On this day in economic and financial history ...
The dangerous importance of Oct. 28, 1929, was not readily apparent to market-watchers in the middle of the action. As the Dow Jones Industrial Average (DJINDICES:^DJI) collapsed by more than 13%, a decline surpassed only once in its history, journalists wrote that Wall Street was "weed[ing] out speculative accounts and plac[ing] its house in order after the wild orgy of speculation ... which has taken place in the last five years."
The banking cabal led by what is now JPMorgan Chase (NYSE: JPM), established several days earlier in response to a record level of fear-fueled trading, offered no public statement, as it felt none was warranted . The bankers' silence only served to amplify the sell-off. Washington officials reiterated President Hoover's statement from the preceding Friday that business fundamentals were sound. An anonymous source close to the White House told The Washington Post that the hysterical trading action of recent days was "something of an indication that the depression would not be prolonged, even with reference to stock prices ."
More than 9 million shares were sold on Oct 28, 1929, the second-largest number in history up to that point. Many Dow stocks suffered terrible losses. AT&T (NYSE: T) lost $449 million in market value, General Electric (NYSE:GE) had $343 million of its market value destroyed, General Motors' (NYSE: GM) market cap shrank by $204 million, and U.S. Steel (NYSE:X) lost $142 million. These four bellwether stocks were responsible for more than 7% of the day's estimated stock market losses of $14 billion .
"Many level-headed bankers and brokers" that The New York Times interviewed "expressed the opinion after the market's close ... that the reaction had been overdone, and that many stocks were worth in excess of their open market price on the year's earnings alone." The Times continued: "It would be hard to find one in Wall Street who believed a month ago that any such situation as the present one would have been encountered ."
Those bankers and brokers changed their tune eventually. They would have no choice. There would be no stopping the Great Crash of 1929 now.
All tapped out
The unfortunate traders crowding the stock exchange floor in 1929 had no bars to visit after the end of the day -- at least not legally -- thanks to a vote that took place a decade earlier, on Oct. 28, 1919. The Volstead Act , created to enforce the 18th Amendment, had a tortured journey through the halls of American power. It passed with overwhelming majorities in the House and the Senate, only to be vetoed by President Wilson. The veto was immediately overridden by the House on Oct. 27, and a day later the Senate, by a vote of 65 to 20, made the Volstead Act law, ushering in the era of American alcohol prohibition.
Many breweries failed, as might be expected, and underground crime quickly stepped in to fill the void. Many large brewers, including Anheuser-Busch (now Anheuser-Busch InBev (NYSE:BUD)) , moved into producing other consumables out of the basic components of beer, such as yeast, ice cream, malt extract, and nonalcoholic "near beer." By one count, fewer than 20 pre-Prohibition breweries are still operating in the United States .
The first Macy's (NYSE:M) opened its doors on Oct. 28, 1858 . This was not the flagship Macy's location in Midtown Manhattan that's since become a world-famous landmark, but it served as the base of a growing retail empire until that flagship store opened in 1902.
Macy's grew into an American retailing icon from these humble beginnings, enhancing its stature through the elaborate Macy's Thanksgiving Day Parade, which began in 1924. Today, the Macy's brand welcomes shoppers into 799 stores across the country. Macy's also owns 48 Bloomingdale's stores , for a total of 847 locations, offering more than 150 million square feet of shopping space.
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