“Black Tuesday” 1929

On October 29, 1929 a large crowd gathered outside the New York Stock Exchange. Thoughout the day, prices had been going down. This was not unusual as the Stock Market went up and down  all the time. But the rate of the descent shocked even government and business leaders. By day’s end many shareholders were staring at the numbers in disbelief. As author Richard Saleman later wrote, “Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.”

What had caused such a thing to happen? There’s actually no straightforward answer. Part of the explanation lay in the fact that there had been wild speculation during the 1920s that had given many stocks inflated value. Another cause was that people had bought stocks “on margin,” meaning they had borrowed money to buy a portion of the stock in the hope that it would double its value before the payment was due.Still another cause was that farm prices had been increasing since the 1870s had suddenly began to decline rapidly.

There had been warning signs. Starting in the 1870s, the United States had experienced several major recessions, the most recent of which had occurred in 1924. While these had been significant, they had usually only lasted a year or two before prices appeared to once again stabilize. In actuality, each successive downturn had whittled away at an already weak economy, and only one more major blow was needed to push the country into a full-blown crisis.

By 1929, fears of another recession were forgotten as the Market continued to climb, with the Dow closing on September 3 at 381.17 – a new record – before stocks dropped steadily through the rest of the month. Then on October 23, a wave of selling occurred as margin values were suddenly called in. Author John Steele Gordon wrote of the following morning, “Soon known as Black Thursday, it was the most frantic in the history of the New York Stock Exchange up to that time, as stocks plunged, generating more margin calls, which caused more stock to be sold at any price, as the average spiraled downward. Meanwhile, short sellers added to the downward pressure on stocks in bear raids.”

That afternoon, executives at JP Morgan and Company met and decided to inject $20 million into the Market, and began buying up stocks dirt cheap in an attempt to stabilize prices. Steele writes that this action appeared to work as stock prices did improve for the rest of the week. Then on Monday they began to trend downward.

Wall Street opening bell sounded on Tuesday, October 29, heralding the beginning of a financial apocalypse. Gordon wrote that the Dow average “plunged from the opening bell and kept plunging nearly continuously all day.” By the closing bell, sixteen million shares had changed hands, a record that would not be broken until 1968. So much trading had occurred that the ticker had fallen behind and would not catch up until nearly eight o’clock that evening. The Dow closed 23% below where it had started. Forever after, the day would be known as "Black Tuesday"  All told, $14 million had been lost and another $16 million would disappear before the end of the week.

The U.S. Stock Market Crash of 1929 had the effect of a typhoon on other world markets. In Europe, Germany’s financial infrastructure – still trying to recover from World War I – collapsed as Germans watched their money become nearly worthless. Hitler would later rise to power primarily on a platform promising economic benefits. The Japanese market also buckled; in future years Japanese militarists would seek to solve their economic problems through territorial expansion. In America, people came to realize that even those who didn’t invest in stocks were gravely affected by the massive layoffs and bank failures that resulted from the crash. My own grandfather would vividly remember how “hamburgers were just nickel, but nobody had the nickel.” The “hard times” created a generation of people fearful of putting money in the bank, and prone to hoarding household items that might be hard to come by if another crash occurred.

The market continued to drop for the rest of 1929, and while it did recover for a short time in 1930, would continue to fall for the next several years. While Franklin Roosevelt attempted to jumpstart the economy through New Deal programs, many of them proved to be only a temporary solution. Ultimately it was the start of World War II that finally put Americans – and most of the world – back to work.

Orson Welles and the greatest Halloween prank of all time

The night before Halloween is commonly known as the night pranks are pulled. Trees become redecorated with toilet paper, houses are egged and the most malicious leave burning brown stacks at the front door. However, this is nothing compared to what famous radio and film actor Orson Welles pulled on October 30, 1938.

If there is one word to describe Americans in the late 1930s it would have to be “apprehensive.” Domestically, the country had still not recovered from the Stock Market Crash of 1929. Despite all of the New Deal programs instituted by President Franklin Roosevelt, his magical touch with the economy seemed to have worn off by 1937. Historian David Kennedy wrote, “The levels of economic recovery building since 1933 had crested, well short of 1929 levels of employment.” He continued, “By August the economy was once again sliding measurably downward; in September rapidly downward. In October the stock market cracked.” According to Kennedy, companies lost as much as 80% of their profits and by the beginning of 1938, two million people were put out of work. This made the total of number of people unemployed about ten million. The new economic downturn quickly came to be called “Roosevelt’s Recession.” Kennedy wrote, “Roosevelt himself stood before the world in 1938 as a badly weakened leader, unable to summon the imagination or to secure the political strength to cure his own country’s apparently endless economic crisis.”

News from overseas was no better. In March of 1938, Nazi leader Adolf Hitler absorbed Austria and sent troops in, where they were greeted by cheering throngs. Then in September, Hitler demanded the Sudetenland, a part of Czechoslovakia. On September 29, an agreement was reached between Britain, Germany, France, and Italy which stated that Germany would be allowed to take the land so long as it made no further claims in Europe. British Prime Minster Neville Chamberlain flew home and famously declared “Peace in our time.”

There was trouble in Asia as well; Japan was on the march, carving up large portions of land in China and the Korean peninsula. Japan instituted a policy of total war toward the conquered civilians, massacring whole towns and burning down buildings.

All of this bad news made people want to escape the world somehow. Radio presented them with, if not a way to do this physically, then a way to do it mentally. The most popular program on the radio was the lighthearted “Chase and Sanborn Hour,” which featured the famous ventriloquist Edger Bergen and his puppet sidekick Charlie McCarthy. Another show that was on at the same time was much lower rated and unsponsored “The Mercury Theatre on the Air,” which was led by 23 year old Orson Welles.

On October 30, 1938, both shows started at their normal time. It was announced that the Mercury Theatre would present a production of “The War of the Worlds,” based off an 1898 book of the same name by H.G Wells. Most people did not hear this disclaimer, as they were listening to Chase and Sanborn. When Chase and Sanborn halted for a musical number, about four million people turned their dials to hear The Mercury Theatre. Instead of hearing a straightforward drama, they heard a newsflash come across the radio which announced that Martians had landed in a capsule at Grovers Mill, New Jersey. Tense moments went by as reporter Carl Philips described what had happened. Then he said with clear astonishment and horror that a Martian was coming out of the capsule.

By now, most people had forgotten all other radio programs and were hooked. They listened intently to the report as the emerging Martians released heat rays which burned all the people in front of Philips. The brave reporter continued to describe what he was seeing until his microphone fell ominously silent. A few minutes later, it was announced that the New Jersey National Guard, which had been sent out to eliminate the Martians, had been wiped out. Newsflashes continued, describing more alien landings in Princeton and more spacecraft moving toward New York. Reports of alien gas clouds killing thousands poured in until the announcer began to cough and collapsed on the air.

Even though the show soon went to commercial, the damage had already been done. About 1.2 million people had stopped listening and begun to panic. In the real Grovers Mill, the fire chief spent the entire night looking for nonexistent fires reportedly started by the Martians. One author later wrote, “Another local to the Grovers Mill area was in such a hurry to reach his wife’s family in Pennsylvania, he neglected to open the garage door first.” The man told his wife, “Well, we won’t need it anymore.” This was not an isolated act of hysteria as the same author wrote, “Newark traffic cops watched dumbfounded as dozens of automobiles careened through intersections heedless of stoplights, pedestrians or other motorists.”

Many of those who did not go running to their cars grabbed guns instead. Some people in Grovers Mill actually went as far as to open fire on what they thought was alien spacecraft. In the morning, it turned out to be an old water and windmill tower that had been standing in the same spot for years. Over one hundred state police had to finally come into the town to stop the panic.

So many calls started coming in that the lines became jammed with people all across the country wanting to know about their relatives and friends. When they were unable to get hold of them, they assumed that they had been killed or that the lines had been cut. If they happened to be in one of the affected places and were not dead, most people thought that the doom was still approaching. Streets that were always quiet at this time of night suddenly seemed to be hiding something sinister. In Washington state, phone lines at the The Seattle Times and the Seattle Post-Intelligencer newspapers became jammed as people frantically called to see what was going on. The town of Concrete, in the northern part of the state, was particularly unfortunate as their power went off right as it was announced that Martians were crippling power sources. The author wrote, “The result, of course was mass hysteria as people fled into the darkened streets cut off from any news source that might calm their fears.” Many residents simply fainted while others piled into their cars and raced into the surrounding mountains. One Concrete local later claimed to have been so frightened that he ran two miles barefoot just to get away. The town's reaction to broadcast would itself soon become world news. Out in Pittsburgh, a man had to talk his wife out of killing herself before Martians arrived. In Hollywood, famous actor John Barrymore released his prized Great Danes into the street. Reports came in from all around the country of people actually seeing fires and smelling the gas clouds. Some even believed that the attack was the work of the Germans or Japanese.

In the CBS studio in New York, a producer had to be talked out of cutting off the radio show altogether. The first half of the play ended and the second was more recognizable as a drama and had no more flash bulletins, so it was allowed to continue. It was announced three more times on the air that a play was being performed and at the end Welles gave a lighthearted apology, saying “we couldn’t soap all your windows and steal all your garden gates by tomorrow night… so we did the next best thing. We annihilated the world before your very ears, and utterly destroyed the Columbia Broadcasting System.”

Welles and the other actors were immediately questioned by the police but were released in a few hours. When asked by reporters if Welles had intended the broadcast to have the effect it did, he denied it, saying that he thought the people would just take it as theatre and not reality. This claim has been questioned in recent years as some have pointed out that a similarly styled radio show in England in 1926, which said that the Parliament Building and Big Ben had been blown up, caused riots. Also, Welles had told the actor reading the flash bulletins to try to sound just like a reporter, as well as telling another actor playing a fictitious secretary of the interior to try to sound just like Roosevelt. Even Welles himself later admitted, “We weren’t as innocent as we meant to be when we did the Martian broadcast.” Revealingly he added "We were fed up with the way in which everything that came over this new magic box, the radio, was being swallowed..So, in way our broadcast was an assault on the credibility of that machine."

Newspapers strongly condemned Welles and The Mercury Theatre in the wake of The War of the Worlds broadcast. However, the criticism was also mixed with praise for showing how gullible people were in believing what they heard. Lawsuits were threatened but they were all eventually thrown out. Even the FCC allowed the whole matter to die way without any condemnation. Welles ended up only voluntarily buying one man a new pair of shoes because he lost the original money for them during the panic caused by the play. As result of the broadcast, The Mercury Theatre quickly got a sponsor – Campbell’s Soup, who had refused to sponsor them only weeks before – and its ratings skyrocketed. H.G Wells was initially upset with the show and believed it had grossly infringed on his original work, however, when sales of his long-forgotten book began to climb, he stopped complaining.

In an interesting postscript, two men in Ecuador produced the same play in 1949 with the help of a newspaper editor who had been building up suspense for weeks by reporting unfamiliar objects in the sky. The broadcast caused the same panic as the original and when it was discovered to be fake, it set off fatal riots. In 1968, a local Buffalo station carefully advertised for weeks about the play in newspapers and radio, but that did not stop a similar panic from being created.

Historians now believe that the nationwide panic occurred because people genuinely thought that what they were hearing was true. Add to this the tension that already existed in the world, and it was as if the little broadcast snapped already taut nerves of people who were worried about jobs and the prospect of war with Germany and Japan. Some even say that the play was one of things that made people more cynical about what they heard on radio from that day on.

In the end, all sides bear some blame for what happened. Welles, for, at the very least, knowing how sensitive people were, and those who decided to panic, for believing absolutely in what they were hearing and in most cases failing to even turn to a different station. Some could have merely picked the New York Times for an explanation. The paper had printed a full page article on the performance only hours before the broadcast.

Today The War of the Worlds has become a Halloween tradition in many cities and towns. At Grovers Mill, people eventually got over their anger at the original broadcast, and in 1988 invited one of original writers of the play to come for a weeklong celebration of Mars and to place a time capsule in ground for the 50th anniversary of the broadcast. T-shirts for the event were printed and a marker with the figure of Welles doing the show was placed over it. The water tower that was shot up during the play is also still there and anyone who wishes may listen to the breathless reports of Martian rampage online or buy a CD. All this serves as an undying legacy of the greatest prank ever pulled on the night before Halloween.