Thursday, March 27th, 1980

A photograph of the interior of an old assay office on a hard grey morning — tall windows with cold white light, a worn wooden counter, sacks of coins slumped on the floorboards. The office is drowning in silver: bars stacked on the counter beside a great brass balance whose two pans both carry ingots, and behind it the thin aproned assayer works the weighing blindfolded, a dark band over his eyes — the price discovered without looking. Waiting at the counter stands a queue of big broad-shouldered men in Western suits and pale cowboy hats, their posture gone grey and heavy. Among them, seen from behind, stands a man in full clown makeup and a grey suit a half size too big — tidy lavender side-parted hair — perfectly still, his hands clasped behind his back holding a small brown paper bag.

The corner collapses

Dow Jones 759.98 · −16.45 · −2.12%

Two of the richest men alive discovered the oldest rule in the book: a cornered market corners its cornerer.

The photograph Retail at the Assay Office

The day's protagonist

The margin call — no symbol.

Move: Silver $21.62 → $10.80 — half the metal's price in one session

The Hunt brothers of Texas had spent 1979 buying every ounce of silver they could reach — by January they held roughly a third of the world's private supply and the price touched $49.45. COMEX raised margins and capped positions; the price bled for weeks; and on this Thursday the Hunts missed a margin call measured in hundreds of millions. Silver halved to $10.80. Equities fell hard through the afternoon on fear that the brokers carrying Hunt paper would fail, then steadied late as word of an organized rescue spread. Their seven billion of silver had become one point seven billion of debt; a bank consortium's $1.1 billion credit line unwound it slowly enough that nothing else broke.

The deeper account

January 1980: silver at $49.45, the Hunts near their peak; COMEX's margin hikes and position limits began the squeeze in reverse.

The equity market's fear was contagion — Bache and other brokers carried enough Hunt paper that a default threatened the clearing system itself.

Congressional hearings ran for years; the affair gave regulatory weight to position limits and early currency to the word "systemic."

In the photograph of this day the two men who owned a third of the world's silver stand at the counter while the scale rests on the wood, done weighing. He waits in the queue behind them with his bag; retail owns no bars, which on this particular Thursday was the strongest position in the room.

Like the oil page, the truth of the day was priced in ounces, not index points.

The artifact

THE ASSAY OFFICE · THURSDAY, MAR 27 ASSAY SLIP metal: silver. quantity presented: ≈ one third of the world's private supply. yesterday's weighing: $21.62 today's weighing: $10.80 finding: a cornered market corners its cornerer. HALVED ASSAYER'S HAND seven billion of metal, one point seven of debt, by dinner. the call was measured in hundreds of millions. it was not met. A $1.1B CREDIT LINE UNWOUND IT SLOWLY ENOUGH THAT NOTHING ELSE BROKE JANUARY'S PEAK: $49.45 · THE WORD "SYSTEMIC" EARNED ITS CURRENCY HERE
The assay slip — written while the scale still rested on the counter

The slip weighs the oldest lesson in the register: the Hunts owned a third of the world's private silver, and on the day the world declined to pay for it, ownership became the trap. Equities fell through the afternoon on fear for the brokers carrying Hunt paper and steadied only on rescue talk — the finding, and the fine print's last word, outlived every hearing that followed.

Read the assay slip

Printed text is shown plain; the assayer's entries are shown in script.

THE ASSAY OFFICE · THURSDAY, MAR 27 · ASSAY SLIP

  • metal: silver. quantity presented: ≈ one third of the world's private supply.
  • yesterday's weighing: $21.62 · today's weighing: $10.80
  • finding: a cornered market corners its cornerer. · HALVED
  • ASSAYER'S HAND: seven billion of metal, one point seven of debt, by dinner. the call was measured in hundreds of millions. it was not met.
  • A $1.1B CREDIT LINE UNWOUND IT SLOWLY ENOUGH THAT NOTHING ELSE BROKE · JANUARY'S PEAK: $49.45 · THE WORD "SYSTEMIC" EARNED ITS CURRENCY HERE

On Thursday, March 27, 1980 — Silver Thursday — the Hunt brothers missed a margin call measured in hundreds of millions and silver halved in a session, $21.62 to $10.80, far below January's $49.45 peak. The Dow fell 2.12 percent on fear that the brokers carrying Hunt paper would fail, steadying late as word spread of the $1.1 billion bank credit line that unwound the position without a cascade.

The ledger — what actually happened

Measure Close Change Marginalia
Silver $10.80/oz from $21.62 the day before — and $49.45 at the January peak
Dow Jones 759.98 −16.45 · −2.12% fell hard on brokerage fear, steadied late on rescue talk
The Hunts' position ≈⅓ of private world silver $7B of paper turned into $1.7B of debt in an afternoon
The rescue $1.1B credit line assembled so the failure would not cascade through the brokerage system

Sources

  1. Britannica — Silver Thursday — https://www.britannica.com/topic/Silver-Thursday
  2. Wikipedia — Silver Thursday — https://en.wikipedia.org/wiki/Silver_Thursday
  3. Benzinga via Yahoo — This Day In Market History: Silver Prices Collapse As Hunt Brothers Currency Fails — https://finance.yahoo.com/news/day-market-history-silver-prices-114100085.html
  4. MarketsWiki — 1980 Silver Market Crash — https://marketswiki.com/wiki/1980_Silver_Market_Crash