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and the City season now on bbc2 was this
the greatest financial lessons

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we chose to ignore me I'm

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con in 1929

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years a booming prosperity ended in
catastrophe

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it was the biggest stock market crash
since records began

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on it is impossible to underestimate the
shock

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a census stunned disbelief do first-time
investors borrowed huge amounts of money

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to speculate on the Mount the market
broke very sharply and Milana people who

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were wiped out with it

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it was very painful

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later thousands have banks failed
millions lost everything

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the poverty which really all

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around us at least really really pitiful

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but the crash was followed by a
depression and spread across the world

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lasted for a decade and was a prelude to
war

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I'm this is a story of a financial
disaster

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we hoped it would never happen again on

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with Tuesday 23rd October 1929

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without warning share prices are
plummeting on the New York Stock

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Exchange

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in investors a stop in

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for the last five years the market has
only gone up

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in the space of an hour a staggering two
and a half million shares are sold

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the next day the downward spiral
continues

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yeah as people came in to trade stocks
on October 24 there was a sense that

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maybe something had changed it there was
something different

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all the Sun there just weren't hires

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people willing to sell but there are
buyers coming forth to buy the stocks

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and prices began to fall two dollars
four dollars

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ten dollars a share the serbs were fine

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that morning there were drops on the
stock change

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they were so shocked and so dire stock
suddenly dropping ten twenty thirty

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points at the time

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that it said that there were shrieks and
gasps

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in the gallery the New York Stock
Exchange

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people are stunned by what has happened

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and terrified shaw's injured people

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begin to gather outside the stock market
10,000 people

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Faith Hill the streets from Broadway to
the east river

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people want to know what's going on they
went there

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these huge crowds gathered around the
stock exchange around the statues in on

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the stairs

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waiting to get any kinda news they could
as people came out

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at the exchange they could hear voices
they could actually hear the shouting

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and yelling is people are buying and
selling

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that they didn't know what was going on
in today gathered and they stayed there

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to find out mu

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few of the thousands waiting in the
crowed appreciated the scale of the

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disaster that was about to unfold

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law could imagine that over the next
five days

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a financial catastrophe would sweep away
the foundations of america's prosperity

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on

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but to understand what brought about the
crash we need to go back a decade

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to a time when American confidence grew
so high but it seemed the good times

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would last

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should have askin

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in and in 1919 the US it emerged
victorious from World War one

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and mood of optimism was in the region

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Britain and its European allies would
exhausted financially from the war the

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US economy was striving

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in the world danced to the American
church in

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the uncertainties moreover

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there seems little doubt about what was
going to happen america was going on the

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greatest

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guardians spree in history and there was
going to be plenty to tell about it

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thin

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in the 1920s everyday life was changing
electrification

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transform demand tones were hooked up to
the clinton

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new technology is unmatched in airplanes
radios

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domestic goods that it started life as
luxuries now became necessities and

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the cattle industry also who dis people
flock to buy one of the new Ford or

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Chrysler automobiles

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a and you know I love boneless
prosperity

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seem to have begun and theme

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this is the flowering of consumer
culture and mass consumption

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on a scale never before seen okay

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there was also heavy installment buying
to encourage people

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to buy big-ticket consumer items that
they can buy those items on credit

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this type of consumer credit was another
innovation in the 1920s

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for the first time the idea of buying
okay later

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hit the mainstream and and there's a
kind of

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play culture that develops alongside

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this consumerism which says we believe
now in instant gratification

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take care of the now don't worry about
the future

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live for the moment in

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it was a whole ideology that we're in a
new economic era

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and it was the birthright of every
self-respecting American

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to be rich on

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with easy credit and more disposable
income americans are now looking for new

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ways to get even richer

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on since world war 1 the US government
had sold bonds

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known as Liberty Bonds to pay for the
war this was a way to borrow money from

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the public

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who in turn would receive interest
payments on the bonds volume

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celebrities such as Charlie Chaplin and
Douglas Fairbanks

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had been recruited to promote them that
huge rallies Liberty Bonds

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cause many people to become investors in
securities for the first time

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for the first time in their lives they
got interest payments every six months

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and the security was something they
could trade on the market so they could

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look in the newspaper and see what the
price is my bond is today

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Liberty Bonds created in investing
culture most people have never purchased

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securities before any guide ordinary

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people accustomed to buying securities

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you

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now there was another group of people
who thought they could take advantage of

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this new investing culture

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the bankers on Wall Street

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three years wall street's the Central
American Finance was made up a small

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elite group banker's doing business with
each other

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in a society closed off to the general
public

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but one man saw an opportunity that
would change the face

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on the financial world Charles Mitchell

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president at National City Bank spotted
a lucrative the gap

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and Mark &

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Metro saw that investors had purchased a
lotta government bonds during world war

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one

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and so he said now we have an investing
public they're all we need to do

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as market other products like corporate
bonds common stocks and just tell people

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these are respectable investments
Mitchell was a natural salesman

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with a big ambitions I'm if people
willing to buy bonds to raise capital

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for the government

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surely they could be tempted to buy
stocks and shares

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to raise capital for private companies
listed on the New York Stock Exchange

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and you could make a profit for
themselves in the process

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gradually people who never dreamed that
they would invest in stocks were doing

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so

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when stocks lost ladder this stigma
historically

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stocks have been considered much too
risky for ordinary people

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her wares in the nineteen twenties there
was a sense that

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investing in stocks was not only safe
but reliable and respectable

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the idea to cough and to exploit this
lucrative new market

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Mitchell open brokerage offices all
across the country

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where people who have the money but not
the investment know how

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could speculate in stocks and shares
cool

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this speculative frenzy

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embraced all kinds of people not just
professionals

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ordinary people began participating as
well in on

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crushing and numbers were all across the
country not just New York City

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but in cities and small towns all across
America

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people who are in love with the stock
market

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technology made it all possible the
leadership prices flash from wall street

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could be printed out for the minutes
across america

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using telegraphic ticker tape machines
yeah

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you could find ticker tape in nightclubs

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in railroad depots in beauty parlors

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on ocean liners the market became a
pervasive part of america's

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play culture in nineteen twenties I eat

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sleep dream talk stocks the only way I
believe to make money

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it's exciting I'm not be seventeen
thousand dollars profit

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on three and a half thousand dollars
capital not bad

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yeah

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who were wild speculation

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all kinds I'll securities movie company
stocks aeronautical stock small the auto

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company stocks

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one other hot stocks in the 1920s Radio
Corporation of America

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was a lot like today's Google you know
it was at cutting edge technology

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they have this idea that you could put
radios in cars an action that

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the American investing public began to
connect with

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products they were using that were
coming from corporate america

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with the the the notion that hey I might
own a share of the company that makes

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their product that I like

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aren't you have my own room

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my not money here I'm

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you're done

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amo

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you

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lonely man my the mid-twenties around
three million Americans within the

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market

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on wall street. grip the public
imagination with tales of fortunes be

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made overnight

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the ideal the great bull market in who
she is only seem to glomp too cold

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I

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every popular magazine every newspaper
every radio station

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was fascinated by what was going on in
the stock market

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people charted the activities to
celebrities like Charlie Chaplin a

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Groucho Marx in

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were fascinated by what stocks they
happen to be speculating in her room

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young comic had to go to marked invested
all his savings into the market

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it was so pleased with his profits on
paper that he persuaded his brothers to

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invest to

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one easy racket RCA went up some point
since this morning

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I just made myself some thousand dollars
in

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I 0

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but it wasn't just celebrities becoming
speculators the big Wall Street

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speculators

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will become the celebrities themselves
to home

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they were thought of as creative
entrepreneurial and bringing wealth

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Domenico

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joseph kennedy's father that the future
president kennedy

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was one in this new breed of shoes
financial superstar home people work

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session a day because

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some love these men like joseph kennedy
ordinary folks they were men from

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nowhere

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and their rapid rise on the market I

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was a kind of inspiration to ordinary
folded that

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might even be possible for them someday
all I stories circulated anyone from

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bell boys to bob's

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could make easy money on the market the
shoeshine boy on wall street.

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had Bologna was one of those inspired by
the steals a rags to riches

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n who was going to make a fortune cool

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that he lived in New York the stock
market was Kingwell

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my father was probably about seventy to
eighty

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on a daily basis he would china shoes a
problem literally up the great men of

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America

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people might Joseph Kennedy key
executives like Mitchell

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he would converse with them and became
somewhat of an expert on things like the

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Federal Reserve and

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things you wouldn't think that a
shoeshine who would be expert on but he

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was talking to the great minds above
Wall Street

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00:13:03,200 --> 00:13:08,920
everyday whole day and so is my father
began to invest in the stock market

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is the truth be told I learned how to
read

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meeting the stock pages because that was
what my father did I mean we grew up

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with the stock market was the stock
market for preface it was the stock

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market for dinner when he came home

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00:13:21,780 --> 00:13:27,149
I the stock market was was the world

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I started 1928 I because like many young
people

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I want you to go to the place where
there is making all this money

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00:13:37,300 --> 00:13:41,609
my first job these to be a messenger boy

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00:13:41,610 --> 00:13:47,100
on for the change a colonial we could to
find out

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that most the time people like green tea

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Laura there

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the

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people had so much faith in the bull
market that they borrowed increasing

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sums of money to speculate on rising
share prices

225
00:14:02,250 --> 00:14:06,790
this way of buying shares was known as
buying on margin

226
00:14:06,790 --> 00:14:10,500
the investor was required to put on only
part of the money

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00:14:10,500 --> 00:14:13,990
with their broker funding the breast

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00:14:13,990 --> 00:14:19,509
the culture of I know pay later and
spread to the stock market

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00:14:19,509 --> 00:14:22,509
buying stocks on margin means
essentially that you're buying in with

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borrowed money

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00:14:23,300 --> 00:14:27,420
the by the late nineteen twenties ninety
percent of the purchase price of the

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stock

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00:14:27,940 --> 00:14:32,389
is being made with borrowed money there
were no rules about how much you could

234
00:14:32,389 --> 00:14:36,399
borrow and people borrowed enormous sums
of money to buy stocks

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00:14:36,399 --> 00:14:40,810
you could buy a hundred dollar stock for
twenty-five dollars

236
00:14:40,810 --> 00:14:44,739
and then in and a brokerage firm would
loan you the other 75

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00:14:44,740 --> 00:14:47,829
and if the stock went up in the late
twenties

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00:14:47,829 --> 00:14:51,279
everything seemed to go up and up the
net twenty-five dollars could turn into

239
00:14:51,279 --> 00:14:53,779
investment officer 200 or 300

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00:14:53,779 --> 00:14:58,310
so it became a huge part in the US
economy to loan money

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00:14:58,310 --> 00:15:02,849
for the stock market in fact and in the
late 1920s nearly forty cents and

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00:15:02,850 --> 00:15:08,110
every dollar loan it was for stocks in

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00:15:08,110 --> 00:15:11,500
this my last influx a borrowed money
into the stock market

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00:15:11,500 --> 00:15:14,950
created more demand for shares pushing
prices

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00:15:14,950 --> 00:15:20,860
ever to Prince in 1928 the market went
up by almost 50 percent in just 12

246
00:15:20,860 --> 00:15:21,459
months

247
00:15:21,459 --> 00:15:26,560
and the stocks continue to rise more and
more investors borrowed money to get a

248
00:15:26,560 --> 00:15:27,670
piece of the action

249
00:15:27,670 --> 00:15:31,269
one of them shoeshine boy at Bologna

250
00:15:31,269 --> 00:15:35,180
my home didn't have a lot of money in
the stock market

251
00:15:35,180 --> 00:15:38,769
he told me at the time he had about six
thousand dollars in cash

252
00:15:38,769 --> 00:15:42,50
for number six thousand dollars in cash
translate into a lot of stock

253
00:15:42,50 --> 00:15:46,399
P course in those years you've only had
to put 10 percent down from March's

254
00:15:46,399 --> 00:15:49,130
so it's six thousand dollars you could
have sixty thousand dollars worth of

255
00:15:49,130 --> 00:15:49,550
stock

256
00:15:49,550 --> 00:15:56,550
in

257
00:15:56,779 --> 00:16:00,300
Wall Street was hungry for new

258
00:16:00,300 --> 00:16:04,560
come to us there was one group would-be
investors that the street at all was

259
00:16:04,560 --> 00:16:05,229
ignored

260
00:16:05,230 --> 00:16:08,270
whose money it now won t

261
00:16:08,270 --> 00:16:15,170
him until the 1920s women had play a
very small role in the stock market part

262
00:16:15,170 --> 00:16:18,860
of this which was simply gender
prejudice they were considered incapable

263
00:16:18,860 --> 00:16:23,970
are the kind of cruel sang fly G it was
necessary he speculated in the market

264
00:16:23,970 --> 00:16:27,820
but in the 20s by the popularization on
the stock market

265
00:16:27,820 --> 00:16:31,20
included shoes numbers have winning

266
00:16:31,20 --> 00:16:34,270
when the twenties were big time for
women anyway they

267
00:16:34,270 --> 00:16:38,220
really stepped out on their own they
began to take control of their own money

268
00:16:38,220 --> 00:16:41,600
they went to college actually in record
numbers in the nineteen twenties

269
00:16:41,600 --> 00:16:45,910
and I as they did that they also got
interested in the stock market and is

270
00:16:45,910 --> 00:16:48,29
wait for them to build their own wealth

271
00:16:48,29 --> 00:16:52,439
%uh one such investor was a pioneering
New York photographer

272
00:16:52,440 --> 00:16:56,480
called Alice Austen she lived in Staten
Island

273
00:16:56,480 --> 00:17:00,850
just across the water from wall street
she had moved into this house when she

274
00:17:00,850 --> 00:17:02,470
was a couple months old

275
00:17:02,470 --> 00:17:06,400
she was Brighton she was adventurers

276
00:17:06,400 --> 00:17:11,59
by the time she was 11 she had received
a camera which was a new invention by

277
00:17:11,59 --> 00:17:11,770
the time

278
00:17:11,770 --> 00:17:15,839
this immediately took to it over the
years she took some

279
00:17:15,839 --> 00:17:19,849
8,000 glass plate negatives making her
one of america's

280
00:17:19,849 --> 00:17:24,719
earliest and most prolific photographer
trashed policies inheritance from my

281
00:17:24,720 --> 00:17:25,610
grandfather

282
00:17:25,609 --> 00:17:30,309
had fun in a comfortable lifestyle but
it had dwindled by the nineteen twenties

283
00:17:30,309 --> 00:17:33,840
and she was tempted by wall street's
promise some quick fuck

284
00:17:33,840 --> 00:17:38,419
Silas Austin discovers that she is
running a little low

285
00:17:38,420 --> 00:17:42,10
and the question then becomes what to do
her friends

286
00:17:42,10 --> 00:17:46,110
0 urged her to be conservative cuts in
spending

287
00:17:46,110 --> 00:17:51,350
maybe not go to your maybe not by a car
instead to Alice found a broker

288
00:17:51,350 --> 00:17:55,219
who advised her know I'll buy stocks
become rich quick

289
00:17:55,220 --> 00:17:59,100
and you know what you can borrow money
so you can buy even more stocks

290
00:17:59,100 --> 00:18:02,500
buying on margin and Alice Austen
thought that pay

291
00:18:02,500 --> 00:18:08,630
sounds like a good idea to me on

292
00:18:08,630 --> 00:18:12,520
throughout the story market in the
nineteen twenties the republican party

293
00:18:12,520 --> 00:18:16,660
state in part on the back up america's
increasing prosperity

294
00:18:16,660 --> 00:18:18,830
on

295
00:18:18,830 --> 00:18:21,830
calvin coolidge became president in 1923

296
00:18:21,830 --> 00:18:27,279
an investor himself he was notably
silent in the speculative mania gripping

297
00:18:27,279 --> 00:18:28,230
Wall Street

298
00:18:28,230 --> 00:18:33,590
calvin coolidge typifies the lazy a fair
devil-may-care

299
00:18:33,590 --> 00:18:37,9
a recklessness %uh the 1920s

300
00:18:37,9 --> 00:18:41,399
he's famous for saying that the business
is america is business

301
00:18:41,399 --> 00:18:46,518
you it was a prosperous period business
was making money Wall Street was making

302
00:18:46,519 --> 00:18:46,980
money

303
00:18:46,980 --> 00:18:50,340
now the politicians I think just said
well every everything's fine

304
00:18:50,340 --> 00:18:53,769
the economy's growing the market takes
care of things pretty well in the

305
00:18:53,769 --> 00:19:00,769
government's job was to get on the way

306
00:19:02,929 --> 00:19:06,710
are the

307
00:19:06,710 --> 00:19:10,840
during the coolidge presidency wall
street's Park continue to grow

308
00:19:10,840 --> 00:19:16,439
unchecked this administration had close
links with an elite group of bankers and

309
00:19:16,440 --> 00:19:17,190
financiers

310
00:19:17,190 --> 00:19:20,960
wall street's inner circle I

311
00:19:20,960 --> 00:19:25,490
their wealth and connections gave them a
men's influence over the government's

312
00:19:25,490 --> 00:19:28,510
financial policy here

313
00:19:28,510 --> 00:19:33,610
the small a lead private partnerships
this was really the royalty

314
00:19:33,610 --> 00:19:38,240
far wall street these were very
mysterious and discreet places

315
00:19:38,240 --> 00:19:42,580
they were small firms with limited
capital but they exercised really

316
00:19:42,580 --> 00:19:48,129
and outsized power

317
00:19:48,130 --> 00:19:52,430
the most prestigious if these elite
films was the JP Morgan Bank

318
00:19:52,430 --> 00:19:55,940
strategically located directly opposite
the stock exchange

319
00:19:55,940 --> 00:20:02,180
it would play a key role in events to
come a senior partner GP Morgan

320
00:20:02,180 --> 00:20:05,410
Thomas Lamont was the most powerful man
on wall street.

321
00:20:05,410 --> 00:20:08,860
his influence extended well beyond New
York

322
00:20:08,860 --> 00:20:11,870
the amount and the other JP Morgan
parton's

323
00:20:11,870 --> 00:20:17,10
spoke regularly with successive
presidents grandfather was a very very

324
00:20:17,10 --> 00:20:18,140
busy man

325
00:20:18,140 --> 00:20:21,640
he didn't have to time as some
grandfathers might to

326
00:20:21,640 --> 00:20:25,650
take his grandson Tyler baseball game or

327
00:20:25,650 --> 00:20:29,150
go fishing and do things like that on

328
00:20:29,150 --> 00:20:32,700
grandfather's life style certainly a
very handsome lifestyle is no question

329
00:20:32,700 --> 00:20:33,490
about it

330
00:20:33,490 --> 00:20:36,830
he did have his yacht the run at which
was a 72-foot

331
00:20:36,830 --> 00:20:41,159
very handsome yacht which you often
would cruise down from his house in

332
00:20:41,160 --> 00:20:42,80
palisades

333
00:20:42,80 --> 00:20:46,40
commuting by boat if you will down the
Hudson River to wall street name look up

334
00:20:46,40 --> 00:20:46,750
to the bank

335
00:20:46,750 --> 00:20:49,320
the more

336
00:20:49,320 --> 00:20:53,919
under lamont leadership JP Morgan
steered clear to the worst excesses %uh

337
00:20:53,920 --> 00:20:55,920
the stock market

338
00:20:55,920 --> 00:20:59,480
but the close relationship between elite
bankers and politicians

339
00:20:59,480 --> 00:21:02,550
helps keep government regulation Wall
Street

340
00:21:02,550 --> 00:21:09,550
to a minimum while amateur speculators
were transfixed by the soaring value of

341
00:21:09,720 --> 00:21:10,720
that investment

342
00:21:10,720 --> 00:21:14,610
they were hopelessly unaware how wall
street

343
00:21:14,610 --> 00:21:16,570
really worked no

344
00:21:16,570 --> 00:21:20,860
with little government supervision the
market was a law unto itself

345
00:21:20,860 --> 00:21:24,919
and insider dealing was right

346
00:21:24,920 --> 00:21:28,800
there was a lot of market manipulation
going on was rampant there was no

347
00:21:28,800 --> 00:21:30,379
disclosure doll to speak up

348
00:21:30,380 --> 00:21:33,790
and when Wall Street was very small and
very self-contained

349
00:21:33,790 --> 00:21:38,170
that was probably OK that is people like
you and me began to put our hard earned

350
00:21:38,170 --> 00:21:41,110
money into the market then it really
mattered

351
00:21:41,110 --> 00:21:44,729
I'm the stock market in the 1920s

352
00:21:44,730 --> 00:21:50,120
was neither fair nor democratic it was a
big gambling casino and it was rigged by

353
00:21:50,120 --> 00:21:51,340
professional

354
00:21:51,340 --> 00:21:53,870
speculators home

355
00:21:53,870 --> 00:21:55,360
green

356
00:21:55,360 --> 00:21:56,179
good

357
00:21:56,180 --> 00:21:59,170
has small investors gambled with their
life savings

358
00:21:59,170 --> 00:22:03,460
the failed to realize that the odds were
stacked against them

359
00:22:03,460 --> 00:22:07,70
men like joseph kennedy did not make
their fortunes by simply picking the

360
00:22:07,70 --> 00:22:08,10
right stocks

361
00:22:08,10 --> 00:22:13,250
the truth was that they were cashing in
on the naive the TL gullible newcomers

362
00:22:13,250 --> 00:22:18,320
die bunch sharp speculators would get
together

363
00:22:18,320 --> 00:22:23,908
and coordinated fashion they would start
quietly but relentlessly buying

364
00:22:23,909 --> 00:22:25,830
in individual stocks

365
00:22:25,830 --> 00:22:29,669
what they would do is hype a particular
stock buy it up themselves

366
00:22:29,670 --> 00:22:33,260
and then dump it on the market so that
they took the profits

367
00:22:33,260 --> 00:22:36,990
while the average investor in those
stocks were left with the loo 6

368
00:22:36,990 --> 00:22:41,470
even some love the a lead investment
houses on wall street. were

369
00:22:41,470 --> 00:22:45,380
engaged in this type of market
manipulation

370
00:22:45,380 --> 00:22:51,650
ass

371
00:22:51,650 --> 00:22:55,880
in march in 1929 a new Republican
President Herbert Hoover

372
00:22:55,880 --> 00:23:00,360
was inaugurated in his address he
reassured Americans

373
00:23:00,360 --> 00:23:04,270
we have reached a high degree of comfort
and security

374
00:23:04,270 --> 00:23:07,990
than ever existed before in the history
of the world

375
00:23:07,990 --> 00:23:11,720
but behind the scenes he was less
confident

376
00:23:11,720 --> 00:23:15,640
hoover is actually skeptical about
what's going on

377
00:23:15,640 --> 00:23:19,700
on wall street in the economy generally
but he doesn't have the political

378
00:23:19,700 --> 00:23:21,590
courage of his convictions

379
00:23:21,590 --> 00:23:24,830
and so when he becomes president

380
00:23:24,830 --> 00:23:30,540
he does nothing to reign in this wild
speculative fervor

381
00:23:30,540 --> 00:23:34,240
he doesn't do anything to encourage the
federal reserve with the Treasury

382
00:23:34,240 --> 00:23:37,520
to tighten up margin speculation the
stock market

383
00:23:37,520 --> 00:23:41,590
on in private gruver talk to ban

384
00:23:41,590 --> 00:23:45,320
orgy of speculation but like his
predecessor coolidge

385
00:23:45,320 --> 00:23:48,620
he had no appetite for regulation of the
marketplace

386
00:23:48,620 --> 00:23:52,790
I'm yet who was not alone in his fears

387
00:23:52,790 --> 00:23:55,899
but the stock market bubble might be
about to bust

388
00:23:55,900 --> 00:24:00,830
0 days after the inauguration speech a
prominent and highly respected banker

389
00:24:00,830 --> 00:24:01,970
Paul Wohlberg

390
00:24:01,970 --> 00:24:06,700
broke ranks with the wall street
aristocracy and issued a public warning

391
00:24:06,700 --> 00:24:12,100
the orgies oven restrain speculation are
permitted to spread too far

392
00:24:12,100 --> 00:24:15,320
the ultimate collapse is certain to
bring about a general

393
00:24:15,320 --> 00:24:19,520
depression involving the entire country
I'm

394
00:24:19,520 --> 00:24:23,770
my great grandfather issued a warning in
march of nineteen twenty-nine

395
00:24:23,770 --> 00:24:27,220
the actual use the word %uh a depression

396
00:24:27,220 --> 00:24:31,160
and he was shouted down I think he was
disregarded he was

397
00:24:31,160 --> 00:24:35,20
you know a party pooper I mean no no
everything's fine

398
00:24:35,20 --> 00:24:39,300
that everybody's making money and having
a good time at the party

399
00:24:39,300 --> 00:24:42,350
so when there's a good bull market going
on

400
00:24:42,350 --> 00:24:46,929
the person who says this might be
getting overvalued you better be careful

401
00:24:46,930 --> 00:24:50,400
he sir dismissed overall for live at me

402
00:24:50,400 --> 00:24:54,220
he may mean nothing but a good time ttyl

403
00:24:54,220 --> 00:24:57,630
being no I don't know in 10

404
00:24:57,630 --> 00:25:02,830
long boats prediction fell on deaf ears
and between May and September 1929

405
00:25:02,830 --> 00:25:06,510
60 new companies were floated on the New
York Stock Exchange

406
00:25:06,510 --> 00:25:10,100
adding more than a hundred million
shares to the marketplace

407
00:25:10,100 --> 00:25:14,60
fueling the investment bubble I where

408
00:25:14,60 --> 00:25:17,80
you hear the same things in every bubble

409
00:25:17,80 --> 00:25:20,750
this time is different it to differ
financial world it's a new financial

410
00:25:20,750 --> 00:25:22,770
rules in fact Groucho Marx

411
00:25:22,770 --> 00:25:26,410
went to his broker at some point today I
just understand how these prices just

412
00:25:26,410 --> 00:25:27,330
keep going up

413
00:25:27,330 --> 00:25:30,899
in the broker said to him well you have
to understand

414
00:25:30,900 --> 00:25:35,000
it's a global economy now and this was
1928 1929

415
00:25:35,000 --> 00:25:40,770
she I think I've heard that sometime
since then some professional speculators

416
00:25:40,770 --> 00:25:43,370
sense that the market was overheating

417
00:25:43,370 --> 00:25:50,209
the more astute good out during the
summer one day apparently Joe Kennedy

418
00:25:50,210 --> 00:25:51,480
according to Joe Kennedy

419
00:25:51,480 --> 00:25:56,510
later recollections he said if the shoe
shine going knows as much as I do about

420
00:25:56,510 --> 00:26:03,430
the stock market maybe it's time for me
to get out

421
00:26:03,430 --> 00:26:06,770
in September the market became
increasingly volatile

422
00:26:06,770 --> 00:26:11,220
behind closed doors president who is on
the lease was grueling

423
00:26:11,220 --> 00:26:17,170
herbert hoover they keep making
enquiries among his wall street rans

424
00:26:17,170 --> 00:26:22,410
asking if he should be concerned and he
received a memo from Thomas to be Lamont

425
00:26:22,410 --> 00:26:23,760
who is the senior partner

426
00:26:23,760 --> 00:26:28,230
and JP Morgan & Company on grandfathered
sat in that letter

427
00:26:28,230 --> 00:26:32,580
the market will correct itself and it
doesn't appear to the would not appear

428
00:26:32,580 --> 00:26:35,530
to be any need for any kind of
government intervention in the market

429
00:26:35,530 --> 00:26:36,410
who

430
00:26:36,410 --> 00:26:39,500
le monde reassuring hoover that there
was absolutely

431
00:26:39,500 --> 00:26:43,000
no cause true concern and the memo

432
00:26:43,000 --> 00:26:46,100
intended but a line the future appears
brilliant

433
00:26:46,100 --> 00:26:53,100
Co

434
00:26:54,899 --> 00:26:55,989
five days later

435
00:26:55,990 --> 00:27:02,899
the stock market crashed the rule

436
00:27:02,899 --> 00:27:06,229
no one knows what triggered the sudden
loss of confidence

437
00:27:06,230 --> 00:27:09,519
that happened at the end of Wednesday
23rd October

438
00:27:09,519 --> 00:27:14,539
but I would have no way who shop for an
automobile stocks provoked a frantic

439
00:27:14,539 --> 00:27:15,879
last hours trading

440
00:27:15,880 --> 00:27:19,320
0 millions shares was suddenly sold

441
00:27:19,320 --> 00:27:24,439
the the next day the Great Crash of 1929

442
00:27:24,440 --> 00:27:30,80
began on 0

443
00:27:30,80 --> 00:27:30,860
them

444
00:27:30,860 --> 00:27:36,10
October 24th 1929 black thursday is
often considered to be the beginning of

445
00:27:36,10 --> 00:27:36,730
the crash

446
00:27:36,730 --> 00:27:40,970
there was really a tremendous drop was
scared a lot of people

447
00:27:40,970 --> 00:27:43,460
I'm

448
00:27:43,460 --> 00:27:47,50
it is impossible to underestimate the
shock

449
00:27:47,50 --> 00:27:51,490
a sense of stunned disbelief people
panic

450
00:27:51,490 --> 00:27:54,980
is the market just drops ten drops in
drops

451
00:27:54,980 --> 00:27:59,900
the desperate for news thousands
gathered outside the stock exchange

452
00:27:59,900 --> 00:28:05,90
the tremendous crowd standing there
barry grimly staring had man who

453
00:28:05,90 --> 00:28:10,919
I just been wiped out city officials are
so alarmed by the edge

454
00:28:10,920 --> 00:28:14,770
that they send 400 Mounted Police
cheering that there's going to be a kind

455
00:28:14,770 --> 00:28:15,200
of

456
00:28:15,200 --> 00:28:19,750
bash deal like invasion I love the stock
exchange

457
00:28:19,750 --> 00:28:24,240
and it said that there was a strange

458
00:28:24,240 --> 00:28:29,80
murmur in the air that there is a very
very strange kind of haunting sound

459
00:28:29,80 --> 00:28:30,639
which must have been the cumulative

460
00:28:30,640 --> 00:28:34,390
rice is a beloved these people sharing
their concerns

461
00:28:34,390 --> 00:28:39,110
the popular reaction is one helluva

462
00:28:39,110 --> 00:28:46,110
this can't be happening go

463
00:28:46,730 --> 00:28:49,830
a visitor from Britain was there that
day too you

464
00:28:49,830 --> 00:28:54,270
winston churchill had invested much of
his own money in the US stock market

465
00:28:54,270 --> 00:28:57,650
and had decided to pay a visit done

466
00:28:57,650 --> 00:29:01,720
I happened to be walking down Wall
Street the worst moment of the panic

467
00:29:01,720 --> 00:29:06,660
the package stranger who recognize me
invited me to enter the gallery

468
00:29:06,660 --> 00:29:10,450
on the stock exchange I expected to see
pandemonium

469
00:29:10,450 --> 00:29:14,160
but the spectacle that made my eyes was
one of surprising

470
00:29:14,160 --> 00:29:19,500
com and cordelia's the 1200 members at
the stock exchange

471
00:29:19,500 --> 00:29:22,950
while walking to and fro like a slow
motion picture

472
00:29:22,950 --> 00:29:26,120
Novartis stamp and he copper anytime a

473
00:29:26,120 --> 00:29:29,419
enormous block some securities and a
third

474
00:29:29,420 --> 00:29:34,549
their own prices

475
00:29:34,549 --> 00:29:37,490
churchill was to lose a fortune in the
crash that day

476
00:29:37,490 --> 00:29:39,50
in

477
00:29:39,50 --> 00:29:42,120
outside the crowed continue to wait for
news

478
00:29:42,120 --> 00:29:46,60
rumors were fueling the mounting panic
in

479
00:29:46,60 --> 00:29:47,720
in

480
00:29:47,720 --> 00:29:52,59
once the crash is under way the real
question becomes

481
00:29:52,59 --> 00:29:55,809
one of confidence when you lose all
confidence

482
00:29:55,809 --> 00:29:59,220
in the economy hurting bad go down
together

483
00:29:59,220 --> 00:30:02,360
and sold the chief investment elite

484
00:30:02,360 --> 00:30:07,59
used a great pains to try to restore
that confidence to convince people that

485
00:30:07,59 --> 00:30:11,760
the economy and the stock market is
sound I'm

486
00:30:11,760 --> 00:30:15,530
the bankers knew they had to do
something to avert a total financial

487
00:30:15,530 --> 00:30:16,410
meltdown

488
00:30:16,410 --> 00:30:21,150
I'm a Times journalist watched events
unfold

489
00:30:21,150 --> 00:30:22,840
I'm

490
00:30:22,840 --> 00:30:25,490
the crowd grew thicker and noisy room

491
00:30:25,490 --> 00:30:28,250
and then there was an Eddie in the
middle of the room the man in shirt

492
00:30:28,250 --> 00:30:30,769
sleeves was pushing his way across the
street

493
00:30:30,769 --> 00:30:35,820
in the direction of the Morgan office
this was Charles the mitchell

494
00:30:35,820 --> 00:30:40,620
chairman of the National City Bank in
the post his way into the office is at

495
00:30:40,620 --> 00:30:41,689
the house and Morgan

496
00:30:41,690 --> 00:30:46,59
little later we learn good economic boom

497
00:30:46,59 --> 00:30:50,250
Charles Mitchell had been summoned to a
meeting at the office is a JP Morgan

498
00:30:50,250 --> 00:30:53,570
I'm around the table with four other
leading bankers

499
00:30:53,570 --> 00:30:58,200
including Richard Whitney vice president
at the New York Stock Exchange

500
00:30:58,200 --> 00:31:01,720
these were some of the wealthiest
businessmen in america

501
00:31:01,720 --> 00:31:05,309
representing around six billion dollars
in assets

502
00:31:05,309 --> 00:31:10,40
chairman was Thomas Lamont

503
00:31:10,40 --> 00:31:14,50
I think it was a great shock to
grandfather they did not foresee that

504
00:31:14,50 --> 00:31:16,350
anything like the great crash that took
place

505
00:31:16,350 --> 00:31:19,929
what happened grandfather called a
meeting

506
00:31:19,930 --> 00:31:24,570
at his office at 23 Wall Street a summer
leading bankers in town

507
00:31:24,570 --> 00:31:28,330
and figured out what they could do to
support the stock market which was

508
00:31:28,330 --> 00:31:29,360
plunging

509
00:31:29,360 --> 00:31:34,449
what they came up with was a planned to
put together a pool $250 million dollars

510
00:31:34,450 --> 00:31:40,410
and those funds would be used to support
a key listed stocks

511
00:31:40,410 --> 00:31:43,820
at lunch time Richard quickly marched
across the street

512
00:31:43,820 --> 00:31:46,820
back to the trading floor the stock
exchange the

513
00:31:46,820 --> 00:31:51,560
really huge injection of the bankers
cash Whitney hope to get the market

514
00:31:51,560 --> 00:31:52,530
moving again

515
00:31:52,530 --> 00:31:56,590
Whitney parades over to the desk where
US Steel's

516
00:31:56,590 --> 00:32:01,709
being sold and by age twenty five
thousand shares of US Steel

517
00:32:01,710 --> 00:32:05,370
at a price well above when it was then
selling for

518
00:32:05,370 --> 00:32:08,879
and then makes a a snitch similar prom
and i'd

519
00:32:08,880 --> 00:32:11,890
to other blue chip stocks and makes a
similar purchased

520
00:32:11,890 --> 00:32:16,260
the idea being we will now restore
everybody's confidence in the market

521
00:32:16,260 --> 00:32:20,870
and other great financial Titans have
the time including John D rockefeller

522
00:32:20,870 --> 00:32:22,250
make similar purchases

523
00:32:22,250 --> 00:32:25,490
hoping that this symbolic act will

524
00:32:25,490 --> 00:32:28,610
turn the times

525
00:32:28,610 --> 00:32:33,500
and it worked such was the magical power

526
00:32:33,500 --> 00:32:38,310
above the with the name and the Morgan
name that stock suddenly turned around

527
00:32:38,310 --> 00:32:39,659
and started to

528
00:32:39,660 --> 00:32:42,810
go up

529
00:32:42,810 --> 00:32:47,550
by now news that the meeting had leaked
out and journalists with disputed

530
00:32:47,550 --> 00:32:49,850
information

531
00:32:49,850 --> 00:32:54,399
grandfather was meeting with the group
to reporters who were sampled on wall

532
00:32:54,400 --> 00:32:56,570
street outside over his back office

533
00:32:56,570 --> 00:33:01,260
his style was always too stay calm and
never say anything

534
00:33:01,260 --> 00:33:05,840
that plugged up cause served with that
would erode people's confidence in the

535
00:33:05,840 --> 00:33:08,830
stock market I'm

536
00:33:08,830 --> 00:33:13,139
sober had missed the amount received is
with the mana soon reassuring

537
00:33:13,140 --> 00:33:16,600
there was like the man who comes on the
stage for burning theater

538
00:33:16,600 --> 00:33:20,310
and urges everyone to keep perfectly
cool stating

539
00:33:20,310 --> 00:33:23,810
there is no cause for alarm I'm

540
00:33:23,810 --> 00:33:27,179
there has been a little distressed
selling the stock exchange

541
00:33:27,180 --> 00:33:31,390
and we have held a meeting to discuss
the situation we have found that there

542
00:33:31,390 --> 00:33:31,970
are no

543
00:33:31,970 --> 00:33:35,920
houses and difficulty and margins are
being maintained

544
00:33:35,920 --> 00:33:41,560
satisfactorily the grandfather many
others felt that the worst was over

545
00:33:41,560 --> 00:33:44,929
%uh but they were very very wrong

546
00:33:44,930 --> 00:33:51,930
tho over the weekend the bankers
intervention seemed to have worked

547
00:33:53,440 --> 00:33:57,160
trading on Friday and Saturday was
captain uneventful

548
00:33:57,160 --> 00:34:00,360
president hoover also tried to steady
nerves

549
00:34:00,360 --> 00:34:03,969
by repeating a mantra that has been used
during market crashes

550
00:34:03,970 --> 00:34:07,850
many times since the fundamental
business in the country

551
00:34:07,850 --> 00:34:10,850
that is production and distribution of
commodities

552
00:34:10,850 --> 00:34:15,870
is on a sound and prosperous basis
within the offices of the financial

553
00:34:15,870 --> 00:34:16,440
district

554
00:34:16,440 --> 00:34:20,409
there was total chaos why things that we
forget

555
00:34:20,409 --> 00:34:24,679
is how from into the technology was so
many stocks traded on

556
00:34:24,679 --> 00:34:28,918
October 24th but it took four hours for
the ticker to Pratt

557
00:34:28,918 --> 00:34:32,580
all at the stock trades after the market
had closed

558
00:34:32,580 --> 00:34:36,250
through the taker hopelessly swamped

559
00:34:36,250 --> 00:34:40,659
fell hours behind the actual trading
became completely meaningless

560
00:34:40,659 --> 00:34:45,149
all night long the lights blazed in the
windows a bit I'll office buildings

561
00:34:45,149 --> 00:34:48,609
where margin clocks and bookkeepers
struggled with the

562
00:34:48,610 --> 00:34:51,840
desperate ask are trying to clear one
day's business

563
00:34:51,840 --> 00:34:55,230
they will the next they began they
fainted at their desks

564
00:34:55,230 --> 00:34:58,830
the weary run afoul exhausted on the
marble floors and banks

565
00:34:58,830 --> 00:35:04,390
can slap cool

566
00:35:04,390 --> 00:35:07,370
in

567
00:35:07,370 --> 00:35:12,279
on Monday the stock tickers running over
tape panicking investors desperate for

568
00:35:12,280 --> 00:35:13,590
the later share prices

569
00:35:13,590 --> 00:35:17,470
jammed the telephone lines between New
York and other major cities

570
00:35:17,470 --> 00:35:22,330
for the first time many speculators were
discovering the downside of

571
00:35:22,330 --> 00:35:28,160
easy credit and buying on margin the
fairly significant number of people who

572
00:35:28,160 --> 00:35:31,9
are buying stocks in the nineteen
twenties were buying good

573
00:35:31,10 --> 00:35:34,190
with borrowed money have course the
Wonder

574
00:35:34,190 --> 00:35:37,930
Feb buying stocks with borrowed money
his third

575
00:35:37,930 --> 00:35:43,40
the gains I tremendously accelerated and
magnified

576
00:35:43,40 --> 00:35:47,630
on the way up and then press on the way
down the entire machineries thrown

577
00:35:47,630 --> 00:35:50,830
into rivers and the losses are also

578
00:35:50,830 --> 00:35:53,940
magnified ok

579
00:35:53,940 --> 00:35:58,610
all these people who had borrowed to buy
stock now had to put up more collateral

580
00:35:58,610 --> 00:36:01,690
and this was something that had not
happened as the market had gone happen

581
00:36:01,690 --> 00:36:02,240
up

582
00:36:02,240 --> 00:36:06,299
you've got twenty five dollars down for
a hundred dollar stock but now I the

583
00:36:06,300 --> 00:36:06,860
stock

584
00:36:06,860 --> 00:36:11,390
has dropped on so what happened as the
brokerages that email these loans got

585
00:36:11,390 --> 00:36:13,529
very concerned that the loans will be
paid back

586
00:36:13,530 --> 00:36:16,860
I'm people got calls to bring in more
cash

587
00:36:16,860 --> 00:36:21,410
whether stocks to be sold on account
need six hundred dollars

588
00:36:21,410 --> 00:36:24,520
unless there's amount received before 1
p.m. Tuesday

589
00:36:24,520 --> 00:36:28,870
all South all securities in your account
consider this not as

590
00:36:28,870 --> 00:36:33,29
to that effect and that's a difficult
thing to do some people didn't have

591
00:36:33,30 --> 00:36:34,420
additional cash to bring in

592
00:36:34,420 --> 00:36:38,90
or they are it took him some time
perhaps to do it but the brokers were

593
00:36:38,90 --> 00:36:40,20
very uneasy they couldn't wait

594
00:36:40,20 --> 00:36:45,80
in and so Monday did market begins to
fall even at a steeper rate than

595
00:36:45,80 --> 00:36:48,810
now on Thursday intact this would turn
out to be

596
00:36:48,810 --> 00:36:53,299
wanna be very worst days ever in this in
history the United States stock market

597
00:36:53,300 --> 00:36:56,950
the

598
00:36:56,950 --> 00:37:01,810
1929 when the stock market crashed I was
very young lady

599
00:37:01,810 --> 00:37:04,820
just seven years old however

600
00:37:04,820 --> 00:37:09,700
I'd kill remember bits and pieces up
that day very clearly in my memory

601
00:37:09,700 --> 00:37:13,9
we didn't have many mean for
communication

602
00:37:13,10 --> 00:37:18,210
and when something extraordinary
happened the papers but put out an extra

603
00:37:18,210 --> 00:37:21,290
as that that's what it's called extra to
such

604
00:37:21,290 --> 00:37:25,90
and a little boys in a little P caps
would come running through the streets

605
00:37:25,90 --> 00:37:28,760
screening extra extra read all about it

606
00:37:28,760 --> 00:37:33,310
and invariably he somebody in the house
would go down and buy a daily for 2

607
00:37:33,310 --> 00:37:35,200
cents and then we would know what
happened

608
00:37:35,200 --> 00:37:40,439
and that's how we found out about the
crash at the time

609
00:37:40,440 --> 00:37:45,330
me it was with a family friend but news
came that the friends and

610
00:37:45,330 --> 00:37:49,230
had lost everything the lady was crying

611
00:37:49,230 --> 00:37:52,460
quietly shoeless prying quietly

612
00:37:52,460 --> 00:37:56,950
and wringing her hands and wringing
hands and walking from room to room to

613
00:37:56,950 --> 00:37:57,439
roam

614
00:37:57,440 --> 00:38:04,440
show that was my actual memory up that
day

615
00:38:06,560 --> 00:38:08,589
Hey

616
00:38:08,589 --> 00:38:12,589
on Tuesday morning some other most
famous names in corporate America

617
00:38:12,589 --> 00:38:16,259
so their share price plummeted US Steel

618
00:38:16,259 --> 00:38:21,249
radio General Motors stocks that had
been symbols of the boom years

619
00:38:21,249 --> 00:38:24,598
the and Tuesday there were

620
00:38:24,599 --> 00:38:29,219
tremendous waves selling the just kept
coming

621
00:38:29,219 --> 00:38:32,769
this time the selling was so powerful

622
00:38:32,769 --> 00:38:36,149
and so relentless there was no lunch
time

623
00:38:36,150 --> 00:38:40,99
meeting at JP Morgan clearly the volume
and the sales

624
00:38:40,99 --> 00:38:44,589
overwhelmed any possibility the bankers
trying to

625
00:38:44,589 --> 00:38:48,880
stemmed the tide way evening Tuesday

626
00:38:48,880 --> 00:38:53,439
all-american stocks were worth about 22
percent less than they were

627
00:38:53,439 --> 00:38:58,98
when the market opened in the morning on
Monday

628
00:38:58,99 --> 00:39:01,720
36 hours the last 22 percent of the
value of american industry

629
00:39:01,720 --> 00:39:05,598
homer

630
00:39:05,599 --> 00:39:09,859
was president and he and Andrew Mellon

631
00:39:09,859 --> 00:39:13,880
very the Secretary to the Treasury were

632
00:39:13,880 --> 00:39:19,190
way to the ride and felt that it was not
the government's

633
00:39:19,190 --> 00:39:23,570
job to interfere with theirs they
believed in pure

634
00:39:23,570 --> 00:39:28,920
I'm feathered cap tourism and so they
did very little

635
00:39:28,920 --> 00:39:32,970
or nothing to alleviate the crash

636
00:39:32,970 --> 00:39:36,310
major insolvent self

637
00:39:36,310 --> 00:39:42,140
the market broke very sharply and a
lotta people were wiped out with it

638
00:39:42,140 --> 00:39:48,540
it was very painful almost everybody
lost money as has happened now

639
00:39:48,540 --> 00:39:51,950
bonaparte and I'm dogwood today New York
Stock

640
00:39:51,950 --> 00:39:55,279
not find them thing and banking on

641
00:39:55,280 --> 00:39:58,480
drop down a mine be I'm the Packers any

642
00:39:58,480 --> 00:40:02,410
it's estimated that by the end of these
five days trading

643
00:40:02,410 --> 00:40:05,848
$25 billion dollars worth of personal
wealth

644
00:40:05,849 --> 00:40:11,520
had simply disappear bail you out the
stock market continues to sag without

645
00:40:11,520 --> 00:40:11,990
and

646
00:40:11,990 --> 00:40:17,270
have holders in to sell everything that
I figure I'll have about 500 left

647
00:40:17,270 --> 00:40:20,630
if I'm lucky play humble ending to a
potential profit

648
00:40:20,630 --> 00:40:24,109
not four months ago on nearly a hundred
thousand

649
00:40:24,109 --> 00:40:28,670
at least I said to myself I lost all in
the greatest panic in history

650
00:40:28,670 --> 00:40:32,89
I was very lucky

651
00:40:32,89 --> 00:40:36,549
I never lost my job I did get a cut

652
00:40:36,550 --> 00:40:41,359
shali progeny by employees you a
well-paid people

653
00:40:41,359 --> 00:40:46,720
when they tell me about a shaded I use
by Lee

654
00:40:46,720 --> 00:40:53,720
I said I thought you that a fire but
he's

655
00:40:54,40 --> 00:40:57,590
those who could afford to face their
losses with black humor

656
00:40:57,590 --> 00:41:00,470
I reminded him and

657
00:41:00,470 --> 00:41:03,379
ball me sure why

658
00:41:03,380 --> 00:41:06,610
yeah got yeah

659
00:41:06,610 --> 00:41:10,640
me and me and I home and museum
education

660
00:41:10,640 --> 00:41:15,560
yeah in hand million dollars yeah

661
00:41:15,560 --> 00:41:17,779
dollar fan

662
00:41:17,780 --> 00:41:21,809
can the market do came eighth

663
00:41:21,809 --> 00:41:26,239
yeah 10 million do anything I

664
00:41:26,239 --> 00:41:30,39
in detention math

665
00:41:30,39 --> 00:41:33,359
my hand okay and

666
00:41:33,359 --> 00:41:35,549
Canada Keith

667
00:41:35,550 --> 00:41:40,140
yeah me and our way all campaign faith

668
00:41:40,140 --> 00:41:43,210
and down made a math

669
00:41:43,210 --> 00:41:47,920
on another performer who had gambled and
lost

670
00:41:47,920 --> 00:41:52,250
was groucho marx his reckless
speculation cost him everything he

671
00:41:52,250 --> 00:41:53,60
turned

672
00:41:53,60 --> 00:41:55,810
on

673
00:41:55,810 --> 00:41:58,950
the freezer Alice Austen the
photographer from Staten Island

674
00:41:58,950 --> 00:42:02,419
was also typical love those who had been
alluded to the market

675
00:42:02,420 --> 00:42:07,170
without realizing the risks basically
she loses everything

676
00:42:07,170 --> 00:42:10,860
in 29 30 her counters wiped out

677
00:42:10,860 --> 00:42:14,360
and it comes a shock for

678
00:42:14,360 --> 00:42:18,600
for our saw stern and I don't think she
believes it like a lot of people you

679
00:42:18,600 --> 00:42:19,750
just can't believe it

680
00:42:19,750 --> 00:42:23,950
and she thinks all I have to do is to
wait a little bit in the market will

681
00:42:23,950 --> 00:42:24,750
come back

682
00:42:24,750 --> 00:42:27,890
and she continued living ass

683
00:42:27,890 --> 00:42:33,870
if she was rich and have she moore gets
our source in mortgage to our house

684
00:42:33,870 --> 00:42:38,9
not to pay our bills but because she
once again want to take offense a trip

685
00:42:38,10 --> 00:42:40,410
to York

686
00:42:40,410 --> 00:42:44,560
my father lost everything he was losing
everything but he was 22

687
00:42:44,560 --> 00:42:47,580
he took it magnanimously you know is

688
00:42:47,580 --> 00:42:52,720
2022 it it it isn't as dramatic the
people around him were in poor

689
00:42:52,720 --> 00:42:55,850
go establish people in their fifties and
sixties and

690
00:42:55,850 --> 00:43:02,420
we're losing their life savings Werner
absolute panic

691
00:43:02,420 --> 00:43:06,950
not everyone coped with their losses
although the number of suicides has been

692
00:43:06,950 --> 00:43:07,839
exaggerated

693
00:43:07,840 --> 00:43:14,840
to some it seemed the only way out I
know that people read about the stories

694
00:43:14,880 --> 00:43:16,100
on wall street. Cup

695
00:43:16,100 --> 00:43:20,700
people opening the windows in their
offices and jumping out that actually

696
00:43:20,700 --> 00:43:21,710
happened that isn't

697
00:43:21,710 --> 00:43:26,420
the urban legend people did commit
suicide up into it works only in forty

698
00:43:26,420 --> 00:43:28,60
years on wall street

699
00:43:28,60 --> 00:43:32,670
and had amassed fortunes within
appropriated days lost everything

700
00:43:32,670 --> 00:43:38,490
that I'm sorry I was unable to return
the two books until now

701
00:43:38,490 --> 00:43:42,529
the conditions down in the financial
neighborhood have been such as to keep

702
00:43:42,530 --> 00:43:43,190
us working

703
00:43:43,190 --> 00:43:44,640
cool

704
00:43:44,640 --> 00:43:48,950
yesterday woman jumped from the roof of
our building forty four floors my past

705
00:43:48,950 --> 00:43:49,480
our window

706
00:43:49,480 --> 00:43:52,920
they saw her body lying in the street

707
00:43:52,920 --> 00:43:56,430
the cyber so harrowing but I became hap
sick

708
00:43:56,430 --> 00:43:59,660
the new

709
00:43:59,660 --> 00:44:05,210
0 the effect to the catastrophic crash
in Wall Street

710
00:44:05,210 --> 00:44:10,69
rippled out across america I'm even
those who never owned shares

711
00:44:10,69 --> 00:44:13,230
and would never benefited from the stock
market boom

712
00:44:13,230 --> 00:44:18,579
became victims to 0 the crash and
undermined Americans faith in their

713
00:44:18,579 --> 00:44:20,390
fragile banking system

714
00:44:20,390 --> 00:44:23,538
made up of thousands of small town banks
a black

715
00:44:23,539 --> 00:44:28,30
the size a reputation to convince
customers that their money was safe

716
00:44:28,30 --> 00:44:31,730
0 as confidence in the economy sank
further

717
00:44:31,730 --> 00:44:36,299
a domino effect began in 1931

718
00:44:36,299 --> 00:44:41,420
all the 2000 banks failed 0

719
00:44:41,420 --> 00:44:44,650
after the crash the banks closed

720
00:44:44,650 --> 00:44:48,349
that I think which affected us little
are curiously

721
00:44:48,349 --> 00:44:52,309
us many ask the people at my stature and

722
00:44:52,309 --> 00:44:55,79
many people have money in the bank
little bit about a couple hundred

723
00:44:55,79 --> 00:44:55,740
dollars

724
00:44:55,740 --> 00:45:00,779
you know thousand dollars maybe there
was no infrastructure then there was no

725
00:45:00,780 --> 00:45:04,869
Federal Deposit Insurance Corporation
the guarantee people's deposits there

726
00:45:04,869 --> 00:45:07,10
was no way to backup the bank's

727
00:45:07,10 --> 00:45:10,210
so if the banks had made bad choices

728
00:45:10,210 --> 00:45:13,730
you is a depositor paid for you want to
go Germany wasn't fair

729
00:45:13,730 --> 00:45:18,240
0 and then people here that the bank
down the street wasn't good

730
00:45:18,240 --> 00:45:21,500
and they worried about their own bank in
there because a run on their bank in a

731
00:45:21,500 --> 00:45:23,809
bit it became a terrible vicious cycle

732
00:45:23,809 --> 00:45:28,410
0 something like three thousand banks
closed in the following

733
00:45:28,410 --> 00:45:32,819
couple of years after that 0 the whole
financial system then

734
00:45:32,819 --> 00:45:36,58
seems he need not just unstable but

735
00:45:36,59 --> 00:45:41,349
worthless after that when people save
money

736
00:45:41,349 --> 00:45:45,799
they were very leery of banks and money
when under the mattress

737
00:45:45,799 --> 00:45:49,890
that

738
00:45:49,890 --> 00:45:52,990
way

739
00:45:52,990 --> 00:45:56,890
the stock market crash of 1929 did not
create

740
00:45:56,890 --> 00:46:01,450
the Great Depression but it did start a
sequence of events that

741
00:46:01,450 --> 00:46:04,950
eventually culminated with the great
depression

742
00:46:04,950 --> 00:46:09,149
well you know it's summer this is gonna
sounds sort of familiar

743
00:46:09,150 --> 00:46:13,109
the banks were loaning money for the
stock market companies were loaning

744
00:46:13,109 --> 00:46:14,930
money the brokerages were loaning money

745
00:46:14,930 --> 00:46:18,589
and when that does prices fell all that
money just disappeared

746
00:46:18,590 --> 00:46:24,180
who almost mediately companies began to
feel the patch up not having the capital

747
00:46:24,180 --> 00:46:25,830
and having lost money

748
00:46:25,830 --> 00:46:29,819
and they began to lay off people to let
people go to shut down production

749
00:46:29,820 --> 00:46:34,000
there were mass bankruptcies does
liquidity crisis on exactly the same

750
00:46:34,000 --> 00:46:35,359
kind we have today

751
00:46:35,359 --> 00:46:38,970
that is shaken all kinds of businesses
could no longer get

752
00:46:38,970 --> 00:46:42,439
loans to keep themselves afloat even if
those businesses

753
00:46:42,440 --> 00:46:47,70
were entirely solvent they couldn't get
the kind of short term commercial credit

754
00:46:47,70 --> 00:46:50,200
to pay their workers to buy new
inventory

755
00:46:50,200 --> 00:46:55,129
to pay their suppliers then surely began
going bankrupt and as they went bankrupt

756
00:46:55,130 --> 00:46:56,250
they lay people off

757
00:46:56,250 --> 00:46:59,710
and as a lay people off demand fell

758
00:46:59,710 --> 00:47:02,980
and this is what a does traumatic damage

759
00:47:02,980 --> 00:47:07,970
to the whole society so traumatic that
its second only to the Civil War

760
00:47:07,970 --> 00:47:12,959
he in Ian in American Memory as a tragic
moment in American history

761
00:47:12,960 --> 00:47:16,700
my father had a

762
00:47:16,700 --> 00:47:20,000
minus sized insurance brokerage

763
00:47:20,000 --> 00:47:23,980
agency one night at dinner my father

764
00:47:23,980 --> 00:47:27,89
said that he had a fire an employee

765
00:47:27,89 --> 00:47:30,520
and I i a very cavalierly said well

766
00:47:30,520 --> 00:47:34,550
he'll be able to get a job already and
my father said now

767
00:47:34,550 --> 00:47:38,690
he's an older man who is in very capable

768
00:47:38,690 --> 00:47:42,510
and I don't think he can and at that
point

769
00:47:42,510 --> 00:47:47,440
my father burst into tears it was the
first time I'd

770
00:47:47,440 --> 00:47:54,440
ever seen my father cried

771
00:47:55,10 --> 00:47:58,40
day with such a change in our lives and

772
00:47:58,40 --> 00:48:01,579
all the people around me after the crash

773
00:48:01,579 --> 00:48:06,240
that many of my girlfriends fathers who
lost their jobs

774
00:48:06,240 --> 00:48:11,200
and they couldn't Pagerank over a decade

775
00:48:11,200 --> 00:48:12,480
Paul

776
00:48:12,480 --> 00:48:15,670
the poverty which really old around us

777
00:48:15,670 --> 00:48:20,940
men had no clothing they were in rags
merely rags they used to wrap their feet

778
00:48:20,940 --> 00:48:22,99
up a newspaper

779
00:48:22,99 --> 00:48:27,390
and put them in Kabul and makeshift
shoes to walk around the street

780
00:48:27,390 --> 00:48:33,109
the new and then if you took a walk over
to Central Park he saw this big

781
00:48:33,109 --> 00:48:37,160
area a deserted reservoir that had been
drained

782
00:48:37,160 --> 00:48:41,420
and they made little hot I've cod black
boxes

783
00:48:41,420 --> 00:48:46,260
and they would sleep Gail overnight and
they called it hoover they'll

784
00:48:46,260 --> 00:48:49,910
crossed out with the name about
president at the time I have crossed

785
00:48:49,910 --> 00:48:50,509
polish

786
00:48:50,510 --> 00:48:54,420
stock market crash in oldest poverty

787
00:48:54,420 --> 00:48:58,849
was across pride in his lap it was

788
00:48:58,849 --> 00:49:04,540
really really pity fell

789
00:49:04,540 --> 00:49:07,779
the like many others the photographer

790
00:49:07,780 --> 00:49:10,800
Alice Austen struggle to keep up
mortgage payments

791
00:49:10,800 --> 00:49:15,840
as the Great Depression too cold a few
years into the depression Alice Austen

792
00:49:15,840 --> 00:49:16,980
runs out of money

793
00:49:16,980 --> 00:49:21,300
there's nothing left she's out of her
house

794
00:49:21,300 --> 00:49:24,390
they take her to a poorhouse

795
00:49:24,390 --> 00:49:28,430
I and it's a poor house on a Dickens
novel and she lingers there for a couple

796
00:49:28,430 --> 00:49:29,460
of years

797
00:49:29,460 --> 00:49:33,290
rear rack use the her photographs are
discovered

798
00:49:33,290 --> 00:49:37,570
of your photos are sold to time in life
magazine

799
00:49:37,570 --> 00:49:41,470
and that earns her enough money to move
out at the pourhouse

800
00:49:41,470 --> 00:49:46,859
into a decent retirement home in a sense
for photographs

801
00:49:46,860 --> 00:49:51,20
come to her rescue and take a router
poverty in

802
00:49:51,20 --> 00:49:57,600
and into year two dismantle the whole
world who's who accurately predicted the

803
00:49:57,600 --> 00:49:59,130
crash and the depression

804
00:49:59,130 --> 00:50:03,20
save the bank he ran from disaster by
getting go to the market to

805
00:50:03,20 --> 00:50:08,410
time but it was a little consolation to
my great grandfather

806
00:50:08,410 --> 00:50:12,600
probably never really recovered his own
personal equilibrium

807
00:50:12,600 --> 00:50:15,859
after the crash

808
00:50:15,859 --> 00:50:19,589
to be called because Sandra of Wall
Street %uh

809
00:50:19,589 --> 00:50:23,389
I think was very painful for him and
with if we all remember

810
00:50:23,389 --> 00:50:27,219
to Sandra she couldn't just see the
future she was also doomed

811
00:50:27,219 --> 00:50:30,539
to be disregarded and I think

812
00:50:30,539 --> 00:50:35,600
it cost him to it go into a depression
at his own

813
00:50:35,600 --> 00:50:38,910
I'm not sure that he ever would have
said

814
00:50:38,910 --> 00:50:42,129
I told you so I think he felt

815
00:50:42,130 --> 00:50:45,230
let it was really tragic. this worldwide

816
00:50:45,230 --> 00:50:48,970
depression could have been averted or
headed off for at least

817
00:50:48,970 --> 00:50:52,200
it didn't have to crash so hard and I
think

818
00:50:52,200 --> 00:50:55,919
arm it probably a led to his early death

819
00:50:55,920 --> 00:50:57,470
rule

820
00:50:57,470 --> 00:51:01,230
real he died what was the last year

821
00:51:01,230 --> 00:51:04,650
hoover's presidency and there was no end
in sight

822
00:51:04,650 --> 00:51:11,650
ass

823
00:51:13,650 --> 00:51:18,349
but in 1932 twelve years a Republican
rule came to an end

824
00:51:18,349 --> 00:51:21,869
I Franklin Delano Roosevelt

825
00:51:21,869 --> 00:51:26,400
this all unless flap that I will
faithfully execute the office

826
00:51:26,400 --> 00:51:30,240
up President of the United States
democrat franklin roosevelt

827
00:51:30,240 --> 00:51:34,578
was elected president in a landslide
victory his first task

828
00:51:34,579 --> 00:51:38,809
was to restore confidence there okay
yeah

829
00:51:38,809 --> 00:51:42,130
third spared cell

830
00:51:42,130 --> 00:51:48,119
ass seen as a savior roosevelt promised
a new deal to the american people

831
00:51:48,119 --> 00:51:53,230
and to regulate the financial system
that might be a threat

832
00:51:53,230 --> 00:51:57,269
governmentally love all banking and
credit

833
00:51:57,269 --> 00:52:04,269
and investment go there must be an end

834
00:52:04,859 --> 00:52:07,980
both speculation with up people money

835
00:52:07,980 --> 00:52:13,9
do the new president acted quickly

836
00:52:13,9 --> 00:52:17,660
he guaranteed bank deposits and
introduce laws forcing bankers to

837
00:52:17,660 --> 00:52:20,519
operate under strict government
supervision

838
00:52:20,519 --> 00:52:26,20
do

839
00:52:26,20 --> 00:52:27,630
you

840
00:52:27,630 --> 00:52:32,569
an investigation into the crash was
launched by the Senate Banking Committee

841
00:52:32,569 --> 00:52:37,69
Bay it would last more than three years
in the 10,000 pages of testimony

842
00:52:37,69 --> 00:52:40,519
blackened the reputation a wall street

843
00:52:40,519 --> 00:52:44,808
the committee's ambitious lawyer turned
into a corner challenge the banking

844
00:52:44,809 --> 00:52:45,440
elite

845
00:52:45,440 --> 00:52:49,900
to account for their behavior he calls
these bankers to testify

846
00:52:49,900 --> 00:52:53,460
and what is he learned he learns that
Charlie Mitchell love National City Corp

847
00:52:53,460 --> 00:52:55,719
had sold stock to his wife to

848
00:52:55,719 --> 00:53:01,119
avoid taxes pitcher Whitney who had so
boldly bought stock

849
00:53:01,119 --> 00:53:05,509
on Black Thursday lost money his own in
the embargo his brother and imagine

850
00:53:05,509 --> 00:53:06,219
where he began

851
00:53:06,219 --> 00:53:09,869
stealing from customers he ended up in
jail

852
00:53:09,869 --> 00:53:13,500
doing time do

853
00:53:13,500 --> 00:53:18,60
the most prestigious bank in america JP
Morgan was also found to be far from

854
00:53:18,60 --> 00:53:18,870
clinton's

855
00:53:18,870 --> 00:53:23,509
the hearings uncovered evidence of a
list that offered preferential deals on

856
00:53:23,510 --> 00:53:24,280
stocks

857
00:53:24,280 --> 00:53:28,660
two friends in high places including now
former president

858
00:53:28,660 --> 00:53:33,540
not only Morgan partners and bargain
family members but also prominent

859
00:53:33,540 --> 00:53:37,630
corporate executives and even some
politicians calvin coolidge was on the

860
00:53:37,630 --> 00:53:39,400
performance stock list for example

861
00:53:39,400 --> 00:53:44,800
that was a practice that a lot of people
fell was wrong

862
00:53:44,800 --> 00:53:48,730
for number core had a great quote he
said it was shocking disclosures have

863
00:53:48,730 --> 00:53:50,540
low standards in high places

864
00:53:50,540 --> 00:53:54,320
was I love because you know you could
say the same thing today

865
00:53:54,320 --> 00:53:59,210
in response to public outrage at the
bankers dirty dealings

866
00:53:59,210 --> 00:54:03,190
president roosevelt set up the
Securities and Exchange Commission

867
00:54:03,190 --> 00:54:06,200
its task to clean up Wall Street

868
00:54:06,200 --> 00:54:09,850
at its head he chose a man who knew more
about

869
00:54:09,850 --> 00:54:14,240
unethical practice that most president
roosevelt

870
00:54:14,240 --> 00:54:17,810
when he introduced the Securities and
Exchange Commission to regulate Wall

871
00:54:17,810 --> 00:54:18,270
Street

872
00:54:18,270 --> 00:54:21,970
named his old friend and supporter Joe
Kennedy to be the first chairman

873
00:54:21,970 --> 00:54:25,240
and that's putting the box in the
chicken coop

874
00:54:25,240 --> 00:54:30,569
the

875
00:54:30,570 --> 00:54:33,750
although roosevelt restored confidence
in the banking system

876
00:54:33,750 --> 00:54:38,869
the Great Depression would last until
the outbreak of World War two

877
00:54:38,869 --> 00:54:43,130
then there's no the globalized economy
meant that the crash in subsequent

878
00:54:43,130 --> 00:54:43,880
depression

879
00:54:43,880 --> 00:54:47,50
ripple does across the world mom

880
00:54:47,50 --> 00:54:50,160
in Britain there was a slump in
manufacturing

881
00:54:50,160 --> 00:54:53,970
and millions lost the jobs 0

882
00:54:53,970 --> 00:54:58,000
Germany still suffering from defeat in
the first world war

883
00:54:58,000 --> 00:55:03,180
was hit even harder I'll so many people
had their life savings destroyed during

884
00:55:03,180 --> 00:55:07,319
the great depression that had created in
many countries a desire for some

885
00:55:07,320 --> 00:55:09,550
authoritarian government to that with

886
00:55:09,550 --> 00:55:13,40
save them that would rescue the economy

887
00:55:13,40 --> 00:55:17,230
well no doubt that crash and the
depression

888
00:55:17,230 --> 00:55:20,260
strengthened anti-capitalist movements

889
00:55:20,260 --> 00:55:25,510
the communists to take it over in russia
and the were rising fascist movements

890
00:55:25,510 --> 00:55:27,820
mussolini was already in power and

891
00:55:27,820 --> 00:55:32,200
and Italy and hitler's political base
was growing in Germany

892
00:55:32,200 --> 00:55:36,830
and when american-style free market
capitalism

893
00:55:36,830 --> 00:55:40,880
suffered from this Wall Street Crash
followed by a depression

894
00:55:40,880 --> 00:55:44,240
it just strengthen those people who
wanted to say

895
00:55:44,240 --> 00:55:50,350
there's a better way low mile communism
and fascism prospered

896
00:55:50,350 --> 00:55:53,759
many nations put up barriers to prevent
free trade

897
00:55:53,760 --> 00:55:57,250
and turned inwards in an attempt to save
that economies

898
00:55:57,250 --> 00:56:00,910
the economic nationalism lead to trade
wars

899
00:56:00,910 --> 00:56:07,910
and later World War one

900
00:56:08,380 --> 00:56:11,880
eighty years of those who remember the
Bubba love the twenties

901
00:56:11,880 --> 00:56:15,869
and the crash that followed feel that
they have seen it all before

902
00:56:15,869 --> 00:56:20,650
I don't think we you learn anything from
it

903
00:56:20,650 --> 00:56:24,680
I have found that people's memories

904
00:56:24,680 --> 00:56:28,879
a very sure Joe they make the same
typable

905
00:56:28,880 --> 00:56:34,570
leverage commitments where they don't
look at the downside risk boom

906
00:56:34,570 --> 00:56:38,630
you have a lot of cheap credit in the
nineteen twenties now we've had cheap

907
00:56:38,630 --> 00:56:39,430
credit %uh

908
00:56:39,430 --> 00:56:43,980
and people speculated the houses and now
the housing bubble has collapsed

909
00:56:43,980 --> 00:56:47,640
you had a heavily leveraged American
consumer he's in debt

910
00:56:47,640 --> 00:56:52,900
up to his eyeballs and can sustain that
debt the subprime mortgage crisis is a

911
00:56:52,900 --> 00:56:53,750
symptom of that

912
00:56:53,750 --> 00:56:58,990
could in the eighties and nineties
sheets in the free market had revived

913
00:56:58,990 --> 00:57:03,750
and as optimism returned many of the
financial regulations which roosevelt

914
00:57:03,750 --> 00:57:04,920
introduced

915
00:57:04,920 --> 00:57:08,650
with felt to be outdated and was slowly
dismantled

916
00:57:08,650 --> 00:57:12,200
I yet again a lightly regulated market

917
00:57:12,200 --> 00:57:17,60
a load speculation to grow on change it

918
00:57:17,60 --> 00:57:21,859
we are now reaping the whirlwind on that
deregulation in that sense were exactly

919
00:57:21,859 --> 00:57:23,630
the same position is people who are

920
00:57:23,630 --> 00:57:27,350
in 1929 when the government turned a
blind eye

921
00:57:27,350 --> 00:57:31,600
to what was going on in the financial
the what I do hope but I

922
00:57:31,600 --> 00:57:35,390
do think is that the government has
learned its lessons

923
00:57:35,390 --> 00:57:39,420
and is trying to take steps that are
much more active and much more

924
00:57:39,420 --> 00:57:40,320
aggressive

925
00:57:40,320 --> 00:57:44,220
then what was taken and in the 30s to
try and stem

926
00:57:44,220 --> 00:57:48,319
the pain and stem the decline I'm

927
00:57:48,320 --> 00:57:51,320
the hope is that such steps will work

928
00:57:51,320 --> 00:57:56,320
but the lessons from the crash of 1929
our that history repeats itself

929
00:57:56,320 --> 00:58:01,980
the human folly and greed a much
stronger forces in financial affairs

930
00:58:01,980 --> 00:58:08,980
than reason and restraint thin

931
00:58:13,740 --> 00:58:16,430
a

932
00:58:16,430 --> 00:58:20,40
theme

933
00:58:20,40 --> 00:58:25,840
pill

934
00:58:25,840 --> 00:58:30,520
getting

935
00:58:30,520 --> 00:58:35,9
prove it