It began on Thursday, October 24, 1929. 12,894,650 shares changed hands on the New York Stock Exchange-a record. To put this number in perspective, let us go back a bit to March 12, 1928 when there was at that time a record set for trading activity. On that day, a total of 3,875,910 shares were traded. As you can see, Wall Street was a very, very busy place, as were markets worldwide. A big problem not mentioned so far in all this was communication.
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'The Timeline of Wall Street Crash of 1929'
The ticker tape machine had gone through great amounts of perfections since its early applications in the 1870s-80s by Edison and others. Even at telegraphic speed, the volume was having an effect on time. Issues were behind as much as one hour to an hour and a half on the tape. Phones were just busy signals on hooks. It was causing crowds to gather outside of the NYSE trying to get in the communication. Police had to be called to control the strangest of riot masses; the investors of business. It is not yet noon. The habit of lunch eased the panic somewhat and New York paused for a breath. There were rumblings of bargain grabbing to come in the afternoon, so maybe something could be salvaged. And it did comeback to regain much of the losses. For example, a stock like Montgomery-Ward opened at 83 and dropped to 50 and recovered to 74. This was typical for the big name companies.
On Friday, the mixture of margin call bargains combined with sells that were waiting from the late tickers on Thursday led to a bit of a gain. The trading was about 6 million shares. There was a short session on Saturday, which brought everything back to the level of Thursday. The weekend was indeed a welcome relief. It gave investors a chance to sort out their portfolios and plan for what might be a rough week. Others, though, had cleverly planned for the crash and kept their money out and were ready to pick up some real bargains. They got set up for even worse ruin.
On Monday, October 28, 1929, the volume was huge - over 9,250,000 shares traded. The losses were great as well. But unlike Thursday, there was no dramatic recovery; it was the prelude to Black Tuesday - the most infamous day in Wall Street history. There is a reckoning that occurs every so often in world history. It is a time when debts are paid, when wars are fought, when disease ravages and passes through a land, when the corn does not grow like it used to, or when the forces of nature itself delivers a brief catastrophic blow.
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On Black Tuesday, the reckoning of several years of boom, which was based in large part on credit, came due. There were to be 16,410,030 shares traded on that day. People were dumping their securities and causing even more downward pressure on the market. There were despondent stockbrokers, in tears hopelessly trying to get in touch with customers for margin. This time, the panic of selling made sure, once and for all, that there was to be no quick fix, that the recovery would be slow and painful. There was not nearly the recovery of gains seen on Thursday. The Dow Jones closed at $230 – down 23% from the opening of $299. The market had crashed.
