Today in 1930 And The Great Mississippi Bubble

Wednesday,
July 9, 1930: Dow 219.08 +0.75 (0.3%)

Washington Irving's book “The Great
Mississippi Bubble” republished by Random House. "The story was written
about a hundred years ago and the actual event occurred more than two hundred
years ago, but the narrative … will interest many who witnessed the recent
debacle of stock prices." A couple of quotes from the book: The boom – "Every
now and then the world is visited by one of those delusive seasons when the
'credit system,' as it is called, expands to full luxuriance; the broad way to
certain and sudden wealth lies plain and open … "; The bust – "a
panic succeeds, and the whole superstructure built upon credit and reared by
speculation crumbles to the ground, leaving scarce a wreck behind."

That’s according to the Wall Street Journal from July 9, 1930.  This quite clever
blog, News From 1930, posts a
daily news summary based upon the author’s reading of the Wall Street Journal
from the corresponding day in 1930. 
As ikedim notes: “A common observation by people who like the blog is
that lots of it could have been written today. Well, here's a review in the
1930 Journal … of an 1830 book … about events in 1720 … and it still
could have been written today!”

And courtesy of Eldon, in
the comments:

Washington Irving's story, "The
Great Mississippi Bubble" is available online as a short story in
"The Crayon Papers," and can be downloaded in several e-reader
formats. Read it online at THE GREAT MISSISSIPPI
BUBBLE.

 Also available
in Google book format here. 

According to the blog author, one of his most
interesting findings so far is that:

In histories of the Depression the
leaders of the time are commonly portrayed as oblivious to what was going on,
do-nothing, and stupidly optimistic. For example, every school kid has seen the
much ridiculed pronouncement by Herbert Hoover that "prosperity is just
around the corner." Even from my limited reading so far it's clear this
criticism is mostly unfair. It appears that the people in charge at the time
were well aware of what was happening, and did most of the things that we're
doing now to alleviate it (with a couple of notable exceptions). And as for
unjustified optimism, we will see that at least in mid-1930 there was a fair
amount of good news coming out about the economy. And I mean actual good news
where things were improving month-to-month, not the asinine stories we see
today where bad numbers are interpreted as good because they were "better
than expected," and declining numbers are called good because the rate of
decline is slowing down (AKA second
derivative stories). [See here also on the second
derivative]

See this
item also from Tuesday, June 24, 1930:
Dow 219.58 +4.28 (2.0%):

J. Westerfield of the NY Stock Exchange
lectures civics clubs of Yonkers on the causes of the current business
recession. Says the effort to attribute it to any single cause is superficial;
criticizes sanguine statements of “new era” economists that “the vast amount of
reliable statistical information had practically abolished the old-time evils
of large inventories and overproduction.” Concludes that an illusion grew
popular that “paper profits in … quoted values for real estate, commodities,
securities, and other forms of property increased fortunes and thereby spending
power.”

Other headlines from other
days also seem eerily familiar. 
Check it out sometime.