Excerpts from "the first rough draft of history" as reported in The Washington Post on this date in the 20th century.

The stock market crash of Black Monday, 1987, was in many ways the nation's gravest financial crisis since the Great Depression. But the Federal Reserve's decisive moves to pump money into the banking system and cut interest rates averted a recession. In fact, the stock market soon recovered and the economy kept growing. An excerpt from the Post of Oct. 20, 1987:

The stock market was devastated by the worst one-day collapse in history yesterday in a pandemonium of panic selling that shattered all records and swamped stock exchanges around the country and overseas.

The best-known market barometer -- the Dow Jones average of 30 industrial stocks -- plummeted 508 points, five times the previous record set last Friday. The Dow closed at 1738, dropping 22.6 percent, or nearly double the 12.8 percent plunge of Oct. 28, 1929, the crash that began the Great Depression.

More than 604 million shares were traded on the New York Stock Exchange and 239 million on the American and over-the-counter markets, shattering previous records.

Investors lost more than $500 billion in stock market value, according to Wilshire Associates of Los Angeles, which publishes an index of some 6,000 publicly traded stocks.

And the losses were mirrored on markets around the world in a sobering demonstration of the electronic and psychological links that now tie the world's investors together.

John Phelan, chairman of the New York Stock Exchange, called the collapse a near "meltdown" caused by a "confluence" of factors: the market's inevitable turnaround after its long climb, heightened anxieties over rising interest rates and future inflation, and the impact of computerized trading maneuvers.

A remark by Securities and Exchange Commission Chairman David S. Ruder, discussing the possibility of a government-imposed halt in trading, added to the binge.

Other observers said fear was the overriding factor yesterday. "This is a financial panic," said Allen Sinai, chief economist with Shearson Lehman Brothers Inc.

"It is the classical mob psychology that takes over," said Burton Siegel, chief investment officer of Drexel Burnham Lambert Inc. "It feeds on itself. What you are dealing with here is a complete change in perception and psychology."

"This is chaos," said Neil Call, executive vice president of D.F. King, an investment services firm in New York. "Every market in the world is in panic or close to it."

This series is available at www.washingtonpost.com