September 5, 2004 marks the 75th anniversary of a speech by Babson College founder Roger Babson to the Annual National Business Conference on the Babson College campus.

According to John Kenneth Galbraith in The Great Crash 1929, Babson said “Sooner or later a crash is coming, and it may be terrific.” He also said that “factories will shut down…men will be thrown out of work…the vicious circle will get in full swing and the result will be a serious business depression.”

News of his prediction -- received on Wall Street by mid-afternoon – caused the market to retreat by about 3%. This decline in the market is known as the “Babson Break.”

According to:  http://www.futurecasts.com/Depression_descent-'29.html

 ‘Babson’s prediction was uncanny. Any market slide would soon start a stampede to safeguard profits. Investment trusts would begin to sell first (they already had begun to sell – contrary to the market myth that they would always support the market). On hearing this, European brokers would begin to sell out their customers’ American holdings. Then the general public would begin to sell and margin accounts would be closed out, “and then there will be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed.”’

More info on Roger Babson is available at: http://fusion.babson.edu/html/library/pg.cfm?ID=566

Babson College is home to the Roger Ward Babson Museum.