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October 10, 1979 – The scene was Wall Street; the situation was the yearly plunge, sell-off, blood-bath, hysteria and nervous breakdown. October in 1979 proved to be no different, as stocks slid more than 26 points this day in October, amid news Chase Manhattan and several other major banks raised the prime interest rate a full 1%. Coupled with the sharp rise in Gold and steep drop in the value of the dollar, the sharpest fall in Dow Jones‘ 188-year history was recorded the previous day. The new day promised more of the same, and investors were anxiously lined-up, in wave after wave of selling. The raise in Bank rates was a reaction to the Federal Reserve, who raised interest rates as a way of attempting to cool off inflation. But the boost in interest rates, many feared, would slow up business too much. Builders, for example, could find the cost of funds prohibitive. And consumers could find that the higher charge of interest rates to business would raise some consumer prices to them.
Many Wall Street observers were noting a parallel. In 1978 the gambling stock led the market sharply upward, until stocks were hit by a wave of selling in what was called “The October Massacre”. In 1979, it was the oil stocks which led up the market, and they too fell sharply in this latest October Massacre.
And from Capitol Hill – The Senate and House were locked in conflict over two issues: A pay raise for members of Congress and the issue of Federally funded Abortions. The Senate opposed the pay raise, the House wanted it. And the House wanted to prohibit the use of any Federal money for use in abortions, unless the life of the mother was in danger. The Senate wanted to go along with present law, which was more liberal; allowing an abortion when the mothers health would be damaged if the pregnancy continued, and in cases of rape and incest. Time and time again, both the House and Senate have stuck to their positions. The House did the day before and the Senate was expected to tackle both measures again this day. The extra added difficulty was the pay-raise was now attached to a bill to keep some government agencies running and the abortion issues was tied to a money bill to keep the Department of Health, Education and Welfare in business. And as of this day, there was enough money around in the agencies to come up with one more pay check.
All that, and a lot more for this October 10, 1979 as reported by The CBS World News Roundup.
