Today's headline in The Wall Street Journal: The stock market is bound to crash!
The statement came from Roger Babson, a famous statistician from Wall Street, during a financial dinner in the city. The financial tycoons and economists present didn't take him seriously.
Among them, the most notable was Professor Irving Fisher of Yale University. Not only had he fully immersed himself in the ranks of speculators, but he also publicly declared in a speech, "Stock prices have reached a lasting peak."
However, the stock market's condition would not continue to hold at such a distorted high point simply because of a few words from an economist or a banker.
Inevitably, signs of a downturn appeared in New York's stock market...
Soon, reports of the situation in New York made their way to the White House in Washington. President Hoover, after receiving the reports and with subtle hints from various factions, immediately made a public speech: "The fundamental business of America, the production and distribution of goods, has not lost its balance."
Various government departments, along with economists and banking magnates, stepped in to support the market. Their words had some effect, especially with the president's backing. Hoover, having won the election with more than 80% of the electoral votes, had a strong public reputation, making people believe him.
After the market stabilized slightly for two days, however, some could no longer resist the urge to get out. It wasn't just individuals; institutions also wanted to flee. Some stock brokers, aware of insider information or sensing a looming collapse, began selling.
Once one person sold, two followed, then ten, and soon hundreds, then thousands of people joined in. In a short time, over six million shares were dumped on the market. The entire New York stock market was sent into a downward spiral. Stock prices began plummeting like an avalanche, and the automatic market recorders could only finish recording the last transactions an hour and forty minutes after the close.
Seeing this, many big capitalists urgently approached Hoover, hoping he would once again step in to reassure the market and stockholders, trying to stabilize the rapidly crumbling market.
President Hoover responded with another statement: "The basic enterprises of America, the production and distribution of goods, are based on sound and prosperous foundations," hoping to stimulate a new round of investment.
But who would believe him now?
The stock market disaster had begun, marking the infamous "Black Thursday." When the market opened in the morning, stock prices collapsed like a burst dam. People rushed to unload their stocks, and by the end of the day, 12.89 million shares had changed hands. Several major banks in New York quickly formed a "market rescue fund," and Richard Whitney, the president of the New York Stock Exchange, personally purchased stocks in an attempt to reverse the situation. But it was too late to stop the fall.
And so, the Great Depression descended upon the United States.
Ironically, Irving Fisher, the economist who had vehemently promoted the inflated stock market, still believed the market could be saved. He stuck to his position, only to watch his entire fortune collapse in a matter of days. He was left deeply in debt and eventually filed for personal bankruptcy. It's said that when he died, the blanket covering him was a gift from someone else. He passed away destitute, poor, and broken-hearted.
However, this had no impact on Nayle. His family had already withdrawn all their money, the crops had been harvested and weren't for sale, and the livestock could be slaughtered in winter for sausages and bacon. They were self-sufficient, and the collapse of the New York stock market seemed far removed from them.
The same went for most of Brook County, where most workers had no savings. The stock market crash might cause trouble for the banks, but since they had never had any dealings with the banks, it didn't really matter.
Only a few local business owners and coal mine owners were affected. The town's bank didn't even experience a run; it simply closed when its main branch in Charleston went bankrupt.
For those with families and businesses, losing their savings was indeed painful, but life had to go on. As long as they could continue running their businesses and earning money, they didn't resort to extreme measures like suicide.
Of course, there were unfortunate exceptions. A coal mine owner, who had misread the situation and borrowed heavily to expand production, now faced a drastic reduction in coal demand. His cash flow had dried up, and his mounting debts led to a confrontation with creditors. Desperate, he shot his wife and children before taking his own life.
The economic crisis, which had once seemed far away from the small town, now showed its most brutal face.
Even the housewife, Aunt Gingi, who spent her days knitting socks and feeding the pigs, had heard the story from the neighbors. She then exaggerated the details when she told Nayle, saying that the house had been a bloodbath, with the police's shoes sticking to the blood on the floor. She claimed the children's eyes were wide open, struggling to crawl out even as they died.
Aunt Gingi repeated prayers to Saint Mary and Saint Patrick, appearing very pious. Meanwhile, Nayle's younger sister, Debbie, had heard at school that over a thousand people had jumped to their deaths in New York.
This was just the beginning. Over the next year, thousands would follow suit. Suicides by jumping from buildings, drowning, overdosing, and poisoning became tragically common. It was said that many hotels in New York began asking guests at check-in if they were there to stay or to jump.
Ah...
Aunt Gingi repeatedly advised Debbie not to tell anyone that their family had withdrawn all their money. "Don't let the thieves get ideas," she warned. At fifteen or sixteen, Debbie was already very mature and understood the implications. In fact, girls her age in this era were often already married.
She knew the situation well. Coal mines were closing one after another, leading to unemployment for many miners. Those coal mines still operating found it increasingly difficult to pay wages.
There were already small-time thefts happening in town, something that never occurred in Brook County, where even the loss of a silver spoon would have been newsworthy.
After feeding the cows, Nayle wiped the sweat off his brow. He knew very well that the social order would soon collapse. At that point, it wouldn't just be petty theft—people might become outright bandits. He would need to figure out a way to prepare for self-defense.