An anniversary approaches

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As I’ve not­ed here ear­li­er, the blog newsfrom1930 per­forms a very valu­able “real­i­ty check” for today by each day pub­lish­ing a sum­ma­ry of the Wall Street Jour­nal from the same day in 1930. The over­whelm­ing flavour of reports from that time is that the Depres­sion was over and recov­ery was immi­nent. Plus la change…

This week it’s offer­ing anoth­er service–publishing sum­maries of news reports from one year ear­li­er: 1929. The rea­son, of course, is that we are approach­ing the 80th anniver­sary of “Black Tues­day”: the day in 1929 when the Dow Jones fell for more than 10 per­cent for a sec­ond day in a row, bring­ing to an emphat­ic end the bull mar­ket of 1929 and ush­er­ing in the Great Depres­sion.

Newsfrom1930’s cov­er­age began on Octo­ber 24th, since the mar­ket’s seri­ous fall real­ly began the day before with a 6.3% drop (which was duly report­ed in the next day’s Wall Street Jour­nal).

The entire blog post on Octo­ber 24th 1929 is repro­duced below, but I do rec­om­mend read­ing it in the orig­i­nal as well:

Thursday, October 24, 1929: Dow 305.85 ‑20.66 (6.3%)

One year ago today:

[Note: Your reg­u­lar­ly sched­uled 1930 news will be along lat­er in the day, but first a com­mem­o­ra­tive spe­cial. This day in 1929 was rough­ly the start of what’s known as the Great Crash, which last­ed about a week. I’m going to give a quick sum­ma­ry for each day, to give an idea of how it played out. As with the 1930 news, the sum­ma­ry is from the WSJ on each day in 1929, so it describes the action from the pre­vi­ous day. So the fol­low­ing describes Wednes­day, Oct. 23 — note this is not one of the leg­endary “Black” days yet.]

Mar­ket wrap: Bears resumed aggres­sive oper­a­tions, “combed the list dur­ing the morn­ing for issues in a weak­ened state,” attack­ing Beth­le­hem Steel, Hahn Dept. Stores, Hayes Body, and oth­ers. Sell­ing spread to the main trad­ing stocks in the noon hour, pick­ing up momen­tum on increas­ing vol­ume as the after­noon pro­gressed; many stop-loss orders hit; lead­ers includ­ing Radio, US Steel, GE, and West­ing­house broke sharply. “Sell­ing took on a pan­icky char­ac­ter” in the final hour; “pan­de­mo­ni­um reigned around the posts at which active stocks were trad­ed”; 2.6M shares were trad­ed in the final 50 min­utes, or about 40% of the total day’s vol­ume of 6.4M; the tape ran almost 2 hours behind and price breaks were excep­tion­al­ly wide.

Prof. I. Fish­er of Yale Univ. defends stock mar­ket rise of 100% since 1923, says based on increas­ing pros­per­i­ty due to many fac­tors, includ­ing more sta­ble mon­ey, new sci­en­tif­ic man­age­ment, new inven­tions, Pro­hi­bi­tion [Note: huh???]; believes pub­lic spec­u­la­tive mania is least impor­tant fac­tor in the rise. Con­cludes by crit­i­ciz­ing cap­i­tal gains tax.

Bond mar­ket has been ral­ly­ing as stocks decline recent­ly.

Some com­mod­i­ty prices: Wheat over $1.25, corn over $0.90, cot­ton 19 cents, cop­per 18 cents.

Rail freight load­ings for the week end­ed Oct. 12 were down 11,121, or about 1%, from 1928, vs. 7,985 decline prev. week.

Steel trade reviews report decline in pro­duc­tion appears to have hit bot­tom, with all depart­ments except auto­mo­tive active.

Sen­ate refus­es to clas­si­fy avo­ca­do as pear for tar­iff pur­pos­es.

Some­what lat­er in his­to­ry, anoth­er impor­tant event occurred–the elec­tion of Franklin D Roo­sevelt as US Pres­i­dent, and the begin­ning of the New Deal poli­cies in 1933. I was remind­ed of this by a quote on pro­gram out­line for the Green New Deal con­fer­ence that I attend­ed yes­ter­day. Nor­mal­ly we only see the “the only thing we have to fear is fear itself” quote, but that pro­gram excerpt­ed a rather more rel­e­vant obser­va­tion of Roo­sevelt’s on what had caused the Great Depres­sion:

Yet our dis­tress comes from no fail­ure of sub­stance. We are strick­en by no plague of locusts. Com­pared with the per­ils which our fore­fa­thers con­quered because they believed and were not afraid, we have still much to be thank­ful for. Nature still offers her boun­ty and human efforts have mul­ti­plied it. Plen­ty is at our doorstep, but a gen­er­ous use of it lan­guish­es in the very sight of the sup­ply. Pri­mar­i­ly this is because the rulers of the exchange of mankind’s goods have failed, through their own stub­born­ness and their own incom­pe­tence, have admit­ted their fail­ure, and abdi­cat­ed. Prac­tices of the unscrupu­lous mon­ey chang­ers stand indict­ed in the court of pub­lic opin­ion, reject­ed by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pat­tern of an out­worn tra­di­tion. Faced by fail­ure of cred­it they have pro­posed only the lend­ing of more mon­ey. Stripped of the lure of prof­it by which to induce our peo­ple to fol­low their false lead­er­ship, they have resort­ed to exhor­ta­tions, plead­ing tear­ful­ly for restored con­fi­dence. They know only the rules of a gen­er­a­tion of self-seek­ers. They have no vision, and when there is no vision the peo­ple per­ish.

The mon­ey chang­ers have fled from their high seats in the tem­ple of our civ­i­liza­tion. We may now restore that tem­ple to the ancient truths. The mea­sure of the restora­tion lies in the extent to which we apply social val­ues more noble than mere mon­e­tary prof­it.

It’s a great speech, and I rec­om­mend read­ing it in its entire­ty. We’re also very for­tu­nate to have ready access these days to orig­i­nal doc­u­ments like this via the Inter­net.

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