Picture it. On this day, March 8th 1938: At 10:05 a.m., only five minutes after the day's trading has begun, the New York Stock Exchange closes trading. Astonished, hundreds of brokers fall into a hush as Exchange president Charles Gay mounts the rostrum. Gay announces that the firm run by his predecessor as NYSE president, Richard Whitney, has been suspended for insolvency. Then it's separately revealed that Whitney has committed "conduct apparently contrary to just and equitable principles of trade." Reports an eyewitness: "There was a dead silence, then a wild babble of voices." Stocks drop 2% almost instantly, but then trading virtually dries up as Wall Street realizes the Exchange has become a national disgrace. The silver lining: As shocked brokers seek to calm their nerves, the bartender at the NYSE estimates that his volume increases 275%.
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