Chapter 42

　　October 24, 1929 was called Black Thursday in later generations.

　　The stock market, which started to climb from the summer of 1919, reached 449 points in 1928, reaching an unprecedented peak. More and more Americans have invested their life savings in the stock market, stock gods have appeared in a wholesale fashion, and the stock market has ushered in a hot summer.

　　Unfortunately, summer is here, can winter be far behind?

　　In June, the seven universities of Brown University, Columbia University, Cornell University, Harvard University, Princeton University, University of Pennsylvania and Yale University jointly issued a notorious statement: "The evaluation of millions of investors of the New York Securities exchange has played a major role in this amazing market, and their unanimous judgment shows that the current stock price is not overvalued... the stock price will reach and maintain a permanent high."

　　In August, the broker's loan reached 17 billion US dollars, and the crazy farce on Wall Street has not yet ended. People still naively think that the prosperity of the market has no end. However, prosperity has an end, and only risk has no end. And precisely because the risk is unknown, it is even more terrifying.

　　In the first week of September, the market suddenly began to jump up and down. Although many parties temporarily held their positions in the contest, the cloud of market collapse has quietly enveloped Wall Street at this time.

　　On September 5, Babson, a non-famous American "statistician", delivered a speech at the National Business Association Annual Conference: The crash will happen sooner or later, and it will be difficult to contain. Like a curse, at 2 o'clock in the afternoon that day, the New York Stock Exchange plunged.

　　Who was Babson who had such a mysterious power?

　　In fact, Babson was not a well-known stock critic at all. His name is dizzying: educator, philosopher, believer, statistician, astrology enthusiast, economics enthusiast, and supporter of the law of gravity. ...In short, this person is a "big fraud"!

　　In hindsight, the market fell not because of Babson's genius predictions, but because after the market fell, people discovered that Babson had been such a big talk.

　　Wall Street is also organizing forces to fight back against Babson, but there is a real problem with the US economy. Because of the overall decline in industrial production index, steel output, and transportation volume, depression inevitably becomes one of the topics being discussed. Some responsive people began to sell and liquidate their positions, while others were planning to take over at a low position. More people hoped that important people's speeches could help the stock market survive.

　　Because the dark clouds hanging over Wall Street are already clearly visible, when the stock market boom is about to come to an abrupt end, two events knocked on the curtain call of this prosperity with two heavy shots, starting the four-year economic depression.

　　On September 20, 1929, the Clarence Hartley Company of England suddenly went bankrupt. Hartley was an interesting character unlike the Englishmen. For people like him, Englishmen often lament themselves, although his earlier experience in the financial industry was reassuring. Hartley built a truly impressive industrial and financial empire in the 1920s. The most compelling core business of this empire was the manufacture and sale of coin-operated automatic cameras. Later, Hartley abandoned these humble enterprises and switched to investing in investment trust and bulk financing. His fortune was largely due to the unauthorized stock issuance business, and the accumulation of assets by illegal stock issuance and other equally informal financing businesses. According to the legend in 1929, the exposure of Hartley's truth in London was believed to have seriously affected New York's confidence.

　　Another incident that circulated at the same time as the Hartley incident was that on October 11, the Massachusetts Public Utilities Bureau did not allow Boston Edison to split its shares into 4 shares. As the company pointed out, stock splits were very popular at the time. For Boston Edison, it was possible to regress to the company's gas lamp era if it does not seek progress. The Massachusetts Public Utilities Bureau immediately announced an investigation into the company's credit rating, and pointed out that the present value of the company's stock was "realized by speculation."

　　These are some irresponsible words. It is conceivable that these words may have serious consequences similar to the exposure of the truth about Clarence Hartley. However, the already unstable balance is also likely to be broken simply by a spontaneous exit decision. On September 22, the financial pages of various New York newspapers published an investment service advertisement in eye-catching bold print: "Please don't stay too long, the bull market will not reappear." This advertisement can be understood as: "Most investors make money in the bull market, and they will eventually be wiped out by the subsequent stock market adjustments, and some even suffer a net loss." The decline in the Federal Reserve Industry Index, the exposure of Hartley's truth, or the unusual 'making things difficult' approach of the Massachusetts Public Utilities Bureau eventually aroused dozens of people, then hundreds, and finally thousands of people to think that the bull market is about to end. We don't know what triggered the investor's concerns in the first place. However, we understand that it does not matter what caused investors concern.

　　These two events dominated the front page of the news and caused an uproar, because their exposure reminded people that there may be a bubble in the stock price, and gave people who were sleeping a wake up call, but the stock price did not plummet. The elites of Wall Street together with Mitchell (Charles Mitchell, President of the National Commercial Bank of America), declared that the stock market is healthy and that the upward momentum is unstoppable. The only disturbing thing was that the stock price fell all the way shortly after that.