Wall St. Lays an Egg! 16 Million Shares Dumped; 'Permanent Plateau' Found to Have a Basement
The closing bell has rung on the New York Stock Exchange, and this reporter can confirm it is the only thing on Broad Street still holding its value. In a single session, a staggering 16,410,030 shares changed hands, a volume so far beyond the record that the clerks have stopped counting and started praying.
The Dow Jones Industrial Average has closed at 230.07, down 30.57 points, roughly 12 percent, on top of Monday's plunge of nearly 13 percent. Sellers outnumber buyers so badly that, by eyewitness accounts, some blocks of stock found no taker at any price at all, which brokers are calling "a soft patch" and everyone else is calling Tuesday.
The ticker tape, the nation's only reliable source of bad news, is running hours behind the trading floor. Investors across the country are therefore still learning how rich they were at lunchtime.
Only five days ago, on what traders already call Black Thursday, the city's great banks gathered at the offices of J.P. Morgan & Co. and pooled their money to steady the market. Acting Exchange President Richard Whitney strode onto the floor and bid $205 for U.S. Steel, well above the going price, and the panic paused. Today the panic has returned from its pause refreshed and with friends.
Crowds have massed outside the Exchange at Broad and Wall, staring up at the building as if it might issue an apology. Police report the mood as "orderly, grim, and deeply interested in whoever is holding the margin calls."
Economist Irving Fisher of Yale, who declared barely two weeks ago that stock prices had reached "a permanently high plateau," could not be reached for comment. Sources say he is surveying the plateau from below.
In Washington, President Herbert Hoover is expected to reassure the nation that business is fundamentally sound. Business, asked for confirmation, has requested a moment to sit down.
I Bought on Margin So You Wouldn't Have To
Friends, I was told the market only goes up. I was told this by my broker, my barber, and my shoeshine boy, who between them hold more tips than a busy waiter. I put down ten cents on every dollar and borrowed the rest, as any sensible modern man does.
Now I am told that "margin" means the broker would like the other ninety cents back, at once. I maintain that the fundamentals are sound. I simply no longer own any of them. I have every confidence in American industry, and I would like to borrow a nickel from it.
On Tuesday, October 29, 1929, a record 16.4 million shares traded on the NYSE and the Dow fell 30.57 points (about 12%) to 230.07, following a nearly 13% drop the day before. Black Tuesday capped a panic that began on Black Thursday, October 24, and the market kept sliding until July 1932, losing about 89% from its 1929 peak. The crash helped trigger the Great Depression, and the one-day volume record stood for nearly 40 years.