oct 24, 1929 - Black Thursday

Description:

A sharp, unexpected decline in stock prices began on the afternoon of October 23rd, about an hour before trading ended for the day, leading to a 4.6% drop in total market value. That night, many investors panicked and resolved to sell their shares as soon as possible. On October 24th, "Black Thursday", the market lost 11% of its value at the opening bell. In the first three minutes alone, nearly three million shares of stock, accounting for $2 million of wealth, changed hands. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, and so investors had no idea what most stocks were trading for. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

With the bankers' financial resources behind him, Whitney placed a bid to purchase 25,000 shares of U.S. Steel at $205 per share, a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. The tactic was similar to one that had ended the Panic of 1907 and succeeded in halting the slide. The Dow Jones Industrial Average recovered, closing down only 6.38 points (2.09%) for the day.

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