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Quote of the Day

“A man generally has two reasons for doing a thing. One that sounds good, and a real one.”

-J.P. Morgan

November 6th – This Day in Stock Market History

November 6th, 1907 – Organized by J. Pierpont Morgan, a boat arrives with $7 million worth of gold from London to help bail out the U.S. Financial system during the panic of 1907. The boat also brings word that $10 million worth of gold follows behind it aboard the Lusitania (the same boat that would be sunk by the Germans May 7th, 1915). The plan worked, although stock markets would fall until November 16th when the Dow Jones Industrial Average would bottom at 38.82, panic in the markets would subside.

J.P Morgan had been monumental in saving the economy from the panic of 1907. The panic began on October 15th when Frederick Heinze failed in his attempt to corner the market in United Copper shares. Shares fell from $60 to $10, leading to brokerages failing, runs on many New York City banks, and a steep stock market decline. J.P Morgan had been working for weeks prior to November 6th to help avert a crisis, most notably locking bankers in his office until they came together with a plan to save the economy.

This would be Morgan’s last great effort needed to help restore the U.S. economy from the panic of 1907.

New York Times front page coverage of the arrival of gold on November 6th, 1907
New York Times front page coverage of the arrival of gold on November 6th, 1907

The stock market would return 45.78% in 1908 – at the time, the best annual return in the stock market’s history.

Source: It Was a Very Good Year: Extraordinary Moments in Stock Market History

November 6th, 1928 – Herbert Hoover is elected President of the United States. He would take office March 4th, 1929.

During his term, the Dow Jones Industrial Average would fall more than 80%, the worst stock market performance under any president.

Stock Market Returns under each president from our article here
Stock Market Returns under each president from our article here

November 6th, 1929 – Only a few days after Black Monday (October 28th, 1929) and Black Tuesday (October 29th, 1929), stocks continue to decline sharply. On this day, stocks fall 9.9% with the Dow Jones Industrial Average closing at 232.13, already down 40% from the market’s 1929 high.

New York Times coverage of the November 6th 1929 decline in the stock market
New York Times coverage of the November 6th 1929 decline in the stock market

However, the market still had a long way to fall. The stock market would not bottom until July 8th, 1932 when the Dow Jones Industrial Average closed at 41.22.

Best November 6th in Dow Jones Industrial Average History

1931 – Up 3.81%, 4.14 points.

Worst November 6th in Dow Jones Industrial Average History

1929 – Down 9.92%, 25.55 points.

Read of the Day

The panic of 1907 would be the last time the U.S. economy would need J.P. Morgan for a major rescue. When he died in 1913, bankers realized that there may never be another man powerful enough to replace him, and created the Federal Reserve to help respond to future crisis.
For those interested in learning more about Morgan’s life and the buildup of his financial dynasty, check out the masterpiece: The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance

 

Go to Next Day: November 7th, 1918 – Germany Surrenders, ending WW1 —>