1929 - Commerce

Commerce

New York financier Paul Warburg, now 59, issues a warning in January that sharply criticizes the "present orgies of unrestrained speculation" on Wall Street. Few people listen.

Former U.S. senator Oscar W. Underwood of 1913 tariff-law fame dies at his Virginia home January 25 at age 66.

New York reports February 3 that business girls average $33.50 for a 50-hour week, but wages will soon drop. The Department of Labor's Women's Bureau demands in July that housewives be included in a federal census on employment.

British unemployment tops 12.2 percent, with more miners and workmen idle than in the General Strike of 1926.

Textile factory vigilantes at Gastonia, N.C., murder organizer and songwriter Ella Mae Wiggins, 23, September 14 and suppress a strike.

Textile pioneer J. P. Stevens dies at Plainfield, N.J., October 29 at age 61.

Wall Street's Dow Jones Industrial Average closes at 327.08 May 4. The Curb Exchange trades more shares than the New York Stock Exchange for the first time June 15 as speculators buy on margin. The Dow falls below 300, but rebounds to peak at 381.17 September 3; a seat on the New York Stock Exchange sells for a record high of $625,000.

"Stocks have reached what looks like a permanently high plateau," says Yale economist Irving Fisher October 17, but trading is dominated by pools whose managers rig the market; the Dow breaks in October following a drop in U.S. iron and steel production and a rise in British interest rates to 6.5 percent that has pulled European capital out of the U.S. money market. The Dow falls 508 points (22.61 percent) October 19, 38.88 points (12.82 percent) October 28, and a record 16.4 million shares trade October 29, as the Dow plummets another 30.57 points (11.73 percent); liquidation continues despite assurances by leading economists that no business recession is imminent. The Dow drops another 25.55 points (9.92 percent) November 6, but although there are reports of speculators jumping out of windows, no such report will be substantiated. More than 99 percent of Americans own no stock (only 1.3 million people do), but speculators who have bought on 10 percent margin are forced to sell, and $30 billion disappears—a sum almost equal to what the 1914-18 war cost America (Charles E. Merrill of Merrill, Lynch has anticipated the crash and saves his customers $6 million).

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The crash of New York Stock Exchange values wiped out many investors and began a decade of economic depression.

Many investors blame the Wall Street crash on speculator Jesse L. Livermore, now 52, who has 30 telephone lines linking him to brokerage houses (see 1925). But Livermore went short the market during the summer, several months too early, and has gone broke (see 1934).

Seventy-one percent of U.S. families have incomes below $2,500, generally considered the minimum necessary for a decent standard of living. The average weekly wage is $28 (see 1932). The Wall Street crash ends a 9-year period that has seen unemployment drop from 12 percent to 3.2 percent; the economy has grown at an annual rate of 3.6 percent, the national debt has shrunk from $24 billion to $16 billion, the federal budget has run a surplus every year, and inflation has dropped below 1 percent, but unchecked speculation has caused the economic bubble to burst.

Edsel Ford announces an increase in the minimum daily wage at Ford Motor Company plants December 2. It rises from $6 to $7, but wages in virtually all industries will soon decline (see 1933).

Wall Street's Dow Jones Industrial Average closes December 31 at 248.49, down from 300 at the end of 1928; much worse is to come.