Also making a fool of himself with Fisher on this day was Mitchell, the chairman of Citibank. He said in a speech: "The stock price has been firmly rooted in the overall prosperity of the United States."
Princeton economist Joseph Lawrence also made a widely quoted comment when stock prices reached their peak: "Thousands of people have a consensus that their evaluation of that wonderful market, the stock exchange, is
Stocks are not yet overvalued."
Then he added, "Where are all those people who think they are smart enough to deny these wise popular judgments?"
The words of these self-righteous economists have deeply misled the general public, including veteran brokers such as George.
The stock market crash is not without warning.
Three days ago, on October 21st, Wall Street had just experienced Black Monday. The exchange was hit by a massive sell-off at the opening of the market. More than 6 million shares were sold throughout the day, so much so that the stock market's automatic recorder did not close until 1 hour and 40 minutes later.
The last transaction is recorded.
It is said that stock investors should smell the breath of danger from this, but the strange thing is that everyone still maintains an optimistic and enthusiastic mood, insisting that this is just an adjustment and the stock market will still move forward at a bullish pace.
George was no exception. He mortgaged his villa, car and a farm in California to buy stocks and advance client funds.
Because according to the unwritten practice in the industry, customers only need to pay 40% to purchase stocks, and the other 60% will be borrowed from the bank. The advantage of this is that they can obtain high handling fees.
Three minutes before the market left, his good friend Wilson, the famous agent, walked in and invited him to have lunch and talk about his Christmas vacation in Europe. George happily agreed.
"Dang——" the bell of the Wall Street Exchange rang.
As expected at first, the index followed the track of the previous day and climbed steadily and slowly, but the trading volume was slightly larger. George watched for a while and accompanied a real estate agent to the office to discuss investment business.
When they came out, they were stunned to find that the stock index dropped sharply, even more violently than three days ago.
The normal daily trading volume of the exchange is 2 million to 3 million shares, and the maximum was 6 million shares three days ago. But now more than 10 million shares flooded in within a few hours, but there was not a single buyer! Morning
At 11 o'clock, the stock index showed an even crazier scene, almost plummeting! The trading floor seemed to have become a madhouse, people panicked and frantically sold, sold, sold...
After all, George had been fighting in the stock market for more than ten years and was calmer than the average person. However, his hands and feet were cold and his whole body was weak. In just a few hours, his wealth had dropped from 6 million to 2 million, not counting the money he paid for his clients.
losses caused by the payment.
The secretary came over with a pale face and told him that Wilson committed suicide. He climbed to the top of the building and jumped off five minutes ago.
George hurriedly ran outside the exchange door, wanting to see his friend for the last time, but he saw the ambulance workers busy surrounding seven or eight bodies.
A total of 11 people committed suicide that morning, including bankers, stockbrokers, and investors.
George stumbled back to the office, locked the door, and looked through the drawers for a pistol.
Just when he turned on the safety of his pistol, a phone call saved him.
Witkin of Chase Bank, his immediate boss warned not to lose heart. Mitchell, the chairman of the Morgan consortium and National Bank, has convened a meeting with major consortiums and banks to prepare to join forces to rescue the market.
At 1:30 p.m., Whitney, the vice president of the New York Stock Exchange, put on a show and bid $205 per share to buy U.S. Steel stocks. Then the giants came up with a joint protective fund totaling $240 million to buy stocks at a price higher than the market.
.
After a lot of tossing, it finally ended in a draw. When George dragged his tired body home, he shrank from the cool breeze blowing in his face. He knew in his heart that the harsh winter of the stock market was coming.
The next day President Hoover issued a proclamation: "The basic enterprise of the United States, the production and distribution of commodities, is founded on sound and prosperous foundations."
The president who advocates the implementation of economic liberalism and laissez-faire came to the rescue, but failed to restore the confidence of frightened and severely damaged investors!
On October 28, "Black Monday", the index fell 49 points. On this day, the content discussed by the consortium giants was no longer to rescue the market, but to restrict everyone from selling stocks legally.
On October 29, "Black Tuesday", the index plummeted to 298 points, a cumulative drop of 22% from its highest point. The Washington Post described this day as the "worst day" in the 112-year history of the New York Stock Exchange.
Another friend of George, Mr. Wellington, had $7.5 million at the beginning of the year. As a calm and rational investor, he purchased $1.5 million in Liberty Treasury bonds and gave them to his wife, telling her that it would be the spending they would need in the future.
If one day he asks her for these bonds, it means that he has lost his mind and must not take them out.
On October 30, Wellington asked his wife for a margin call to protect the other $6 million he had invested in the stock market. Sadly, his wife was persuaded.
On November 5, Wellington lost $7.5 million and drowned two days later.
George was unable to attend his friend's funeral. He was as bankrupt as Wellington and had to repay more than $8 million in bank debt...
The whereabouts of all his clients were unknown, and he had no choice but to flee and secretly live in poverty in a small town in France.
Professor Fisher also lost millions of dollars in a few days and was deeply in debt. He survived for several years under the double blow of mental and physical illness and then died.
From 1930 to 1932, the stock market plummeted six times, with the Dow Jones Index falling to 41 points...
The stock price of U.S. Steel, which George held a large amount of, fell from $262 to $21 per share. The stock of General Motors purchased by Mellie, a female elevator operator at the exchange, fell from $92 to $7.
In this stormy stock market crash, many multi-millionaires and millionaires became poor overnight, and thousands of people suffered mental breakdowns and committed suicide by jumping off buildings.
The famous American humorist Will Rogers described it: "You have to queue up to get to the window and jump out."
The economic crisis triggered by the stock market crash has brought serious consequences, which can be summarized as follows: tens of millions of factories, banks have collapsed, and the number of unemployed people around the world has reached 32 million.
At this time, the ruthlessness of capitalism was fully exposed. On the one hand, a large number of workers were living on the streets, suffering from hunger and cold; on the other hand, in order to maintain the monopoly price, the capitalists shot a large number of livestock with guns and buried them, and threw the entire shipload of oranges into the sea.
Tons of milk were poured into the Mississippi River, and corn and wheat were used instead of coal for fuel.
Indeed, when the stock market crash spread irresistibly, historian Arthur Schlesinger Jr. exclaimed: "Capitalism has come to an end!"
Under the economic crisis, governments of various countries have internal and external troubles, and in order to safeguard their own national interests, they have strengthened trade protection measures and means, thus further aggravating the world economic situation...
After every major economic event occurs, a group of economists will inevitably emerge with inspiring words. They hold pipes in their mouths, frown, and tell people in a deep tone: I have foreseen that the stock market crash will happen a long time ago.
This is true for everything. Once it happens, you will know the inevitability of it happening.
At the beginning of the 20th century, the U.S. economy was booming, industry and commerce continued to expand, and people had more and more spare money in their pockets. Many people began to get involved in securities investment. Due to rising demand, stock prices continued to rise.
Huge profits attract more people into the stock market like a magnet, and the result is that the stock price is pushed up far beyond its actual value.
At this time, the president of General Motors expressed his views on the new era: "Everyone should be rich."
President Hoover also believed: "We are on the eve of achieving a decisive victory in the war on poverty, and slums are about to disappear from the United States."
Even the president is so optimistic, how can the common people not fall into fanaticism?
A speculative frenzy has arisen in the U.S. securities market, and "Whoever wants to get rich, buy stocks" has become a mantra!
People bought stocks like an obsession, dreaming of becoming millionaires overnight. Crazy stock speculation eventually led to an economic catastrophe.
Stock prices fell like an avalanche on the New York Stock Exchange, people sold their stocks hysterically, and the entire exchange hall echoed with screams of despair. This day triggered the U.S. economic crisis.
However, this was only the beginning of the disaster. More than 16 million stocks were sold in one day, and the average price of 50 major stocks fell by nearly 40%. Overnight, the "boom" scene evaporated, and a full-scale financial crisis ensued.
To: A large number of banks failed, companies went bankrupt, the market was depressed, and production dropped sharply; the number of unemployed people surged, and people's living standards plummeted; the prices of agricultural products fell, and many people were on the verge of bankruptcy.
An economic crisis of unprecedented scale finally broke out, and the "Great Depression" period in American history came.
All this is completely opposite to the scene described by Hoover when he was running for president in 1928! He once said: "Today, our United States is closer than ever to the final victory over poverty", predicting that "there is a pig in every pot"
Baby, there are two cars in the garage."
But it was soon ruthlessly shattered by the economic crisis. During the crisis, he tried to postpone the payment of reparations and war debts for one year, and also proposed a program to Congress to save the crisis, but he firmly opposed state assistance to the unemployed people and the homeless in the city.
The homeless people built simple shelters with wooden boards, old iron sheets, oilcloth and even kraft paper. The villages where these huts gathered were called "Hoovervilles", which was intended to mock President Hoover. In addition, the homeless people
Bags for food are called "Hoover bags", cars that are pulled by animal power because they cannot afford fuel are called "Hoover cars", and even the newspapers covered by homeless people sleeping on benches on the street are called "Hoover blankets"
.
There is a popular children's song on the streets of New York: "Melon blew the whistle, Hoover rang the bell. Wall Street sent a signal, and the United States rushed to hell!"
In 1929, the Great Crash in the United States and Europe began!