The self-congratulatory spree was short-lived. Monday witnessed a near-complete collapse on heavy volume, with General Electric, Westinghouse, and American Telephone down 48, 34, and 34 points respectively. In all, the Times average showed a 49 point loss for the day. Once more the bankers held meetings, but Whitney and his colleagues did not appear at the Exchange to bolster prices. That evening all of the rumors were black. It was said that the bankers had sold short, and were jackals, not lions. The reputation of the banking community, so high during the summer, began to fall. Margin calls were getting dangerous, and a good deal of the day’s liquidations had been by customers who could not meet their obligations. Banks and corporations, which had loaned money at from 8 to 20 per cent, were concerned; the prime stocks and bonds they held as collateral were shrinking by the hour, leaving them with huge losses. Washington and Albany were silent as to possible governmental moves and the market was leaderless.

   The brokers found solace in reading Tuesday morning’s Times and Wall Street Journal. The former believed “that the investor who purchases securities at this time with the discrimination that as always is a condition of prudent investing may do so with utmost confidence,” and the latter noted that stocks were the same in terms of the values they represented, even though many had lost over 100 points. Those who held stocks outright had nothing to fear. “Their income is the same. They have lost a few tail feathers but in time they will grow in again, longer and more luxurious than the old ones that were lost in what the financial writers like to call the debacle.”

   These soothing words had no apparent effect. Tuesday was the most disastrous day in market history, eclipsing Black Thursday in terms of statistics. Over 16 million shares traded - if the same turnover ratio of that day were to occur now, over 100 million shares would pass hands. The Times industrial average fell forty-threes points, as losses of immense magnitude were recorded from the opening bell (see Table 13.1).

[Table omitted]

   The Governors of the Exchange met after the close to discuss a possible suspension of operations. It was decided that such an action would only worsen an already bad situation, and the bankers decided to try to restore confidence through cheery statements. The Exchange leaders exuded optimism and spoke of the bargains they planned to pick up in the next few days. President Hoover was reported as saying that “the fundamental business of the country” was sound.