Many people believed the banker's intervention signaled the bottom of the market and that buying would begin again -- if investors had any money left. Comedian Grouch Marx was wiped out. He asked his broker, "Aren't you the fellow who said nothing could go wrong -- that we were in a world market?" "I lost all my money, too." replied the broker." "Don't let it get you down." said Groucho, "Just remember -- twenty years from now you'll be looking back on these as the good old days." He should have said twenty days, for the worst was yet to come.
Prices held on Friday and during the half-day Saturday session. But Monday the "world market" proved that it was too big for any group to control by plunging downward all day. On "Black Tuesday," October 29, 1929, waves of selling began anew and the bankers quit trying to stem the tide of defeat. General Electric opened at 245 and went straight down to 211; U.S. Steel slid back down past 200 and kept falling. In five hours $9 billion in stock values vanished like fog in the morning sun. A record 16 million shares traded on that day. By week's end the Commercial & Financial Chronicle wrote "The present week has witnessed the greatest stock-market catastrophe of all the ages."
The free falls stopped but the market continued sliding. On November 13, the Times industrials closed at 224, half the September 3 price of 452. Rallies appeared over the next three years, but the actual bottom was not reached until July 8, 1932, when the Times industrial average hit 58.
The New Era, like the Northwest Passage, remains one of history's great illusions. The Jazz Age generation thought they had created a great party that would go on forever, but they could not repeal the laws of economics or human nature. The Wall Street crash of 1929 set the stage; the 1930s would be grim indeed.
Sources:New York Times; Time; Wall Street: A History, Charles R. Geisst; The Age of Roosevelt, Arthur M. Schlesinger.
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