This Day in History
1893 – National Cordage Company declares bankruptcy after a failed attempt to corner the hemp market. At the time, National Cordage was the most traded stock and the selloff of shares quickly spread across the market. National Cordage was assumed to be a healthy, prosperous company, so it’s failure was a surprise to Wall Street. The stock opened at 39 but fell to 20 and the general market dropped in panic as well. General Electric fell from 88.5 to 79.5 (a decline of about 10%), Union Pacific railway fell equally, from 34 3/8 to 31 7/8. The fear would spread into the next day, May 5th 1893 which would become the worst day in stock market history, and remain so until 1929. Sources: New York Tribune May 5, 1893 page 1, The Evening Star May 5 1893 page 1 and Panic, Prosperity and Progress
The Panic of 1893 would turn into one of the worst economic depressions in the nations history. 14,000 business would close and unemployment would rise to 20%. The depression would last 4 years before the country began to recover.
Best May 4th in Dow Jones Industrial Average History
1906 – Up 3.04% or 1.93 points.
Worst May 4th in Dow Jones Industrial Average History
1970 – Down 2.60%, or 19.07 points.
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The panic of 1893 would lead to massive strikes, marches on the capital, mass unemployment and stock market declines. The panic would produce what would become the worst economic depression in history, and remain so until 1929.