It's been more than a century since the last time Wall Street shut down for two straight days due to weather. Here's a look back at the last storm to do it.
Thanks to Hurricane Sandy, U.S. financial markets have been shut down for two consecutive days now, making it the first time in more than a century that Wall Street trading will have been halted for 48 hours due to weather. Technically, the markets could have operated all-electronically today. But the New York Stock Exchange has never opened for business without traders on its floor, and given some of the severe glitches that have plagued computerized exchange such as the NASDAQ in recent months, nobody wanted to attempt the experiment right now.
So with Wall Street dark, I thought we could take a brief look back at the last great natural disaster to bring the stock market to a two-day halt: the Great Blizzard of 1888. The unexpected, three day blast of winter weather began on March Monday. The weekend forecast had called for rain, but when arctic air from the north unexpectedly met with a warm, low-pressure system from the south, the two swirled into massive storm that deposited foot upon foot of snow from the mid-Atlantic up through New England. About 400 people died in total, including about 200 in New York City, where 22 inches of flakes piled up. Thousands were trapped in train cars stalled atop the city's elevated subway tracks, some for as long as two days.
The snow also wreaked havoc on the city's communications infrastructure. As the Newark Star Ledger recalled in a reflection on the storm last year:
In 1888, all the city's communication systems -- telephone and telegraph -- were above ground, as were many of the gas and water lines. A citywide web of overhead wires was destroyed by the wind and ice and by Monday all of the New York's 6,900 telephone lines were dead.
The storm also left the city largely in the dark. Once their above ground electric lines began to snap in the snow and wind, the city's power companies chose to shut down service in order to head off any additional problems. As CUNY's Virtual New York describes the scene, "By evening, with snow still blowing, the only light in the city was gas light and candle light, remnants of decades past."
"Of course, the effect of the storm on the transaction of business was paralyzing," the New York Times wrote that week. While the New York Stock Exchange only merited a brief mention in the article -- "The total stoppage of business on the Exchanges means the loss of many thousands of dollars," the anonymous reporter explained -- it likely wasn't a difficult decision to shut the operation down. Beyond all the little physical inconveniences posed by a once-a-century storm, the market had come to rely on technologies such as stock tickers that would have been knocked out with the telegraph and phone lines.
But while contemporaneous accounts might not shed much light on what the financial world was thinking during the blizzard, the Times reporter's sense of awe at nature's ability to shut down an entire metropolis seems particularly poignant, given what we've seen over the last day:
In looking back at the events of yesterday the most amazing thing to the residents of this great city must be the ease with which the elements were able to overcome boasted triumph of civilization.... The elevated trains became useless; so did the telegraph wires, the telephone wires, the wires for conveying the electric lights, the wires for giving the alarms of fire. And worse than useless, they became dangerous.; It is hard to believe in this last quarter of the nineteenth century that for even one day New York could be so completely isolated from the rest of the world as if Manhattan Island was in the middle of the South Sea.
And it's even more amazing in the 21st.
UPDATE: 4:40 pm
While browsing through the New York Times archives, I stumbled some evidence suggesting that the New York Stock Exchange was in fact open for business during the Blizzard of 1888. Multiple outlets, including Bloomberg, The Wall Street Journal, and NBC, reported that it had closed during the storm. But a 1907 article titled, "Blizzard Markets: Last Tuesday's Storm Recalls the Isolation of Wall Street on Blizzard Day" suggests otherwise:
Though on March 12, 1888, the day of the blizzard, those who succeeding getting downtown were a mere handful they did business to the extent of 15,803 shares. It was on the following day, March 13, that the dullest market of this generation was made. Wall Street was practically deserted when trading opened on that morning and after a few hours of desultory buying and selling, the few officials of the Exchange who had fought their way downtown got together and declared the Exchange closed at noon. The total business of the morning was 2,075 shares.
A quick browse of the NYSE's daily trading volume data seems to corroborate that shares were in fact traded on the 12th and 13th. Which is to say, Wall Street traders may have been even more determined to make a buck in 1888 than they are today.
In the meantime I've sent an email to the exchange's spokesman to see if they can clear this little historical quandary up.
UPDATE: 5:11 pm
Two additional New York Times articles from the week of the Blizzard confirm that traders attempted to open the market for business on both March 12th and 13th of 1888, before simply giving up and going home. "A good many brokers got down town on Monday and Tuesday," the paper explained in one, "but they found the whole banking machinery of the Street disarranged, and it was not until Wednesday that it got into shape again." Another article reported that just 30 of the 1,100 members of the stock exchange were "on the floor when the gong sounded at 10 o'clock," that Monday, "and a large majority of the brokers present were residents of Brooklyn."
The Times goes on to note: "Nothing like this ever happened in Wall-street before, the nearest approach being at the time of the great sleetstorm in 1881, when the telegraph wires of the tickers were all down and business was delayed but not suspended." So, assuming our 1888 correspondent was correct, it appears that this week may in fact be the only time in history the New York Stock Exchange has closed down for two entire days straight.
(Image: Library of Congress)