accelerated, with dramatic drops on October 16 (3.20 percent), October 18 (2.51 percent), and October 19 (2.83 percent), though punctuated by a rise on October 17But the first day of real panic was Thursday, October 24, when the market fell very abruptly from an opening of 305.85 to 272.32. Major New York bankers assembled at the offices of J. P. Morgan, and a senior Morgan banker, Thomas W. Lamont, told the press that “due to a technical condition of the market,” there “had been a little distress selling on the Stock Exchange.”
The public outcome of the meeting was that the vice president of the New York Stock Exchange, Richard Whitney, whose brother was a Morgan partner, went onto the floor of the exchange and made a series of bids aimed at stabilizing the marketThe first of these, a bid at a price of $205 per share for 10,000 shares of U.S. Steel, became one of the central collective memories of the New York marketThe market indeed went up again, although in the afternoon selling orders from across the country continued to stream in, and the Dow Jones Industrial Average closed at 299.47. The volume of share transactions, which earlier in the year had been in the one- to two-million range, was 12,895,000
An initial press comment for Thursday, October 24, emphasized the irrationality of imagination. The New York Times wrote: “At the climax of such a movement, the speculative imagination runs as wild as it does on the crest of an excited rise. Whereas it pictured impossible achievement in prosperity and dividends last August and last February, it now looks for equally impossible disasters.”Impossible? Sometimes it becomes possible.
Over the weekend, there was a brief pause for reflection, as commentators commented and moralizers moralizedThe result was an even more extreme panic on the following Monday (October 29), which continued on the Tuesday, with very high trading volumes (9,213,000 and 16,410,000 shares respectively)
On Monday, there was no repeat of Richard Whitney’s appearance and his stabilizing bid for U.S. SteelInstead, rumours about the continued bankers’ meetings suggested that they had agreed to a concerted selling of stockIn fact, indeed, New York banks did increase their lending to brokers dramatically at a time when out-of-town banks were calling in loans and foreign institutions were undertaking massive withdrawals
But on Wednesday, October 30, there was a dramatic bounce, with a gain of 12.34 percent and again exceptionally high trading volumes (10,727,000 shares). After that, however, bad news continuedOn November 2, it was announced the failure of the Foshay utilities company of Minneapolis, which owned companies in twelve statesAgain, the weekend was filled with rumours of the bankers’ committee liquidating stocksThe market slid down until, on November 13, the Dow Jones Industrial Average close was 198.69This was followed by a quite spectacular (but incomplete) recovery to 294.07 on April 17, 1930After this, there was a long slide, with fewer bounces, until the trough of July 1932, with a low of 40.56 on July 8
The panic of October 1929 was immediately exacerbated by the interruptions to communications