The Illusions of Prosperity

The Crash of 1929 & The Great Depression (PBS) 1of6

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Summary

The 1929 stock market crash marked the beginning of the Great Depression. Prior to the crash, the United States experienced an era of optimism and economic growth, with many Americans investing in the stock market for the first time. Financial leaders believed that prosperity would continue indefinitely, dubbing the period the "New Era." The decade saw consumer innovations and the rise of consumer credit, which facilitated an illusion of permanent prosperity. Wealth among a few financial titans on Wall Street, such as Jesse Livermore and William Durant, epitomized unchecked speculation. Despite outward displays of wealth, the economic bubble was on the brink of bursting, leading to one of the greatest financial disasters in history.

Highlights

Crowds gathered at the stock exchange during the 1929 crash, a sign of widespread panic. 😱
The 1920s was seen as a time of endless prosperity, reinforced by popular songs of optimism. 🎶
Jesse Livermore and other speculators lived extravagantly, symbolizing economic excess. 🏰
Consumer credit became mainstream, allowing people to buy now and pay later. 💸
The aura of unending prosperity was shattered by the onset of the Great Depression. 🌪️

Key Takeaways

The 1929 crash was the biggest in history, sparking the Great Depression. 📉
Financial leaders were overly optimistic, coining the term 'New Era.' ✨
Stock market participation grew rapidly among everyday Americans. 📈
The 1920s saw significant consumerism and technological advances. 🛍️
Wall Street's power was concentrated among a few wealthy figureheads. 💼

Overview

Ah, the roaring 1920s—a time when everything seemed possible and prosperity was the word of the hour. The decade was filled with jazzy optimism, innovation, and economic growth. Many Americans, from your local grocer to your neighborhood tailor, invested in the stock market for the first time. Life was a cabaret, until the band stopped playing.

The Great Depression's genesis was the infamous stock market crash of 1929. Back then, Wall Street was dominated by a small group of financial titans who were as notorious as they were wealthy. These moguls were hailed as celebrities and lived lives as grand as their egos. As the 1920s came to a close, economic speculation hit fever pitch, but unbeknownst to many, the bubble was about to burst.

As the nation danced to the tunes of ‘Blue Skies,’ a façade of permanent prosperity clouded the reality of mounting economic peril. By the time Herbert Hoover promised a banishment of poverty, the economic foundations of the 'New Era' were already crumbling. When consumer credit became a way of life, the seeds of the impending financial chaos were inadvertently sown. Everyone thought they could live like Livermore, but soon, the party would be over.

Chapters

00:00 - 00:30: Introduction to the Crash of 1929 The chapter titled 'Introduction to the Crash of 1929' begins by describing the unprecedented gathering of crowds outside the stock exchange. This congregation is attributed to the most significant market crash ever recorded, marking a pivotal moment in financial history.
00:30 - 02:00: The Illusion of the 1920s The chapter titled 'The Illusion of the 1920s' details the anticipation and naivete at the end of the 1920s, specifically on New Year's Eve in December 1929. It highlights the prevailing optimism and sense of a perpetual prosperity among financial leaders, reflecting the sentiment of a decade known for economic growth and exuberance. The 'new era' was celebrated with hope, unaware that this period of stability was soon to end with a looming financial crash. The chapter captures the historical context and the misconceptions of that time period.
02:00 - 03:30: Widespread Optimism and Stock Market Participation The chapter discusses the pervasive optimism that characterized the 1920s, highlighting how this attitude contributed to increased participation in the stock market. It emphasizes that the so-called illusion or aberration of the era wasn't unique to the time, suggesting that similar phenomena have occurred in different eras of American history. The focus is on understanding the social and economic dynamics that lead to such periods of widespread optimism and their impact on financial markets.
03:30 - 05:30: The Rise of Stock Market Celebrities This chapter delves into the emergence of celebrities within the stock market world, reflecting on how the stock market boom of the 1920s was deeply intertwined with American culture. The mood of the era is encapsulated by the popular song 'Blue Skies,' which symbolizes the optimism and unchecked enthusiasm of the time as people eulogized the era of prosperity with lyrics suggesting an unending spell of positivity and success.
05:30 - 06:30: Herbert Hoover's Presidential Campaign The chapter describes the optimistic atmosphere during Herbert Hoover's presidential campaign, emphasizing the public's belief in a prosperous future and the sentiment that challenges were a thing of the past.
06:30 - 09:30: Economic and Technological Changes in the 1920s In the 1920s, there was a prevailing excitement that permeated society, characterized by the widespread interest in the stock market among ordinary Americans. This era marked a significant shift as many individuals, including diverse groups such as tailors, grocers, and other everyday citizens, began investing in stocks for the first time. The stock market represented a newfound opportunity for people to own shares in various companies, fostering a spirit of optimism and economic change during this period.
09:30 - 11:30: The Power of Wall Street Titans The chapter titled 'The Power of Wall Street Titans' portrays the New York Stock Exchange as a dynamic market where stock values fluctuate based on demand. It explains that for nearly eight years leading up to 1929, stock values consistently rose, creating an environment with seemingly limitless potential. This era was characterized by paper-driven wealth and aspiration.

The Crash of 1929 & The Great Depression (PBS) 1of6 Transcription

00:00 - 00:30 the tremendous crows which you see gathered outside the stock exchange are due to the greatest crash in the history of new and Market 1
00:30 - 01:00 December 31st New Year's Eve the crash and its terrible consequences was still in the future Financial leaders everyone celebrated what had been a decade of prosperity and boundless optimism they thought the party would last forever they called it the new era 19 29 all the hope and promise and
01:00 - 01:30 illusion of the 20s converged in that one year the United States is Afflicted with new eras let us not think for a moment that the uh illusion the aberration of the 1920s was unique
01:30 - 02:00 it is intimately a part of the American character the mood of the era I think can best be remembered by the hit song was that 1929 blue skies in the 20s yes blue skies me nothing but blue skies do I see yes never saw the sun shining so bright
02:00 - 02:30 never saw things going so right gray days all of them gone nothing but blue skies from that was the whole uh tenor of the day I mean people believed that everything was going to be great always always there was a feeling of optimism
02:30 - 03:00 in the air that you cannot even describe today and everybody seemed to uh have uh an interest in the stock market certainly the uh boot black uh the tailor the grosser uh own shares of one kind or another this was the first time that many ordinary Americans had begun to invest in stocks a stock a share of a company is bought and sold here on the floor of the
03:00 - 03:30 New York Stock Exchange the stocks themselves have no fixed value as in an auction if the stock is in demand its price goes up no demand and the price goes down for almost eight straight years stock values had been rising by 1929 there seemed to be no upper limits in this world of paper numbers and dreams it was an AR of unbounded
03:30 - 04:00 opportunity where somebody like my grandfather could come into it and make a fortune so many people made so much money in the the market that late in the 20s it it seemed that uh you just couldn't go wrong buying stocks in American companies here was a whole new way to make a fortune unlike the carnegies and the Rockefellers of previous decades who built steel mills and dug oil wells men like Michael mean
04:00 - 04:30 Jesse Livermore and Charles Mitchell had amassed their fortunes buying and selling stocks pieces of paper the public was fascinated Bankers Brokers and speculators had become celebrities and they lived like royalty I can hardly believe that a family lived in this kind of a house I mean today it would be almost unbelievable six stories
04:30 - 05:00 and these great big rooms enormous we counted it up the other day we had uh 16 living help in this house counting the chauffeurs and other not counting the chauffeurs yeah aside from all the help we had in The Tuxedo Park house and the Southampton house as well but those days are gone forever I should say but we never thought of it as being grandiose because practically everybody we knew seemed to live in the
05:00 - 05:30 same way Jesse Livermore had a ticker tape in every home that he owned they had a beautiful house on 76th Street in Manhattan on the west side of Central Park they had a floor at 813 fth Avenue because Daria did not like to go to the West Side to change her clothes so they had a house in Great
05:30 - 06:00 Neck they had a summer house in Lake plid they had house in Palm Beach they had private railroad car uh two Yachts oh they lived they really lived few Americans lived Like Jesse Livermore but there was a rising expectation that everyone could have a piece of this Prosperity during his presidential campaign of
06:00 - 06:30 1928 candidate Herbert Hoover would make this extraordinary promise given a chance to go forward with the policies of the last 8 years we shall soon with the help of God be inside of the day when poverty will be banished from this nation there was great hope America came out of World War I with a the economy intact with the only strong country in the world the dollar was King we had a
06:30 - 07:00 very popular pres in the middle of the decade Calvin kulage and an even more popular one elected 1928 Herbert Hoover so uh things looked pretty good the economy was changing in this new America it was the dawn of the consumer Revolution new inventions Mass Market marketing factories turning out
07:00 - 07:30 amazing products like radios Ron air conditioners underarm deodorant this is a period in which the American household gets the washing machine gets a refrigerator goes off gas light and gets electricity in some cities this is a period in which people would buy little plugs to put into the uh outlets in the wall so the electricity wouldn't leak on the
07:30 - 08:00 floor what will they think of next was a 1920 saying this new things continually coming out and there were new things which you could enjoy not just for the few one of the most wondrous inventions of the age was Consumer Credit before 1920 the average worker couldn't borrow money by 1929 byy now pay later had become a way of life
08:00 - 08:30 so uh there were changes many changes in the way people view the world and all of them optimistic you extrapolate the curve and what do you have permanent Prosperity that was a ter term one heard in the late 1920s we entered an age of permanent Prosperity Wall Street got the credit for this prosperity and Wall Street was dominated by just a small group of wealthy men rarely in the history of this nation had so much raw power been concentrated in the hands of a few
08:30 - 09:00 businessmen men like William C Durant it's almost impossible to realize the power and the significance of the man uh in Flint when Mr Durant came to flet occasionally people used to say Durant is in town just like that Durant is in town he will bigger than life earlier in the century Durant had founded General Motors now he made his money on Wall
09:00 - 09:30 Street backed by Midwestern Auto industrialists he controls so much money that he could singlehandedly drive up the price of a stock and then sell reaping huge profits he was just at the apotosis at the maximum of his power he managed according to the voices of the time according to what was said anywhere between two to5 billion dollar which in those days were
09:30 - 10:00 fabulous the market was filled with bulls and he was the Bull of the Bulls Durant came to Wall Street as one of the titans of Industry Jesse Livermore whose Fortune was estimated at over $100 million never did anything in his life but play the market everything Jesse limore touch turned to Gold it same all he had to do is to press a button and the stock would go up 10 points and uh that meant of course that Jess liore make a lot of
10:00 - 10:30 money so uh the average American would look at this and say gee if if only I knew what he was doing I could make money too how do you get in on Jesse livermore's brains Livermore was a Speculator pure and simple he didn't study the health of a company he didn't care whether it made a profit or paid a dividend for him