cause.” He said that in many places “air holes” had developed in sections of the list. But the situation was “susceptible of betterment.”

What Lament meant by betterment was soon apparent on the Exchange floor. Though panic with its most awful leer was no longer in command, the situation could hardly be called rosy. In three hours, valuations had crashed by an incredible $11,250,000,000. At one thirty, into the maelstrom strolled Richard F. Whitney, vice president of the Stock Exchange and brother of a Morgan partner. Handsome, debonair, a noted huntsman, Whitney had aristocrat written all over him. He often traded on the floor for the House of Morgan. “They”—the creators of “organized support”—could have chosen no better representative. Coolly, Whitney made his way through the chaotic throng around Post No. 2, and in a loud but calm voice, bid 205 for 10,000 shares of U.S. Steel. This was the price of the last sale. He was in effect ignoring as beneath contempt those lower bids which had yet to find a seller, and laying out $2,050,000, some twelve points above the market.

Whitney got 200 shares and left the rest of his order with the steel specialist. Then, like a messenger from the gods, he strolled from post to post around the Exchange, and left similar bids for fifteen or twenty other stocks. It was obvious to everyone that the bankers were at work for “betterment.” They had, in fact, pooled some $30,000,000 to shore up the market.

Whitney’s gesture turned fear into faith. The Big Bull was not dead yet! Speculators everywhere rushed to catch the new advance. Within the hour, 200,000 shares of steel went at 205, General Electric rebounded 25 points, Radio 14, Montgomery Ward 24, A.T.&T. 24. The losing lady aboard the Berengaria recouped all but $40,000 of her losses by buying low on the revival. By 3 P.M. , when an impassive William Crawford struck the gong and ended trading, all but three billion dollars of the day’s losses had been recovered.

But the Bull’s frantic retreat had trampled thousands of small speculators before the bankers had been able to lash him forward again. One of the prime reasons for the morning’s vertical decline was the placement of countless stop-loss orders by brokers—orders calling for shares to be sold when their price dipped to a specified minimum. The brokers had to protect themselves when customers were unable to come up with more collateral for shares they had bought on margin. Each of these sell-out orders dumped more blocks of securities into the market, driving prices down to another dumping point. Each cascade carried countless hopes and dreams of opulence into oblivion. One broker told a Times reporter how he had been forced to sell out his closest friend.

In Seattle, Arthur Bathstein, secretary of a finance company, shot himself. In New York, realtor Abraham Germansky disappeared. He was last seen walking numbly down Wall Street, shredding a piece of ticker tape. Days later, he turned up in a sanitarium. One customer’s man told Edwin Lefèvre of a small trader who saw his life savings, $2,500—which he had pushed to $7,000—vanish on a second margin call. He went home and turned on the gas. Many who had been sold out sat dazedly in brokers’ offices still watching the lagging ticker, which did not finish its toll of the day until 7:08. Others sought consolation in Wall Street speakeasies, which did a roaring business.

In brokers’ offices also, business was roaring far into the night. A total of 12,894,650 shares had changed hands—a record which utterly overwhelmed the market’s ordinary machinery. Western Union reported that its cable and telegraph departments were swamped. Lights blazed in many offices until 5 A.M. Just across the river in Brooklyn, the St. George Hotel had 2,632 rooms occupied, and turned away hundreds. Many clerks—and their bosses—slept on their desks. Messengers and board-room boys, also kept on duty, wandered the streets in such unruly numbers that the police had to be called to control them.

In London, during these same hours, a wild scene erupted in Shorters Court, where dealers in AngloAmerican securities gathered after the London Stock Exchange closed at 4 P.M. Like New York’s old Curb Exchange, this was an open-air market, and there was a heavy rain falling when the news from Wall Street arrived. Ignoring the weather, frantic brokers milled about in the downpour, bawling, “Nickels sell,” “Columbias sell,” “Tractions sell,” while prices plummeted.

Meanwhile, on Wall Street, other brokers were trying to keep the Bull alive. At Hornblower & Weeks there was a midnight meeting of representatives from thirty-five top firms; among them they handled seventy per cent of the Exchange’s stock transactions. They agreed to tell customers in their market letters that selling had been “greatly overdone” and that the market was “fundamentally sound.” Hornblower & Weeks announced that it was republishing in eighty-five newspapers an ad it had first run in 1926: “We believe present conditions are favorable for advantageous investment in standard American securities.”

But these same brokers’ offices sent out a vast flood of margin calls. Everyone waited, with nerves more than a little ragged from uncertainty and lack of sleep, for the next day’s trading to begin. Grover Whalen dispatched no less than four hundred extra policemen and one hundred detectives to the financial district. Sight-seeing buses rerouted their tours to “see the excitement on Wall Street.” But there was no excitement. One reporter said the brokers returned to the floor on Friday morning with the calm of “veteran troops marching back to rest billets from the front lines.” Many had red eyes and sallow faces, but reports that the bankers were standing firm, and had been joined by George F. Baker of the First National Bank, did much to steady the market. From the White House, on October 25, President Herbert Hoover issued a statement that “the fundamental business of the country, that is production and distribution of commodities, is on a sound and prosperous basis.”

The psychological medicine seemed to work. “It was with a sigh of relief, extending from the Atlantic to the Pacific, that the opening prices were watched,” the New York Times reported. “The crisis appeared to have been successfully weathered.” Trading for the day was brisk—5,923,220 shares—but most prices fluctuated little more than a point. Saturday saw more of the same, while more prophets of the bull market radiated optimism. Charles M. Schwab, chairman of Bethlehem Steel, said there was no reason why prosperity would not continue indefinitely. James A. Farrell, president of U.S. Steel, solemnly concurred. Charles E. Mitchell said the trouble was “purely technical” and that “fundamentals remained unimpaired.” Alfred P. Sloan, Jr., chairman of General Motors, declared the break was “healthy.” In this chorus of cheer, few noticed the Governor of New York, Franklin D. Roosevelt, who told a church group in Poughkeepsie that improper schemes and questionable methods were being used in stock promotions. “Many investors,” he declared, “have lost sight of the real purpose of the Exchange in a fever of old-fashioned speculation.”

Actually, much of the tranquillity on Friday and Saturday can be attributed, in retrospect, to bookkeeping. Most brokerage offices worked day and night, and on through Sunday, to get their accounts under control. One firm estimated it lost $500,000 on Thursday alone from mistakes due to “the hellish rush.” By Sunday night, accounts were fairly up to date—and another flood of margin calls went humming out over the telegraph wires.

Monday dawned in a swirl of hopeful rumors. A mountain of buying orders had supposedly piled up in brokers’ offices over the weekend. Stocks were cheap, and the Monday papers were full of brokerage-house ads, urging juicy bargains on one and all. But no one was listening. In the Sunday silence, thousands of speculators, surveying the disasters of the previous week, had decided to get out while “organized support” made the getting moderately good. Still other thousands had received those margin calls, for which they had no ready cash reply.

Trouble appeared seconds after Monday’s opening gong. Steel was off 1 ½; International Tel. and Tel., 3; General Electric, 7 ½. From there the dying Hull slid crazily downhill, carrying blue chips down five and ten points an hour. By eleven o’clock the Exchange was as demoralized as it had been at the same hour on Thursday. Where was the “organized support?” At 1:10 P.M. word swept through the Exchange that National City Bank’s Charles Mitchell had been seen entering the Morgan offices. Steel, which had broken to 194, instantly rebounded to 198. But no Richard Whitney materialized, and Thomas Lamont told reporters he had no statement to make. Ten minutes later, steel was selling for 190, and in another hour had slipped to 188.

In the light of later developments, it seems probable that Mitchell, the most outspoken champion of the bull market in its heyday, was going to Morgan’s to negotiate a personal loan. He later admitted to inquiring senators that he had borrowed $12,000,000 from the House of Morgan in a desperate attempt to support his bank’s stock. As one reporter put it, the previous week had seen the “slaughter of the innocents.” Now it was the giants of the market who were being pounded to doom. The citizens of Guclph, Ontario, birthplace of Arthur W. Cutten, had long followed his every maneuver, and more than a few had grown prosperous. After Thursday’s debacle, one of his closest home-town friends had phoned him for advice, and the ex-wizard of the Chicago wheat market had advised holding on for an inevitable rise on Monday. Now the Guelphites were out an estimated $2,500,000, and Cutten actually phoned the local paper to deny any responsibility for the crash.

A other ex-wizard, Charles Topping, who had made $85,000,000 on Western Warehouses, began receiving threats on his life from ruined true believers. Asked about Milbank Mines, his latest bullish venture, which was teetering at 43, he said: “I’ll take all that is offered at 40.” It was soon plunging past 20, and Topping himself threw in his last million-share block for a terrific loss. There was scarcely a giant who did not turn ottt to have feet of very inferior day. Almost all the august bankers who had marched to the rescue on Thursday were later found to be suffering from severe financial wounds at the very moment they had uicd to save the day. Charles Mitchell narrowly escaped jail for selling 18,300 shares of his collapsing National City Bank stock to his wife when it was pledged as collateral for his loan from the House of Morgan. This secret transaction—he “bought” it back at 213 when it was selling at market for 40—enabled him to declare a loss of $2,872,305, thus wiping out all the income tax he owed on his one-million-plus salary, which he had poured into the market and lost.

The vaunted power of the investment trusts turned out to be even more mythical. When senators and other investigators finally pried open the trusts’ portfolios in 1932, ’33, and ’34, there was often little evidence of superior wisdom in men who bought, for example, $295,000 worth of bonds of the Kingdom of Yugoslavia, or 20,000 shares of the Kolo Products Corporation, which proposed to make soap out of banana oil. More important, managers of investment trusts showed far more interest in trying to support the stock of their own trusts, in which they had the bulk of their personal fortunes, than in any general support of the market as a whole.

By Monday’s three o’clock gong, values had fallen an estimated fourteen billion dollars—the steepest decline in the history of the market since the New York Times had begun keeping averages in 1911. Steel was at iHO; blue chips such as General Electric were off 47 ½, Allied Chemical 36. The ticker was 167 minutes late. Rut it mattered little to the thinning numbers of watchers in brokers’ offices, where a “curious hush”—similar to the atmosphere of a funeral parlor—prevailed. Most investors had long since been sold out.

At 4:30 P.M. the bankers convened once more at the House of Morgan. They talked for almost two hours—but the statement they gave reporters was not very reassuring. They flatly denied they had ever had any plan to support the market and protect anyone’s profits. All they had ever wanted was an “orderly trading market.” It was the no-bid “air holes” that disturbed them, and they were still determined to plug these whenever they occurred. But they had no intention of maintaining prices in an artificial manner. Organized support had suddenly become organized nonsupport. “They” were quietly admitting that the market was out of control.

But Wall Street simply could not believe it. The papers on Tuesday morning were full of reports that “huge funds” were expected in the market for “bargain buying.” An anonymous banker was quoted as saying the bankers’ group had concluded that “the psychological moment to bring the full force of its buying power to bear upon the market had now arrived.”

The first bids on Tuesday, October 29, exploded these last gasps of optimism. Blocks of stock were flung on the market for whatever they could bring, some 636,000 shares in the first twenty-six offerings. In the first half hour 3,259,800 shares gushed forth. Vast air holes developed, and no bankers appeared to fill them. Prices fell, fell, fell, with massive blocks offered again and again, spelling doom for some millionaire. Oddly, the brokerage houses were relatively deserted. The rich were being wiped out now, and they had facilities for suffering in private.

No longer did brokers attempt to protect favorite customers. The moment a client’s margin became thin, he was sold out. By twelve o’clock eight million shares had been traded, by half past one it was twelve million. Panic was total now. An office boy in a brokerage house offered one dollar for White Sewing Machine, which had once sold for 48. In the total absence of other bids, he got the stock for a dollar a share. On the floor and in the brokerage houses, exhausted clerical help began collapsing over adding machines and typewriters. In one odd-lot house, thirty-four girls fainted. Nineteen toppled in another office. Brokers themselves became hopelessly confused: after trading closed, one of them discovered, in a wastebasket beside his desk, a huge pile of sell orders he had intended to execute.

With organized support gone, and “they” getting hammered like bucket-shop suckers, there was only one thing to do—close the Exchange. Only the governing committee could authorize this; about noon, leaving singly or in small groups to prevent rumors and deeper panic, the forty or so members of the committee made their way to a small office just beneath the trading floor. Some months later, Vice President Whitney described the meeting: “[Most] of the Governors were compelled to stand, or to sit, on tables. As the meeting proceeded, panic was raging overhead on the floor. Every few minutes the latest prices were announced, with quotations moving … irresistibly downwards. The feeling of those present was revealed by their habit of continually lighting cigarettes, taking a puff or two, putting them out and lighting new ones —a practice which soon made the narrow room blue with smoke and extremely stuffy.” The only decision these shaken leaders of the Exchange could reach was to meet again later in the day.

So the slaughter continued. By the 3 P.M. gong, 16,410,030 sales had been recorded—three times what had been considered a fabulous day at the summit of the bull market. In the last fifteen minutes Richard Whitney, jaunty as ever, appeared on the floor and strolled toward the steel trading post. His appearance sparked a brief rally, which sent this bellwether limping from 167 to 174. But Whitney had nothing to offer except his imperturbable manner, and even this—an aghast Wall Street was later to learn—was a mask for a man who was already on the edge of bankruptcy.

Whitney’s sham heroism was typical of the unreality that now pervaded everything. People had lost fortunes so large that the sums were almost meaningless. The Fisher brothers dropped a reported $100,000,000. A public utilities titan was supposedly worth $880,000,000. As things began to slide, one bank president who was intimately involved with him was asked by one of his vice presidents: “What about that $880,000,000 fortune?”

“Well,” said the bank president, “there’s no sense in taking away a man’s whole fortune. Just remove one zero from it. He’ll never miss it.”

On Tuesday, when the bottom fell out of the financial world, the vice president brought the titan’s case before the president again. There was talk that the great man was bankrupt. The president, as beaten and bewildered as everyone else, shrugged: “Take off another zero.”

H. Allen Smith had just come to New York as a cub reporter. His city editor sent him down to interview Frank Vanderlip, another Wall Street wizard. The millionaire scowled when the uneasy young westerner asked: “Mr. Vanderlip, what does all this mean?”

“What do you think it means?” Vanderlip shot back.

“Mr. Vanderlip,” Smith gasped, “I’ve only just arrived in New York and I’ve got only ten bucks to my name as of the moment. I not only don’t know what it means—I don’t even know what it is!”

Vanderlip chuckled grimly. “The fact of the matter is that I don’t know what it means either. My friends don’t know what it means and probably nobody knows iust what it means.”

For many, the big collapse was all too real. David Korn, proprietor of a coal firm in Providence, Rhode Island, dropped dead while looking at a ticker on Tuesday afternoon. In far-off Valparaiso, Chile, a broker shot himself. But contrary to myth, there was no vast upsurge of suicides. The number of self-inflicted deaths in New York was actually lower in the autumn of 1929 than in that of 1928 (37 vs. 44). There were especially few suicides on Tuesday or the days immediately following.

Incredible as it seems in retrospect, there was still hope that the market could come back. The New York Times ’ Wednesday headline declared: “ RALLY AT CLOSE CHEERS BROKERS .” U.S. Steel announced a one-dollar extra dividend. Most Wall Street firms declared that the bottom had been reached, and sent out thousands of customers’ letters exuding optimism. Julius Klein, Assistant Secretary of Commerce, took to the radio to remind the country of “the fundamental soundness of the great mass of economic activities.” From Pocantico Hills, ninety-year-old John D. Rockefeller announced: “Believing that fundamental conditions of the country are sound … my son and I have for some days been purchasing sound common stocks.”

Eddie Cantor unwittingly caught the “air holes” in these hopes with his wisecrack on the Rockefeller statement: “Sure, who else had any money left?” Although the market rebounded 31 points on Wednesday, the big Bull was dead on his feet. With a few feeble rallies, stocks slid down, down until November 13, when the low for the year was reached. On that doleful day, the New York Times industrials stood at 224—almost exactly one-half the high of the year, 452, on September 3. Stocks fell an awful 82 points in the two weeks following the Rockefeller statement.

Several big plungers despaired during these bitter weeks. Robert M. Searle, president of the Rochester Gas and Electric Corporation, ex-office boy of Thomas Edison, took gas. He had lost $1,200,000. In New York, James J. Riordan, president of the County Trust Company, shot himself in the head. More numerous than the suicides were embezzlements. Charles E. Heitman, bookkeeper for Mackie Hentz & Company, was arrested for embezzling $209,000. He had lost it all, plus $75,000 of his own money. In Flint, Michigan, five officers of the Union Industrial Bank confessed to looting their reserves to the tune of $3,529,000, all gone the way of so many other paper millions. In Camden, New Jersey, a judge gave Samuel E. Worthington, twenty-eight, an officer of the Broadway Merchants Trust Company, only five years instead of ten for losing $75,000 of the bank’s money in the market, “because stocks offer a great temptation to people to gamble.”

Rumors of ruined millionaires spread everywhere. Michael J. Meehan, the genius of Radio’s rise, tried to scotch tales of his doom by cockily announcing to his office manager: “Jack, I understand I’m broke. Guess we’d better give all the boys in the office a two weeks bonus to prove it.” But Meehan would be driven from the Exchange as a pariah a few years later for manipulations that in the days of the Bull would have been greeted with admiring cheers. Samuel Insull, mightiest of the utility magnates, opened his twenty-million-dollar Chicago Opera House in November, after grandly guaranteeing to back the margin accounts of all his employees. In the mid-thirties he would be dragged off a dirty freighter near Greece and hauled back to Chicago to tell a jury how he had robbed Peter to pay Paul in a vain attempt to save his crumbling empire.

Optimism would continue to gush from Washington and Wall Street, but the nation’s economy had received a stunning blow. Thirty billion dollars—an amount equal to America’s entire bill for the First World War—had been annihilated. Though there would be rallies, nothing like the 1929 Bull would reappear on Wall Street for a long time. Nor would the prosperity it had so blithely encouraged be seen again for a grim decade. There were some who recognized the truth early. On November 3, L. H. Robbins wrote a wry ave atque vale in the New York Times:

As fall the leaves by Autumn blown, So fell those lovely shares I own. Forlorn, disconsolate I sing, Goodbye, goodbye to everything! To car and plane and gleaming yacht And rather ducal country cot That all seemed surely mine by Spring, Goodbye, goodbye to everything! Farewell, farewell for evermore To Paris, Carcassonne, Lahore Day trips are all I now can swing. Goodbye, goodbye to everything!