'This is crazy': The 'Black Monday' stock market crash in Milwaukee

Thirty years ago this week, the stock market crash of Oct. 19, 1987 — Black Monday, when the Dow Jones industrial average dropped 508 points, 22.6% in a single day, closing at 1738.74 — caught a lot of people by surprise. 

"Near chaos reigned at the Blunt Ellis & Loewi trading floor in Milwaukee as traders struggled to keep up with the heavy volume and wildly fluctuating stock market Monday morning," The Milwaukee Journal reported in a front-page story in its afternoon final edition on Oct. 19. 

"There's a very, very panicked reaction," Curt Hoff, a senior vice president in the Milwaukee office of Dean Witter Reynolds, told The Journal after the market opened. Hoff said he was handling 10 times more calls than normal in the early going. "People are selling just to sell." 

At Loewi, The Journal reported, "16 traders sat nervously in front of their computers, phones pressed to their ears as they recorded some buy, but mostly sell, orders. The sound of phones ringing and receivers being slammed down punctuated the air. … 

" 'Calm down,' one trader said to himself as he hung up his phone. 

" 'This is crazy,' another said."  

The Journal reported that Loewi first vice president Thomas Czech said, as of midday, no one was pulling out his hair or jumping out a window. "That's why we're on the first floor," he said, presumably joking. 

The window-jumping was a reference to the last time the Dow had taken such a tumble: 1929, when stocks lost more than 11% on consecutive days, heralding the start of the Great Depression.

As in the year of the Great Crash, stocks had been heading downward before Oct. 19. The Friday before, Oct. 16, the Dow dropped 108.36 — the first time the average had had a 100-point drop in a single day. 

On Friday the 16th, trading volume also set a record, with 338 million shares changing hands. On Monday the 19th, more than 600 million shares were traded. 

(For context: On Oct. 16, 2017, this Monday, the Dow closed at 22,956.96, on trading of 247 million shares.) 

Because it was a time before widespread use of personal computers, a chunk of the activity was being driven the old-fashioned way: by telephone. 

"Sir, all our lines are tied up," a worker at mutual fund servicer First Wisconsin Trust told a caller, according to a story by the Milwaukee Sentinel's Larry Engel on Oct. 20. "We are going to have to get back to you. Yes, I have your number, and we will phone you back when one of our lines are free." 

After the markets closed at 3 p.m. Monday, some Milwaukee traders drowned their sorrows, and marveled at what they had seen. 

"It's scary," one broker, who had joined a few colleagues for drinks at John Byron's restaurant in what is now the U.S. Bank Building, 777 E. Wisconsin Ave., told the Sentinel's Crocker Stephenson in another story Oct. 20. "This is just one of those times where it doesn't make sense." 

"My heart rate doubled. I smoked a pack-and-a-half, and I rarely smoke," broker Mark K. Collins told Stephenson while having a beer with a client at the City Club, 330 E. Wells St. "I don't think you could call it anything else but a crash today." 

As the smoke cleared and the blame game began — computerized trading, fear and (other people's) greed were the usual suspects — other investors went bargain hunting. 

Among them was Erika Ersland, a 15-year-old from Cambridge whose market-playing made the front page of the Sentinel on Oct. 21. She told the Sentinel's Gary Krentz that she snapped up five shares of Chrysler stock at $25. 

"Such a bargain," she said.  

Our Back Pages 

About This Feature 

Each Wednesday, Our Back Pages dips into the Journal Sentinel archives, sharing photos and stories from the past that connect, reflect and sometimes contradict the Milwaukee we know today. 

Special thanks and kudos go to senior multimedia designer Bill Schulz for finding many of the gems in the Journal Sentinel photo archives.