Sunday, March 8, 2009

Black Thursday

October 24, 1929, now called Black Thursday, was the initial crash of the stock market that would extend to October 28-29, 1929, respectively known as Black Monday and Black Tuesday. Yet, the initial crash on Thursday had no way of foreseeing greater losses in the stock market. The New York Times reported on October 24, 1929, front page headline exclaiming “PRICES OF STOCKS CRASH IN HEAVY LIQUIDATION, TOTAL DROP OF BILLIONS.” Immediately, the large font grabs the reader’s eye. The font is huge in comparison to other headlines of its day. Another interesting point is that under the headline there are several mini-headlines before the article begins: “PAPER LOSS $4,000,000,000”; “2,6000,000 Shares Sold in the Final Hour In Record Decline.”; “MANY ACCOUNTS WIPED OUT”; “But No Brokerage House Is in Difficulties, as Margins Have Been Kept High.”; “ORGANIZED BACKING ABSENT.”; “Bankers Confer on Steps to Support Market- Highest Break is 96 Points.” My only explanation for the sub-headlines is they serve to give a quick summary of the major issues covered in the article so the reader does not necessarily have to read the entire article, which is pretty lengthy.

One thing that struck me as odd was the absence of a by-line, but after consulting Discovering the News, for this time, it was quite common to omit a by-line, unless it was international correspondence. The story opens with a hard news lead, citing the “avalanche of selling” as responsible for “one of the widest declines in history.” Much like an inverted pyramid, the article tackles “Loss In Market Values” after the lead, getting out figures and numbers, the “facts”, before delving into analysis and impact. For a breaking news story, I would agree that getting estimated numbers such as shares and losses in the top of the story, as that is what most want to know about. The article is semi-chronological, leading with the important facts, then recounting the “Crash in Final Hour.”

Since most of the statistics used in the article are about stocks and shares, which are “listed on the Exchange”, there is not a whole lot of attribution in the story. It is assumed data on stocks are from their respective exchanges and public. Several grafs down, The New York Times is attributed with statistical averages, but it is not until the second page of the story that the readers finds out who has been interviewed. Bankers and heads of banks were interviewed, such as Charles E. Mitchell, head of the National City Bank, as was the president of one of the largest groups of investment trusts. Most of the reporting seemed to be down from a observational stance, noting how things appeared on the floor of the stock exchange. While the article ends with the revelation that “some of the leading bankers of the city were in a conference after the close of the market yesterday, discussing the desirability if some assuring word,” but no word was made. What is interesting about the article is that it did not foresee what we all now know happened. The president of the groups of investment trusts, who never gave his name, “predicted that any period of depression would be of comparatively short duration, and next year many issues would seep to new high marks, he said.”

The crash on October 24, 1929, as reported by The Washington Post, was also front page news, headline reading, “$3,000,000,000 LOST WHEN STOCKS CRASH”, with sub-headlines reading “Most Hair-Raising Drop in Recent History Comes in Last Hour.” and “MANY ARE WIPED OUT.” The figures vary from The New York Times coverage, yet in breaking news, I think that tends to happen. The article is also smaller than in the NYT, with a majority of the front page, four columns, devoted to “NEW YORK STOCK EXCHANGE TRANSACTIONS OF YESTERDAY.” While both stories covered the fact a majority of the losses were experienced between the hours of 2 p.m. and 3 p.m., The Washington Post places that fact high-up in the lead. Similar to the NYT article, this article downplays the crash’s long-term affects. Also similar to the NYT article, some of the sources remain anonymous, instead referred to as “a senior partner in one of the largest commission houses.” The rest of the content is similar to that seen in the more in-depth NYT article. Record loses in the summer precede the crash, nerves affecting sellers and statistics.

Clearly this is reminiscent of the down-turned economy our nation faces today. Many of the remarks made in this article seem like they could be talking about our economy and the current stock market, especially after the recent drops last week. An interesting point made in the NYT article cited a “decline in iron and steel production, in automotive production and in building operations” from the previous summer, as an indicator of strategic selling, when trying to figure out why some stocks saw more selling than others. With the decline the automotive industry has seen in the last year alone, one must wonder if there is anything we can learn from history to aid our current situation.

"PRICES OF STOCK CRASH IN HEAVY LIQUIDATION, TOTAL DROP OF BILLIONS." New York Times. ProQuest Historical Newspapers. Leonard Library, San Francisco. 5 Mar. 2009 .

"$3,000,000,000 Lost When Stocks Crash." The Washington Post. ProQuest Historical Newspapers. Leonard Library, San Francisco. 5 Mar. 2009 .

No comments:

Post a Comment