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

It was a time when the stock market epitomized the false promise of permanent prosperity.

(Narrator) The tremendous crowds that you see gathered outside the

Stock Exchange are due to the greatest crash in the history of the New York Stock Exchange in market prices.

(Crowd noise)

(Crowd noise)

(Narrator) December 31st, New Year's Eve,

the crash and it's terrible consequences were 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".

1929, all the hope and promise and illusion of the '20s converged in that one year.

(music)

(Man) The United States is afflicted with new Eras.

Let us not think for a moment that the illusion, the aberration of the 1920s was unique,

it is intimately a part of the American character.

(music "Blue Skies")

(Craig Mitchell) The mood of the era I think can best be remembered by the hit song,

was that 1929 - "Blue Skies"?

(Woman) The '20s, yes. 28-29.

(Together) "Blue Skies smiling at me, nothing but blue skies do I see."

(Woman) "Never saw the sun shining so bright, never saw things going so right.

Grey days, all of them gone. Nothing but blue skies from now on."

(Music continues)

(Woman) That was the whole tanner of the day, I mean people

believed that everything was going to be great always. Always. There was a feeling of

optimism in the air that you cannot even describe today.

(Craig Mitchell) And everybody seemed to have an interest in the stock market, certainly the boot black, the taylor,

the grocer, owned shares of one kind or another.

(Narrator) 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 NY 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 8 straight years, stock values had been rising.

By 1929, there seemed to be no upper limits in this world of paper, numbers and dreams.

(Michael Nesbitt) It was an arena of unbounded opportunity.

Where somebody like my grandfather can come into it and make a fortune.

So many people made so much money in the market that late in the 20s it seemed that

you just couldn't go wrong by buying stocks in American companies.

(Narrator) 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 Meehan, 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.

(Woman) I can hardly believe that a family lived in this kind of a house.

I mean today it would be almost unbelievable. Six stories, and these great big rooms.

Enormous. We counted it up the other day and we had 16 live-in help in this house.

(Woman) Not counting chauffeurs and others.

(Man) Not counting chauffeurs. Aside from all the help we had in the Tuxedo Park house

and the South Hampton house as well. But those days are gone forever.

But we never thought of it as being grandiose, because

practically everybody we knew seemed to live in the same way.

(Patricia Livermore) 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 off Central Park.

They had a floor at 813 5th Ave because Dorthea did not like to go to the one on the West Side to change her clothes.

So they had a house in Greatneck, they had a summer house in Lake Placid,

they had a house in Palm Beach, they had private railroad car, 2 yachts.

Oh, they lived. They really lived.

(Narrator) 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 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 in sight of the day when poverty will be banished from this nation."

(Robert Sobel) There was great hope. American came out of WWI with the economy in tact,

we were the only strong country in the world, the dollar was King,

we had a very popular President in the middle of the decade, Calvin Coolidge,

and an even more popular one elected in 1928, Herbert Hoover, so things looked pretty good.

(Music)

(Narrator) The economy was changing in this new America, it was the dawn of the consumer revolution.

New inventions, mass marketing, factories turning out amazing products like radios, rayon,

air conditioners, under arm deodorant.

(Man) This is a period in which the American household gets the washing machine,

gets a refrigerator, goes off of gas light and gets electricity in some cities.

This is a period where people would buy little plugs to put into the outlets in the walls so the

electricity wouldn't leak onto the floor.

"What will they think of next?" was a 1920s saying.

New things were continually coming out.

And they were new things which you could enjoy. Not just the few.

(Narrator) One of the most wondrous inventions of the age was consumer credit.

Before 1920, the average worker couldn't borrow money.

By 1929, "buy now, pay later" had become a way of life.

So there were changes, many changes in the way people viewed the world and all of them optimistic.

You extrapolate the curve and what do you have? Permanent prosperity.

That the term one heard in the late 1920s, we entered an age of permanent prosperity.

(Narrator) 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 business men.

Men like William C. Durant.

(Aristo) It's almost impossible to realize the power and the significance of the men.

In Flint, when Mr. Durant came to Flint occasionally, people used to say "Durant is in town".

Just like that, "Durant is in town". He was bigger than life.

(Narrator) Earlier in the century, Durant had founded General Motors, now he made his

money on Wall Street. Backed by midwestern auto industrialists, he controlled so much

money that he could single handedly drive up the price of a stock and then sell, reaping huge profits.

(Aristo) He was just at the point at the maximum of his power.

He managed, according to the voices of the time according to what was said,

anywhere between 2 and 5 billion dollars. Which in those days was fabulous.

The market was filled with bulls and he was the bull of the bulls.