On the morning of October 24, 1929, stocks trading on The New York Stock Exchange open at higher prices than on the previous day, but this positive state only lasts for an hour. After some initial buying of "bargains," the most terrifying stampede of selling ever experienced on the New York Stock Exchange takes over. "The tumble was almost perpendicular .... to new and unplumbed abysses of low price levels" (The Seattle Times, October 24, 1929).
Shrieks and Howls
In Seattle brokerage houses there was "tenseness" throughout the day. At times the sell-off of New York Exchange stock was "almost hysterical" (Seattle P-I, October 26, 1929).
"Traders on the floor of the [New York] Stock Exchange shrieked and howled their offers for desperate minutes before they found takers. Such a roar arose from the Stock Exchange floor that it could be heard for blocks up and down Broad and Wall Streets. ... The torrent of selling orders poured into the market over the congested private wire systems of commission houses from all cities of the country, over telephone and telegraph wires, and came from abroad by cable, radio, and trans Atlantic telephone" (Seattle P-I, October 25, 1929).
The biggest losers were stock market speculators who purchased stock on margin. They would buy stock from a broker for a small percentage of the value of the stock, in effect receiving a loan from the broker. They would not have to pay the balance until they sold the stock. This meant that a small increase in the price of stock resulted in immense profits for the speculator. But if the stock declined more than the percentage they had put down, the speculator would have to cover the difference or lose their stocks along with the margin down payment they paid. On October 24 the stocks plummeted so drastically that many margin investors found their investments wiped out.
"It was almost impossible to force one's way into some of the Seattle board rooms where New York stock prices were displayed. The ticker was two and a half hours behind and what stocks really were selling at was impossible for local traders to ascertain" (Seattle P-I, October 25, 1929). "Men put in orders to buy without having much idea what the market was or how close they might get. [A Seattle] broker reported that a customer ordered 1,000 shares of Packard Motor [willing to pay] a maximum of $20 and really bought it at $13.50, the day's low" (Seattle P-I, October 25, 1929).
Many Fortunes Lost
Most of the sell off was in the morning. A few examples of the volatility of stocks: during October 24: Sears Roebuck stock prices ranged from $140 to $115 per share (68,700 shares sold during day); United Aircraft from $84 to $60 (42,100 shares sold); Canada Dry Ginger Ale from $80 to $60 (10,800 shares sold); International Telephone and Telegraph from $114 to $79 (160,200 shares sold); Montgomery Ward (Department Store and Catalog sales) from $84 to $50 (338,700 shares sold); Richfield Oil of California from $33 to $20 (40,600 shares sold); and Safeway Stores from $158 to $139 (15,400 shares sold).
Many fortunes were lost in the onslaught. Although it was not "officially verified," reports circulated of one Seattle investor who had invested in 10,000 shares of International Combustion Engineering at about $50 per share. When the stock reached a high of $102.50 per share earlier in the year he had earned a paper profit of $500,000. By October 24, 1929, his half million dollar "profit" turned into a $300,000 loss when the stock plummeted to $18.50 per share (Seattle P-I, October 26, 1929).
In the afternoon some major New York City banks for the first time pooled their resources and bought into the stock market to keep the stocks from free falling in value any further. The prices of most stocks rebounded to near the day's opening prices. The total of 12,894,650 shares sold during the day beat by more than 50 percent the previous record set on March 26, 1929 (8,246,740 shares sold).
The volatility at the New York Stock Exchange was not experienced at the Seattle Stock Exchange, a clearing-house for local stocks, located in the Exchange Building at 821 2nd Avenue. During the day few stocks traded and those that sold took only a slight drop in value. Apparently the holders of local stocks took a wait and see attitude.
No Real Depression?
C. B. Blethen, Editor and Publisher of The Seattle Times, wrote an editorial printed on the front page of the October 27 Sunday paper. Headlined "WALL STREET CRASH TO CAUSE NO DEPRESSION" Blethen concluded his editorial with: "Business is all right. There will be no real depression. What little disturbance there will be will pass off in a very few weeks. Seattle, instead of being hurt, probably will be greatly benefited by the dissipation of the confusing smoke of stock inflation and speculation" (The Seattle Times, October 27, 1929).
On Tuesday October 29 and the months that followed that conclusion would be tested, and proven wrong.
