Trivia Questions about the World War I Closure of NYSE

On July 31, 1914, only days after the start of World War I, the New York Stock Exchange closed its doors to traders. To mark the anniversary of this unusual event, we've put together some trivia questions; test your knowledge of the First World War's effect on financial markets worldwide.

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Did Other World Stock Exchanges Close as Well? # Uncertainties caused by the start of World War I closed down the New York Stock Exchange for more than four months in 1914. Almost simultaneously with the NYSE shutdown, the major stock exchanges of Europe closed their doors. Although panics in individual markets or regions had caused brief shutdowns in the past, such a widespread closure of the world's major financial markets was unprecedented. Worried that war-related fears would cause an unsustainable wave of selling, the financial markets closed down to forestall this sort of panic. The NYSE was particularly concerned that foreign investors would sell off their holdings to raise funds for the war effort in their home countries. A similar fear gripped Europe's major stock exchanges, which worried that a rush by foreign investors to repatriate their capital would lead to a massive sell-off, a precipitous decline in prices, and large amounts of capital flowing out of one country and into another.

Was This the First Major Shutdown of the NYSE? # Sandbags protect the NYSE's entrance from floodwaters caused by Hurricane Sandy in October 2012. The stock exchange, established in May 1792 under the so-called Buttonwood Agreement signed by 24 brokers, closed down for 10 days at the outset of the Panic of 1873, a financial crisis that led to a global depression. In the United States, that financial crisis hit particularly hard at the banking industry. The NYSE closure in 1873 came shortly after the failure of Jay Cooke & Company, a Philadelphia-based banking institution that was heavily invested in railroad construction. The failure of Jay Cooke was followed by a number of other bank failures, including that of the banking institution run by British-born financier Henry Clews. Several years later, the Blizzard of 1888 closed the NYSE on March 12 and 13, 1888.

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When Did the NYSE Resume Trading in 1914? After a stoppage of roughly four months, the NYSE reopened for bond trading only on November 28, 1914. According to History.com, U.S. officials decided that "bond trading, albeit with a set of restrictions designed to safeguard the American economy, could help prevent the financial ruin of the belligerent countries by raising money for the war effort." Stock trading on the New York exchange resumed on December 12, 1914. On that date, the Dow Jones Industrial Average, dropped by a whopping 24.39 percent, its biggest decline since the DJIA first debuted in 1896. This sharp decline in the key index reflected the war-related uncertainties affecting the market in the early years of World War I.

For What Reasons Has the NYSE Shut Down in the Years Since 1914? Although the 1914 shutdown of the NYSE remains by far the longest closure in its history, other shorter closings have occurred in the 103 years since the start of World War I. The exchange closed down on May 25, 1946, because of a railroad strike. Heavy snows have occasionally delayed the start of trading or resulted in an earlier end to trading on the exchange, but the so-called Lindsay snowstorm of February 1969 managed to shut down the NYSE for a day and a half. The exchange closed July 21, 1969, to celebrate the Apollo 11 moon landing. A power blackout across the New York metropolitan area closed the NYSE on July 14, 1977. After massive stock market sell-offs in October 1987 and October 1989, circuit breakers were put in place to automatically halt trading after such a sell-off. These circuit breakers kicked in and temporarily halted trading on October 27, 1997, and again on May 6, 2010. The terrorist attacks of September 11, 2001, closed down the NYSE from September 11 through 14. A year later, the market closed down for a day on September 11 to mark the first anniversary of the attack. Hurricane Sandy caused a two-day shutdown of the NYSE in late October 2012.