“Those who deny history are doomed to repeat it”. Churchill.
In 1907, the crash immediately preceding the one prior to the 1929 Depression, John Pierpont Morgan is credited with personally saving the financial system when he led a band of capitalists in infusing private capital into a doddering stock market. The loans were repaid and America went about its business in due course. Since then, various US governments have repeated his actions but, sadly, using your money and mine to bail out crooks both on Wall and Main Streets.
So after yesterday’s greatest ever one day percentage decline in the Dow index, it seems only appropriate to recall how Wall Street (or, more correctly, Broad Street) looked back then.
A magnificent picture of the limits of greed. Photographer unknown.
The building at left – 23 Wall Street – served as J. P.Morgan’s headquarters until the 1990s when it was sold and converted to residential housing. It’s at the corner of Broad (where you can see the Stock Exchange) and Wall (not visible, Wall is behind you). Morgan purposely limited its height to two stories as the ultimate statement of WASP wealth and power.
I was lucky that the Morgan Bank was my client in the 1981-1983 period but less lucky with my assigned seating in the Board Room, which has to have had one of the longest tables ever made. For some reason the usher always insisted on seating me right opposite the glowering, mutton chopped oil of JP himself, staring down on me from Protean heights. To this day all I can remember of those tedious and boring meetings is Morgan’s censorious glare. We could use him today.
If you continue west a few yards on Wall Street you come to Trinity Church, burial place of America’s first and greatest Treasury Secretary, Alexander Hamilton. I used to visit it often. Each time I would pass the shoeshine boy outside the Church and was always reminded of the (perhaps apochryphal) tale attributed to financier Bernard Baruch who, upon receiving a stock tip from the boy in early 1929, promptly went out and sold all his shares. He survived the Depression and prospered mightily. When asked his secret, Baruch honestly responded “I made my money by selling too soon”.
In January 2008 I followed Baruch’s advice.
Schadenfreude? No. Churchill. “Those who deny history are doomed to repeat it”. Though I suppose I should add that WSC was wiped out in 1929 ….
Strange that many years later I would end up working for America’s other great Treasury Secretary, Bill Simon, but that’s a story for another time.
Very good read. I’m not positive but I think yesterday was the Dow’s largest Point decline not percentage decline. Then again, I’m a knucklehead.
You are correct, Tom, the error is mine. Thanks for pointing that out.
From the WSJ today:
“The Dow Jones Industrial Average’s plunge of 777.68 points Monday represented a 7% decline in the index, far from a record in percentage terms. But there is some confusion about which trading session did set the record for percentage decline.
Several sources point to December 12, 1914, when the New York Stock Exchange reopened after a four-and-a-half-month closure at the outset of World War I. Historical data show that the industrials closed at 54 that day, after having closed at 71.42 on July 30, the previous session. That’s a percentage decline of 24.39%, greater than runner-up Black Monday’s 22.61% in 1987.”