ON MONDAY, OCTOBER 28, 1929, in the final few minutes before the market closed, three million shares were traded, most of them sell orders. The greatest losses to Finn’s extensive and varied investments occurred in those last few minutes of trading. The damage was staggering. The market fell 13 percent on Monday, the largest single-day fall in Wall Street’s history. American companies lost some $14 billion of their value in one disastrous day of panic selling.
The high for industrials as a block had been 469.49 on September 19. Finn soared on that like a bird in flight. He viewed the small correction that followed as a massive buying opportunity and leveraged an enormous amount of his investment accounts to buy thousands of shares of industrial stock on margin at $430 a share.
Yesterday, the block closed at 315, a collapse of 154 points overall, and 49 points in one day.
At eight o’clock on Tuesday morning, having managed only a few hours’ sleep with his head on his desk, Finn tried to get in touch with Barney, but no one picked up. Finally, at 9:30, half an hour before the market opened, someone answered the phone. That person was not Barney, but Terrence, who worked in the office next door. Terrence told Finn that Barney was not in yet.
“That’s impossible.”
“A lot of things are impossible these days,” said Terrence. “Are you Finn?”
“Yes, why?”
“There is a note for you on Barney’s desk,” Terrence said. “In large block letters it says: ‘FINN—SELL EVERYTHING AT WHATEVER PRICE YOU CAN GET.’ The word ‘everything’ is underlined five times.”
“But the market hasn’t opened,” muttered a stunned Finn. “Why would he say this? Terrence!”
“Don’t shoot me,” Terrence said before he hung up. “I’m just the messenger.”
Herbert Hoover, the President of the United States, announced that he wasn’t going to be at the White House on Tuesday. How serious could the market crash be if Hoover isn’t even at his desk, Finn thought with a tiny bit of hope. Then he heard the president was attending a funeral, and knew that his hope had been misplaced.
A minute after the ticker machine began printing, Radio was down to 40. It had been 114 in September. Finn bought it at 110. He didn’t want to sell Westinghouse yesterday, when it was 140, because he had paid 180 for it. Now it was at 120. It was only 10:05 am. The market had been open five minutes.
No one thought they would see the day when Steel would drop below 200. Yesterday it closed at 186. Today, ten minutes after the opening bell, it was at 180.
Barney called. “No one is interested in Steel, even at 179,” he said dully. “Did you sell?”
“No.”
“Mr. Evans!”
“Where have you been?”
“Buying a bus ticket to Chicago. I’m giving my notice,” said Barney. “I thought I would impress my mother with my fancy job, but I’ve lost her life savings instead. I’m getting out while I can still afford a bus ticket.”
Finn wanted to argue, but couldn’t. He almost wished he himself could buy a ticket to another state and steal off unnoticed.
“Before you ask me, I’ll tell you,” Barney said. “Yesterday’s volume at this time was 800,000 shares. Today, it’s three million.”
“I wasn’t going to ask you.” Finn felt like he was being physically beaten.
“Radio is at 30.”
“It was at—”
“It doesn’t matter where it was.” Barney’s voice was emotionless. “That’s where it is now. Get off the phone, Mr. Evans, and call Lionel. The longer you wait, the worse it will be for you and your bank. You can’t get out of this. No one is getting out of this.”
“Wait, I have something—”
“This morning at 10:03, more than 650,000 Steel shares were dumped on the market,” Barney said. “No one wanted to buy them.”
All Finn could say to this was, “It’s still morning.”
“Really? Because it feels like the middle of the darkest night,” said Barney. He described the funereal silence that hovered over the trading floor. Yesterday they were howling wolves. Today they were mute.
“Are there any bright spots?” Finn asked. “Any at all? Can you give me one thing?” Please, he almost added.
“A broker was screaming so loud earlier while hammering Radio down at Post 12, he lost his dentures on the trading floor,” Barney said.
“That’s your bright spot?”
“He found them again,” said Barney. “But while we are talking, Radio has fallen to 26.”
“Barney . . .”
“How much did you pay for IBM two years ago?” Barney asked.
“Back then, I paid 95 or 96 for it. Why?”
“There’s your bright spot. Today it’s 125. I mean, it’s down from 241 in September, but you didn’t lose everything.”
“Barney,” said Finn, “is that the best you got? Because I bought fifty thousand IBM at 237, and another thirty at 200.”
“How many at 95?” said Barney.
“Fifty thousand.”
“You see?” Barney said. “You can crawl out of it. But while we’re sitting here chatting, IBM has dropped to 120. And Radio is now at 25. Spit-spot, Mr. Evans. Westinghouse is losing two dollars a minute. At this rate it will be worthless by the time you call Lionel. How many Westinghouse do you have?”
“Twenty fucking thousand,” said Finn, hanging up.
An hour later, Finn finally called Lionel. The ticker tape was already ninety minutes behind. It still had Steel at 185. Finn sat down at his desk with the door shut. And not just his office door. At 11:15, Finn was forced to close the bank. He had eight hundred customers trying to take money out of their accounts. One by one, then two by two, and then in groups of ten, he had to explain to his tense, superficially calm depositors how it wasn’t in their best interest to take their money, and then he had to explain why he didn’t have their money. They became less calm. He tried to explain that he kept only a small portion of their deposits in the vaults. This was how the business of the bank was run, he told them. Of any bank. The rest of the deposits he lent out to others, or invested. “Invested so I could give you that great interest rate you’ve been getting all these years on your savings accounts. Where do you think that savings rate comes from?”
They didn’t care. They wanted their money.
He tried to explain that many of those clamoring at his doors owed him money. For some reason, this was difficult for him to explain and difficult for them to understand.
“Mr. Harris, I don’t see what you don’t see.” Finn didn’t shout, he didn’t raise his voice. He knew his raised voice could easily trigger a cascade to mass hysteria. So he kept his tone carefully modulated, even though inside, he was anything but. “Mr. Harris, please don’t shout, sir. Let me try again. You have two thousand dollars in your savings account, correct, which you’re trying to withdraw. But at the same time, you have three loans with the bank, totaling seven thousand and seven hundred dollars. One of those loans is a secured loan with stocks as your collateral. This morning, the five hundred shares you have securing that loan have lost nearly 90 percent of their value. So you must now either pay the difference on that collateral, or the loan will be in default.”
Mr. Harris shrugged. “What’s it to me? So, my loan is in default. Sell my shares.”
“Selling them will only cover about 20 percent of what you owe me.”
“How much could they have possibly dropped by?”
“It’s hard to tell, Mr. Harris, because this morning the Dow Jones ticker is already more than an hour behind.” Finn spoke in measured tones, but he felt his legs going numb. He wasn’t thinking about Mr. Harris’s sinking stocks. He was thinking about his bank’s. And his own.
Harris shrugged again. “You’re a good man, Mr. Evans. But who’s to say you’re going to meet your own margins today? By the pallor on your face, I reckon you have some looming. How do I know you won’t take my few measly thousand to save your own hide? I know I would. Just give me my money, and I’ll be on my way.”
Thus, at 11:15, Finn had to close the bank. His cash reserves were dangerously low. He kept about a million dollars on hand. Half of it had already vanished to the likes of Mr. Harris.
When Lionel answered the phone, he sounded half dead.
“Nothing is good in the world, Lionel,” Finn said, failing to keep the terror out of his voice.
“Finn, that is most certainly fucking true.”
They were quiet.
“Steel has fallen to 175,” Finn said, trying to be matter-of-fact, but his voice was hoarse. “As soon as the market saw that, the bottom dropped out of everything. Steel is an avalanche. It’s taking everything down with it.”
“Oh, Finn, if only Steel were at 175,” said Lionel. “Ten minutes ago it was at 166.”
To keep himself from groaning, Finn squeezed the receiver. Any harder and either it would break or his fingers would.
“What did we buy it at?”
“Our average price was 220.”
“Sell it, Lionel,” Finn said. “Or we will have to close my bank and your brokerage. It’ll take us down with it too.”
“You think I haven’t tried?” Lionel said. “I can’t find buyers at any price anymore! Forget sell at market. Hah! Would that I could sell at market. I would be a lucky man. I can’t make a bid low enough for anyone to take anything!”
“Find a price someone will buy it at.”
“Not today. No one will buy anything today.”
Finn said nothing.
“It’s hard to believe I’m saying this, but Steel is not your biggest problem,” Lionel said. “Standard Oil, which you bought at an average of 210, yesterday was at 105, and you told me not to sell, to wait, that the market would rally, oh to buy Standard Oil for pennies on the dollar, remember? Well, last price for Standard is 79 and one-half. Don’t forget that half.”
“Sell it.”
“If I sell every single share of Standard Oil you own, it won’t be enough to satisfy your margin, forget about paying back your actual loan.”
“Sell everything else.”
“Hershey is at 86. You bought it at 150. Last Thursday you told me not to sell it when it was at 135.”
“Sell it at 86.”
“Westinghouse we could’ve sold yesterday at 140. Today it’s at 100.”
Finn had bought it at 200.
“Macy’s?”
“Bought at 190, could’ve sold yesterday at 160. Today, 120 if I can get it.”
“Get it. Sell it.”
“You have half a million dollars in DuPont,” Lionel said. “You bought that at 115. Yesterday you could’ve sold it at 150, and actually made some money. Today it’s at 80.”
“Purity Bakery?”
“Bought at 100, now at 55.”
“General Electric?”
“Bought at 220. Yesterday’s low was 250, today it’s at 210.”
“Sell it.” Finn kept himself from exhaling.
“Everything? Even your personal accounts?”
“Everything.”
“Your father’s? Your father-in-law’s?”
“Everything.”
“Your father has ten thousand shares of Montgomery Ward. He bought it at 90. Its high was 150 in September, when I told him to sell some of it, and you and he decided not to. It’s at 22 now.”
“Sell it.” They both groaned. “Sell it all,” Finn said, “before we are completely wiped out. Let’s see what’s left.”
“Nothing, my friend,” said a drained, weakened Lionel. “There will be nothing left.”