Richard Whitney

Richard Whitney – The Real Man in “The Fifth Floor” Short Story

Richard Whitney (1888-1874) was President of the New York Stock Exchange from 1930-1935.  His career ended in disgrace, but in 1929, he became the hero for a day when stocks fell on “Black Thursday,” October 24.  Large investors tried to try to stop the stock market’s decline.  Richard Whitney strode onto the floor and purchased U.S. Steel, then other stocks.  Of course, we all know now that the stock market didn’t stabilize; instead, it continued its decline.  Over the next several days, there was a “Black Monday,” a “Black Tuesday,” and investors lost around 25% during those few days.  (Much more over the next few months/years.)  That was an incredible loss since investors could borrow at 10% margin which allowed you to incur a large debt on just a small investment. 

For instance, if you had $1,000 invested, you could purchase $9,000 worth of stock on 10% margin.  Imagine how you could lose so much so quickly when the prices went down instead of up.

Back to Mr. Whitney.  He went bankrupt, embezzled funds, and served time in Sing-Sing.  I might have to revisit Mr. Whitney at some point in the future.  But for now, he’s just a small character in my short story, “The Fifth Floor.”