VIKING

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CONTENTS

Dedication

Epigraph

Author’s Note

The Cast of Characters and the Companies They Kept

Prologue

Part I

Chapter One: February 1, 1929

Chapter Two: February 14, 1929

Chapter Three: February 16, 1929

Chapter Four: March 4, 1929

Chapter Five: March 5, 1929

Chapter Six: March 26, 1929

Chapter Seven: March 29, 1929

Chapter Eight: April 5, 1929

Chapter Nine: April 8, 1929

Chapter Ten: April 12, 1929

Chapter Eleven: April 14, 1929

Chapter Twelve: May 7, 1929

Chapter Thirteen: June 4, 1929

Chapter Fourteen: June 29, 1929

Chapter Fifteen: September 2, 1929

Chapter Sixteen: October 2, 1929

Chapter Seventeen: October 6, 1929

Chapter Eighteen: October 10, 1929

Chapter Nineteen: October 24, 1929

Chapter Twenty: October 27, 1929

Chapter Twenty-One: November 6, 1929

Chapter Twenty-Two: November 8, 1929

Chapter Twenty-Three: November 13, 1929

Chapter Twenty-Four: December 19, 1929

Chapter Twenty-Five: December 21, 1929

Part II

Chapter Twenty-Six: September 30, 1930

Chapter Twenty-Seven: October 28, 1930

Chapter Twenty-Eight: November 5, 1930

Chapter Twenty-Nine: February 2, 1931

Chapter Thirty: February 18, 1932

Chapter Thirty-One: November 8, 1932

Chapter Thirty-Two: February 18, 1933

Chapter Thirty-Three: February 21, 1933

Chapter Thirty-Four: February 22, 1933

Chapter Thirty-Five: March 3, 1933

Chapter Thirty-Six: March 7, 1933

Chapter Thirty-Seven: March 21, 1933

Chapter Thirty-Eight: May 16, 1933

Chapter Thirty-Nine: May 22, 1933

Chapter Forty: May 23, 1933

Chapter Forty-One: June 16, 1933

Chapter Forty-Two: June 21, 1933

Epilogue

Afterword

Photographs

Acknowledgments

Notes and Sources

Notes

Bibliography

Image Credits

Index

About the Author

_153463419_

For my children,

Henry, Max, and Sydney.

Love you always.

The ordinary human being does not live long enough to draw any substantial benefit from his own experience. And no one, it seems, can benefit by the experiences of others. Being both a father and teacher, I know we can teach our children nothing…Each must learn its lesson anew.

—ALBERT EINSTEIN, OCTOBER 26, 1929

AUTHOR’S NOTE

Many people know 1929 as the year of the stock market crash—the event that triggered the Great Depression and scarred a generation.

But what led to it, and what followed, is a far more intricate, complex drama—one that is misunderstood or unknown. At its core, it is a deeply human story.

After writing Too Big to Fail, about the financial crisis of 2008, I wanted to explore the most infamous crash in history with the same level of depth, granular detail, and human emotion—not just to tell the story but to better understand what we might learn from it.

The narrative that follows is the product of more than eight years of reporting and thousands of hours of research: an account built on private letters, diaries, memos, notes, oral histories, court records, board transcripts, depositions, and lawsuits—some of which had never been published or closely examined.

In one instance, I was granted access, for the very first time, to the confidential board minutes of the Federal Reserve Bank of New York during the most pivotal months of 1929. In another, I was able to secure a revealing, unpublished memoir of a Wall Street insider who lived through it all.

Each scene in this book was assembled from fragments: an offhand remark in a four-hundred-page transcript, a forgotten oral history, a clipped line in a newspaper, a floor plan showing how far someone had to walk to deliver a message. Detail by detail, layer by layer, the picture came into focus.

By understanding the motivations and disparate stories of the central actors, we can begin to understand how this calamity happened. Which is why this is not a story about those who endured the fallout—it’s about those who helped set it in motion, because that’s where the responsibility lies, and where the lessons remain.

What emerged from this work changed how I understood this period in history. Much of what I uncovered challenged my assumptions—and may challenge yours. And if the characters, issues, and policy choices from that time appear to echo our present moment a little too clearly, that’s because they do.

The arc of the story of 1929 may feel like the response to Ernest Hemingway’s famous line: “How did you go bankrupt?”

“Two ways,” Hemingway’s character replies. “Gradually, then suddenly.”

That’s how confidence—the lifeblood of our economy—disappears: gradually, and then suddenly.

While I was fortunate to uncover previously unseen documents during my research, this book would not exist without the enduring scholarship of others. Because this is written as a narrative, most citations appear in the endnotes, along with commentary that expands or contextualizes particular details.

I’m indebted to the many researchers, archivists, economists, and historians who devoted their lives to studying this period; to the journalists who wrote contemporaneously in the newspapers and magazines of the time; and to authors like John Kenneth Galbraith, whose The Great Crash 1929 remains canonical; John Brooks, whose Once in Golconda is a classic; and Gordon Thomas and Max Morgan-Witts, who wrote the riveting The Day the Bubble Burst. There are many more who are credited at the end of this volume.

In 1920, H. G. Wells, the futurist, already anxious about the direction of the modern world, wrote: “Human history becomes more and more a race between education and catastrophe.”

I didn’t write this narrative to declare a winner in that race. But I hope that by piecing together the story of 1929, I’ve made the path a little clearer—and the stakes a little harder to ignore.

THE CAST OF CHARACTERS AND THE COMPANIES THEY KEPT

FINANCIAL INSTITUTIONS

THE HOUSE OF MORGAN

John Pierpont Morgan Sr., founder

J. P. “Jack” Morgan Jr., partner, son of John Pierpont Morgan

Thomas William Lamont, partner

Thomas Stilwell Lamont, partner, son of Thomas William Lamont

George Whitney, partner

Henry Davison, partner

Dwight Morrow, former partner, ambassador to Mexico

Russell Cornell Leffingwell, partner

Frank Bartow, partner

Parker Gilbert, partner and associate

Martin Egan, publicist

NATIONAL CITY COMPANY AND NATIONAL CITY BANK

Charles Edwin Mitchell, chairman and CEO

Hugh Baker, head of National City’s stock-trading unit

Gordon Rentschler, bank president

COUNTY TRUST COMPANY

James Riordan, founder and president

CHASE NATIONAL BANK

Albert H. Wiggin, chairman and CEO

FIRST NATIONAL BANK OF NEW YORK

George F. Baker Sr., chairman

George F. Baker Jr., vice chairman

BANKERS TRUST

Seward Prosser, chairman

IRVING TRUST

Lewis Pierson, chairman

REICHSBANK

Dr. Hjalmar Schacht, president

BUSINESS LEADERS

Colonel Sosthenes Behn, founder and chairman of International Telephone and Telegraph

Louis-Joseph Chevrolet, co-founder of Chevrolet Motor Company

Walter Percy Chrysler, founder of Chrysler Corporation

Pierre Samuel du Pont, board member of DuPont and General Motors

T. Coleman du Pont, president of E. I. du Pont de Nemours and Company, two-term U.S. senator from Delaware

Henry Ford, founder of Ford Motor Company

William Fox, founder of Fox Film Corporation

John Jakob Raskob, executive at DuPont and General Motors and chairman of the Democratic National Committee (1928–1932)

Colonel William P. Rend, president of the W. P. Rend Coal Company

David Sarnoff, founding general manager of Radio Corporation of America (RCA)

Charles M. Schwab, president of Bethlehem Steel

Alfred Sloan, president of General Motors

Owen D. Young, president and chairman of General Electric, co-founder of Radio Corporation of America (RCA)

THE NEW YORK STOCK EXCHANGE

E. H. H. Simmons, president (1924–1930)

Richard Whitney, vice president, broker for J.P. Morgan & Co.

William Crawford, superintendent

Michael Meehan, RCA or “Radio” specialist and pool operator

General Oliver Bridgeman, U.S. Steel specialist

Ben Smith, pool operator

Tom Bragg, pool operator

Michael Levine, overseer of Wall Street’s army of messenger boys

STOCKBROKERS

Charles Merrill, Merrill Lynch co-founder

William Van Antwerp, partner at E. F. Hutton and Co.

THE SPECULATORS

Evangeline Adams, astrologist known as the “stock market’s seer”

Bernard Baruch

Pat Bologna, Wall Street bootblack with a reputation as a tipster

Arthur Cutten

William Crapo Durant

Clarence Hatry, British financier

Joseph Kennedy

Jesse Livermore

Groucho Marx, actor

Oris and Mantis Van Sweringen

NEW YORK

Jimmy Walker, mayor of New York City (1926–1932)

Fiorello La Guardia, mayor of New York City (1934–1946)

Al Smith, governor of New York (1919–1920, 1923–1928), Democratic candidate for president in 1928

UNITED KINGDOM

Winston Churchill, British member of Parliament, former chancellor of the exchequer, future prime minister (1940–1945, 1951–1955)

Randolph Churchill, son of Winston Churchill

Ramsay MacDonald, British Labour Party leader, foreign secretary, prime minister (1924, 1929–1935)

U.S. GOVERNMENT

William Howard Taft, chief justice of the U.S. Supreme Court (1921–1930), U.S. president (1909–1913)

Warren G. Harding, U.S. president (1921–1923)

Calvin Coolidge, U.S. president (1923–1929)

Herbert Clark Hoover, U.S. president (1929–1933)

Franklin Delano Roosevelt, governor of New York (1929–1933), U.S. president (1933–1945)

Andrew William Mellon, American banker and businessman, treasury secretary (1921–1932)

William Woodin, industrialist, treasury secretary (1933)

Senator Carter Glass, Democrat from Virginia, co-founder of the Federal Reserve Act of 1913, co-sponsor of the Glass–Steagall Act of 1932

Senator Hiram Johnson, Republican from California

Senator Huey Long, nicknamed “the Kingfish,” Democrat from Louisiana

Senator Kenneth McKellar, Democrat from Tennessee

Senator George Moses, Republican from New Hampshire

Senator George Norris, Republican from Nebraska

Senator Robert L. Owen, Democrat from Oklahoma, co-sponsor with Carter Glass of the Federal Reserve Act

Senator Arthur Robinson, Republican from Indiana

Senator Reed Owen Smoot, Republican from Utah, co-sponsor of the 1930 Smoot–Hawley Tariff Act

Representative Henry B. Steagall, Democrat from Alabama, co-sponsor of the Glass–Steagall Act of 1932

Learned Hand, federal judge on the U.S. Court of Appeals for the Second Circuit

Harold R. Medina, federal judge on the U.S. District Court for the Southern District of New York

THE FEDERAL RESERVE

Marriner S. Eccles, chairman of the Federal Reserve Board (1934–1948)

George L. Harrison, governor and then president of the Federal Reserve Bank of New York (1928–1940)

Adolph C. Miller, member of the Federal Reserve Board (1914–1936)

Benjamin Strong Jr., governor of the Federal Reserve Bank of New York (1914–1928)

Charles Sumner Hamlin, first chairman of the Federal Reserve Board (1914–1916), remained a member of the board until 1936

Paul M. Warburg, head of the International Acceptance Bank, involved in creating the Federal Reserve, on the first Washington board of governors

THE INVESTIGATORS

William O. Douglas, chairman of the Securities and Exchange Commission (SEC), future associate justice of the U.S. Supreme Court

Ferdinand Pecora, New York prosecutor known as the “Hellhound of Wall Street” for leading an investigation of the city’s bankers in the wake of the 1929 crash

Arsène P. Pujo, Louisiana congressman and head of Committee on Banking and Currency, chaired the “Pujo Committee” investigation into the financial industry in 1912

THE ECONOMISTS

Roger Babson, statistician and economist who predicted the crash

Irving Fisher, Yale professor, one of the nation’s leading economists

John Kenneth Galbraith, Harvard professor of economics

John Maynard Keynes, British economist

Joseph Stagg Lawrence, Princeton economist

Royal Meeker, pro–stock market economist

THE JOURNALISTS

Claud Cockburn, British writer for The Times of London

Samuel Crowther, author of “Everybody Ought to Be Rich” for Ladies’ Home Journal

William Floyd, author of People vs. Wall Street

Major Robert H. Glass, newspaperman, father of Carter Glass

William Randolph Hearst, publisher of Hearst Newspapers

Matthew Josephson, writer who had worked in the financial industry

Edwin Lefèvre, author of Reminiscences of a Stock Operator

Walter Lippmann, writer, reporter, and political commentator

Charley Michelson, Hearst newspaper writer turned Democratic publicist

Alexander D. Noyes, financial editor of The New York Times

Drew Pearson, syndicated columnist of Washington Merry-Go-Round

PROLOGUE

Charles Mitchell strode up the steps of 55 Wall Street, determined to project his usual sense of confidence and certitude. It had been a crushing afternoon. As he returned to his office, he knew that the eyes of Wall Street were on him—everyone from the traders in the street to his own secretary was assessing his gait and searching his face, trying to read meaning into every twitch, every line, every wrinkle.

In his gray three-piece suit, shoulders back, Mitchell kept up his smile as he passed through the glass-domed central hall of his National City Bank. With its eighty-three-foot ceiling and two solid bronze doors protecting a safe weighing some three hundred tons, the bank was the largest in the country.

It was just past 5:30 p.m. on Monday, October 28, 1929. Hours earlier, the stock market had closed with a sharp, dizzying drop of 13 percent after a week of downward convulsions; today was by far the greatest fall. The darkening downtown streets still teemed with anxious brokers in their fedoras and flat caps, messenger boys and switchboard girls, all gossiping and speculating about the collapse. What caused the fall? How much further might it go tomorrow? Would the markets even open?

As Mitchell made his way to his office, the teller windows he passed reflected the weary puffiness under his eyes and his disheveled, graying eyebrows. He collapsed into the chair behind his mahogany desk. The room was furnished with the high formality befitting an eighteenth-century statesman: antique wood chairs, a grandfather clock that stood against the cream-white woodwork flanked by portraits of George Washington orchestrating the newly independent nation with the purpose and resolve that Mitchell sought to emulate in his own life.

The athletic fifty-two-year-old bank chairman—an unusually optimistic man whom the press called “Sunshine Charlie”—had spent the afternoon in emergency meetings at the Federal Reserve Bank of New York, puzzling over how to calm the market. It was a moment for which a self-consciously Great Man like Mitchell should have been utterly prepared. He had the experience, the stature, and the steely nerves necessary to steer Wall Street through these tough times.

Yet he felt exposed, vulnerable.

But he didn’t have time to consider his emotional state.

He walked upstairs to confer with Hugh Baker, who ran National City’s stock-trading unit.

Baker, a tall, bald man with piercing eyes, began to explain to Mitchell, calmly, if somewhat obliquely, what had taken place while Mitchell had been at the Federal Reserve.

“Our portfolio today has been tremendously increased in our holdings of National City Bank stock,” Baker told him.

Mitchell stared at him, waiting to hear exactly what he meant.

Baker finally blurted out: “We purchased seventy-odd thousand shares.”

Mitchell, who could calculate numbers instantly in his head, immediately grasped the nature and scale of the problem. That is unbelievable, he thought. The bank didn’t have the cash to pay for so many shares. He was outraged—and terrified. Everything he had built was suddenly at grave risk of collapse.

Barely a month earlier, Mitchell had been on top of the world. He had finalized an agreement to take over the Corn Exchange Bank, a bold acquisition that would turn National City from the largest bank in the country into the largest in the world, stealing the mantle from London and helping New York finally eclipse its rival city as the world financial center. This was history in the making, an overthrow of the established order, the kind of gambit that made Mitchell a king among men.

But to pull off the deal, Mitchell had made a big—and risky—bet on the strength of his own stock. Corn Exchange shareholders could take $360 in cash for each of their shares, or four fifths of a share in National City Bank. On paper, the stock was the better deal: As long as National City stock stayed above $450, four fifths of a share was worth more than $360 in cash. At the time the deal was struck, it was comfortably higher, trading at $496 a share. Mitchell needed it to stay there until the deal could be completed, likely in the next month—because, in truth, National City didn’t have the cash to pay everyone, a crucial detail he kept to himself. So he quietly instructed his traders to buy the bank’s shares whenever the price slipped.

In a relatively stable market, this posed no problem. Big publicly traded companies bought back their own shares all the time. In a rapidly falling market, however, doing so could quickly become like shoveling money into a furnace, which was what had been happening that afternoon. In the chaos of all that selling pressure, National City’s bids had been accepted so quickly that they lost track of how many they had amassed. By the time traders got a handle on the situation, National City had committed to buy seventy-one thousand of its own shares, far more than it could afford to hold.

“With that news,” he told Baker, “I could be knocked over with a feather.”

There were very few good options. To fund their daily operations, big banks like National City had to constantly borrow against their assets. But banking law prevented them from offering their own stock as collateral. Thus, those seventy-one thousand shares—which cost about $32 million—were a deadweight that could possibly take down the whole bank.

“It would be embarrassing for us to attempt to borrow on that stock in other banks,” Mitchell said, knowing full well that his rivals would seize on any such move as a sign of vulnerability. With the market in free fall, short sellers—traders who bet that stocks would go down—were lining up targets, probing for weakness.

The stock market was at the breaking point. Sales volume had overwhelmed the human apparatus of the trading floor to such an extent that, on the previous Thursday, the ticker had fallen four hours behind in reporting stock prices, more than twice the longest previous delay.

What this meant was that the big board of prices that loomed over the floor of the New York Stock Exchange was hopelessly inaccurate. Trading stocks in this environment was like being a gambler at a baseball game in the eighth inning and looking at a scoreboard that hadn’t been updated since the third, while everybody around you was shouting conflicting opinions about which team was ahead and by how much. The prices of stocks sold privately—known as “off-exchange,” which was the case with National City shares—were even further behind because they were tied to the broader market’s movements without being fully updated in real time, exacerbating the delay. For Wall Street traders, the only prudent decision was to sell and get the hell out of the market. Which is exactly what they were doing.

Mitchell knew that if he tried to unload even a small fraction of National City’s position back into such a weak market, rumors would begin to fly about the bank’s solvency, and that could easily turn into a vicious cycle that would be impossible to stop. If prices declined fast enough, it could trigger a much larger crisis: A “lack of confidence might bring a run,” Mitchell told Baker, envisioning depositors lining up outside every one of its fifty-eight branches around the country.

A run on the country’s largest bank. There was nothing bankers feared more.

National City was not just any bank—the forerunner to Citigroup, it was responsible for originating a quarter of all loans to American corporations in the 1920s. This would be an epic collapse, a bigger bank run than the world had ever seen.

Mitchell was all too familiar with the chaos that bank runs could unleash. During the Panic of 1907 he had been a young assistant at the Trust Company of America, a robust institution brought to its knees by rumors that falsely linked it to an unsuccessful effort to corner the copper market. The moment confidence vanished, fear took over. Mitchell had worked behind the cages with the tellers to hand over cash to frightened customers who ran home and hid it in their cupboards and under their beds. The bank had come within days of collapsing. The current situation Mitchell faced would be a thousand times worse, with an impact extending well beyond National City.

Despite his wrenching experience at the Trust Company, he had never imagined National City would find itself in so precarious a position. The financial industry had evolved. He’d built the place from the ground up to be a fortress that could withstand any siege. There was no way it could be taken down.

And yet here he was, alone at the top, with no game plan, no course of action, no obvious next move.

After their conversation, Mitchell and Baker collected Gordon Rentschler, the bank’s president, and the three men piled into the back of Mitchell’s black Rolls-Royce. They were driven through the choked, noxious streets of Manhattan up to their homes on the Upper East Side, relieved to be away from the prying eyes of the crowds that had descended on Wall Street to watch the carnage. While their employees ate sandwiches for dinner at their desks, tallying trade confirmation slips and double-checking the accounting ledger into the night—with some sleeping on the floors of their offices given the sheer volume of work that needed to be completed before the morning—the brain trust of National City headed for the refuge of their luxurious dwellings along the eastern edge of Central Park.

In the car, they reviewed the events of the day and the outlook for Tuesday. None of the three men were under any illusion that the market was likely to rebound. The question was how to keep National City out of the line of fire. Mitchell himself was certain that if dramatic steps weren’t taken “there would be a perpendicular drop in the stock.” Mitchell relied heavily on the judgment of Baker and Rentschler, who, like him, were highly optimistic by nature. He never made a major decision without seeking their advice. But in the hour the trip took them, neither of them had a solution to offer. All they could agree upon was the severity of the problem.

When Mitchell arrived at his Fifth Avenue mansion at 74th Street—a five-story residence modeled after an Italian Renaissance palazzo—his butler, one of more than a dozen household employees, was waiting at the door as he did every evening. Mitchell passed through the resplendent foyer, with its coatrooms on either side and fountain at the back, and made his way up the sweeping circular stairwell, past the second floor, where a grand living room faced Central Park, and on to his library on the third floor, a place where he often took meetings and where, more than anywhere else, he liked to be alone and think.

This evening, however, he had to rush to freshen up before heading to the home of another titan of finance, Bernard Baruch, for a formal dinner attended by a who’s who of banking and industry giants in honor of an English politician by the name of Winston Churchill.

Mitchell was not generally a man to cancel plans, and tonight it was out of the question. Everything now had to be done with careful consideration of what people might say. If he failed to show up, it might spark rumors that something was amiss at National City.

Mitchell woke early the next morning after a sleepless night replaying the prior day’s events, still desperately searching for a solution. He did what he considered his mandatory daily fifteen minutes of calisthenics—a “setting up” drill, he called it—which usually had a soothing effect on him. “No amount of brilliance or personal charm will carry a man to the top and keep him there unless he can come up smiling day after day,” he liked to say about his exercise routine.

As he ate breakfast, Mitchell always scanned the newspapers. Had anything leaked out about National City? Did anyone know about his predicament? “Stock Prices Slump $14,000,000,000 in Nation-Wide Stampede to Unload; Bankers to Support Market Today” was the headline on the New York Times front page, while the Daily News led with “Stock Crash 10 Billion Dollars.” None of that was news to him.

On the second page of the Daily News, however, was a picture of Mitchell’s own face. He used to like seeing himself in the papers, but not so much lately, not since the context had gone from pleasantly positive to decidedly negative: He had become a lightning rod for Washington politicians bashing Wall Street.

The fiercest of Mitchell’s critics was Senator Carter Glass, Democrat from Virginia, who considered the stock market a tax on American prosperity and blamed bankers for heedlessly extending credit to speculators. He had even coined a term for this: “Mitchellism.”

Mitchell and his fellow bankers had already established a clear strategy for dealing with the likes of Senator Glass—they simply ignored him. What happened on Wall Street, in their view, was none of Washington’s business. It was a position that would no longer be tenable after October 1929.

Mitchell left his house and met Rentschler on Fifth Avenue. It was overcast and chilly, and though Mitchell kept two drivers on his payroll, as well as having a fully equipped garage on Ninety-Seventh Street, he often preferred to walk. The two men headed south on foot. At Sixty-Fifth Street and Fifth Avenue, as they waited for the automobile traffic crossing the Central Park transverse, Mitchell dropped an astonishing surprise on his friend.

To protect the bank, Mitchell said he had decided that morning that he would personally borrow $12 million—a figure several times his net worth—and use it to buy National City stock from the bank. “Something must be done,” he said.

Rentschler was dumbstruck. Don’t do it, he pleaded with his friend. Don’t put yourself on the line that way. We’ll figure out something else.

Mitchell’s proposal would put not just his fortune but his family’s future in peril. If the stock kept falling, Mitchell could be wiped out, along with his wife, Elizabeth, and two children, Rita and Craig.

That was one risk. But there was another: If his scheme had any chance of working, it would have to be executed with the utmost secrecy. If rival traders were to discover that the chairman of the largest bank in the United States was personally bailing out his own company, all hell would break loose.

As they continued their walk, Rentschler did everything he could to dissuade Mitchell—without success.

It was now Tuesday, October 29, 1929, a day that economist John Kenneth Galbraith would later describe as “the most devastating day in the history of the New York stock market, and it may have been the most devastating day in the history of markets.”

Nearly a century has passed since the crash of 1929, yet it remains the most significant—and largely misunderstood—financial disaster in modern history. Today’s public may have a vague conception of what took place then, but few have any sense of the individuals who played a role in this drama, what they did to precipitate the crisis, why they failed to see it coming, and what steps they took to try to end it. Nor, more important, do they perceive the remarkable parallels between that era and today’s political and economic climate.

The 1920s, more than any other period in our country’s history, saw the birth of the modern consumer economy that we take for granted today. As millions of Americans left farms and small towns and followed higher paying jobs to metropolitan areas, they created markets for astonishing new conveniences and goods. They bought cars, radios, and dishwashers, products that nobody knew they needed but that made life so much easier and more enjoyable.

But the greatest product, the one that made all the others possible, was credit. Buy now, pay later. It was a kind of magic.

In 1919, General Motors struck a blow against the American taboo of taking personal loans by starting to sell its vehicles on credit. Soon after, Sears, Roebuck & Co. offered “installment plans” for expensive appliances, and later for more everyday items. Taking notice of this cultural shift, banks mechanized the process for smaller merchants. Wall Street went one step further and started offering stock on credit—“on margin,” it was called. By the thousands, middle-class Americans opened margin accounts, putting up 10 or 20 percent of a stock purchase and borrowing the rest. When the market went up, the returns felt like free money.

Americans no longer had to save for the goods they wanted. Borrowing became a habit, born along with optimism. So long as faith in tomorrow was maintained, debts could be rolled over endlessly into the future.

Individuals became spectacularly rich. The wealthiest in the nation amassed fortunes in excess of $100 million, which, in today’s dollars, would be nearly $2 billion. Some of the most senior executives of America’s biggest companies had salaries and bonuses of $2 to $3 million annually, the equivalent of $37 to $56 million today.

And with that wealth came fame. It was, arguably, the first true celebrity age: a mass-produced, media-driven obsession with individuals not just for their talent or achievements but for their sheer visibility. And, increasingly, those in the spotlight were not artists or athletes—but men of wealth. Hollywood stars like Charlie Chaplin, Clara Bow, and Douglas Fairbanks still drew headlines, as did Babe Ruth and Charles Lindbergh. But for the first time, businessmen joined their ranks. In an era that equated fortunes with brilliance, the titans of Wall Street and industry became household names. Magazines like Time, which started in 1923, and Forbes, which began in 1917, turned financiers into cover stars. Their salaries were scrutinized, their pronouncements quoted like scripture. The richest men in America were cast as visionaries, symbols of success in a nation enthralled by it.

What is clear, in hindsight, is the extent to which the heady times of the 1920s disguised a set of underlying imbalances, a massive bifurcation of American society. As technology made farming more efficient and less dependent on physical labor, huge numbers of farmworkers fell into economic distress, along with the towns they lived in, creating a widening gulf between the urban haves and the rural have-nots. Wall Street became like a giant balloon floating above the common people, its self-mythologizing leaders enjoying the comforts of what felt like a privileged realm. Government took little notice, as an extreme form of laissez-faire reigned in Washington. President Calvin Coolidge was proudly committed to slashing taxes and restoring the federal government to its pre–World War I size and capacity. The American people, he believed, could solve their own problems. He was wildly popular.

Business was only too happy to make its own rules. As giant corporations such as U.S. Steel and General Motors achieved market dominance and racked up profits, the wealthy became a class unto themselves, particularly in New York City, home of Wall Street, the greatest wealth-creating engine the world had ever seen. While jazz flourished in Harlem and Dorothy Parker presided over the literary scene at the Algonquin Hotel, the stock market gilded the city and the privileged built temples to their own good fortune that survive to this day. Fifth Avenue, Park Avenue, and Central Park West as we know them are largely products of the 1920s. Manhattan went vertical. The city’s population swelled to almost seven million, driven not simply by immigrants coming through Ellis Island, as it had been in previous decades, but by migrants from the rest of the country, leaving the hinterland for the allure of big-city life—and, for many, the chance to strike it rich.

Until the turn of the twentieth century, stock markets were small and parochial, dominated by insiders. The practice of buying and selling stock was disdained by polite society as a grubby endeavor, the handiwork of gamblers and social misfits. Most Americans knew nothing of the daily travails of the stock market. In the small- and medium-sized towns where most lived, the money games played in the big cities were but a distant rumor.

That changed in the early 1900s, as industrialization took hold of the country. In need of capital to invest in factories and market their products, companies flocked to the New York Stock Exchange, where daily trading volumes soared and ambitious young men matched wits. (It is impossible to ignore that this was a world shaped almost entirely by men. Women were neither welcomed on the trading floor nor permitted to shape its rules—they were observers in a drama they were not allowed to direct, cast in supporting roles as hostesses, wives, or muses.)

By the 1920s, the stock market was like the engine room of the entire economy, its machinery pushed to the very edge of its capacity, running red-hot, a spectacle that drew Americans to it like moths to a flame.

Until finally it broke.

Lengthy, uninterrupted booms, like the one in the 1920s, produce a collective delusion. Optimism becomes a drug, or a religion, or some combination of both. Propelled along by a culture of hot tips, one-of-a-kind deals, killer sales pitches, and irresistible slogans, people lose their ability to calculate risk and distinguish between good ideas and bad ones.

And at the top of industry and government during any mania are people who are often no different than anyone else—flawed, self-interested, complicated. They push events forward, sometimes boldly, sometimes blindly, often without fully grasping the consequences of their actions. It is a slow boil—until everything spills over. Some take advantage of the moment without even realizing it. Others rationalize, convincing themselves they’re serving a greater good. Whether seeking power, approval, or simply the thrill of beating the odds, they rarely believe the worst is coming.

The almost singular through line behind every major financial crisis is one thing: debt. It’s a powerfully optimistic force. If we envision the future as a land of ever-expanding opportunity and affluence, why shouldn’t we marshal some of those resources for use today? That’s what debt does. It draws the wealth of tomorrow into the present. Problems arise when we get greedy and take too much. Nobody knows for sure where the line is—or what to do when we discover we’ve gone past it. At that point, panic is the natural reaction. The future suddenly grows so small and dark that there isn’t enough optimism left to draw from.

A telling anecdote from this era involves a young Groucho Marx.

In the fall of 1929, with the market’s seemingly unstoppable rise, Marx was regularly spending hours reading the ticker tape at his local brokerage, the Newman Brothers & Worms branch in Great Neck, Long Island. He had, according to his son, “no gambling instincts, and never even in the most prosperous times did he stop looking for ways of keeping expenses down around the house.”

“Look at this, will you? RCA is up to five hundred and thirty-five a share. Have you ever seen anything like it?” Groucho’s broker, Mr. Green, said to him.

Groucho hadn’t. “One thing I don’t understand, Mr. Green. I own RCA, too. But how can it be selling for five hundred and thirty-five a share and never declare a dividend?”

As if speaking to a child, the broker explained, “Mr. Marx, it’s different for the average man not schooled in high finance to comprehend what is going on today. But I can tell you this. Wall Street is no longer localized. We’re now in a worldwide market. It’s going to keep going up and up and up. Is that clear?”

Groucho was skeptical.

“Look, Mr. Marx, this thing is bigger than both of us. Don’t fight it. Just be assured that you’re going to wind up a very wealthy man. And I know what I’m talking about. I’m in the market myself. I’m a family man, and I wouldn’t take the risk if I didn’t know the market is sound.”

Groucho was impressed by this line of reasoning and repeated it to his friend Max Gordon, a theatrical producer in New York, who had also started playing the market: “Wall Street is no longer localized. We’re now in a worldwide market. The possibilities are limitless.”

“This is better than working,” Gordon said.

Marx, who was still a vaudeville performer at that point in his career, took stock tips from almost anyone, friends and strangers alike. When an elevator man at the Ritz in Boston tipped him off to buy stock in Union Carbide, Marx went to the nearest brokerage—which was literally inside the hotel, given their ubiquity—and wrote out a check for $9,000 to purchase shares. A fellow actor who dropped by his dressing room told him about the Goldman Sachs Trading Corporation, a public trust company that the private partnership of Goldman Sachs had launched to get in on the action of the stock market boom. Marx promptly bought $27,000 worth of shares.

Then, during the last week of October 1929, Marx got a phone call from his broker: “There’s been a slight break in the market, Mr. Marx. You’d better get down here with some cash to cover your margin.”

Groucho ended up having to mortgage his home to pay the broker.

“Aren’t you the fellow who said nothing could go wrong—that we were in a world market?” Groucho said to Mr. Green.

“I guess I made a mistake,” said an embarrassed Green.

“No, I’m the one who made a mistake,” said Groucho. “I listened to you.”

We all love a good story, a concise explanation of how the world works. We all love an easy buck. Temptation has driven human folly for centuries, whether the serpent in the Garden of Eden or the market manias of cryptocurrency or artificial intelligence. Each wave seduces us into thinking that we’ve learned from history and, this time, we can’t be fooled.

Then it happens again. This is how it happened in 1929.

PART I

ONE

FEBRUARY 1, 1929

On the chilly, windswept evening of February 1, 1929, an hour or so before midnight, Thomas Lamont and his wife, Florence, arrived by limousine at Pier 54 near Fourteenth Street in Manhattan. The Beaux Arts complex, designed by the same architects as Grand Central Terminal, was a beacon of grandeur and elegance amid the industrial squalor and reeking meat markets of the far West Side.

The handsome, well-dressed Lamonts beamed as they made their way through a throng of reporters and photographers to the gangway of the Aquitania, a luxurious, four-funneled, 901-foot ocean liner bound for Cherbourg, France.

Lamont, the distinguished fifty-eight-year-old senior partner of J.P. Morgan & Co., was part of a delegation of celebrated American businessmen who were being dispatched to Paris for what was expected to be a sharply contentious conference on German war reparations.

It was the second such conference in four years and the one major geopolitical challenge that hung over the global economy. The problem that Lamont and his peers needed to address had remained essentially unchanged since the end of the Great War—Germany was either unwilling or unable, depending on whom you believed, to pay England and France the immense financial settlement that had been agreed upon at Versailles in 1919. The United States, which hoped to relieve some of the pressure by convincing its allies to reconfigure the debt payments owed by its former enemy, was trying to keep the conflict from boiling over.

That American business leaders now bore the responsibility for such diplomacy was emblematic of just how completely commerce had eclipsed politics as the driving force of the 1920s.

“Mr. Lamont! Mr. Lamont!” reporters cried out, hoping to pry loose a useful quote.

“What do you have to say about Germans not making payments?”

“Not one word,” he said cheerfully, steering his wife toward the Aquitania.

Lamont, who enjoyed chatting to reporters, always exercised the discretion of a topflight banker and wouldn’t allow himself to be goaded into igniting a controversy on such a sensitive issue.

Though he was technically second in command to Jack Morgan at J.P. Morgan, everyone knew that Lamont effectively ran the bank. Jack, the eldest son of John Pierpont Morgan Sr., may have been the image of his late father, with the same jowly, unhandsome face etched in permanent irritation, but the resemblance ended there. Jack lacked his father’s gravitas. Smart enough to understand his limitations, Jack made sure to always have Lamont close at hand to serve as the controlling authority in any room, the iron fist in the velvet glove, always keenly aware of how a given situation was unfolding. “Mr. Morgan speaks to Mr. Lamont, and Mr. Lamont speaks to the people” was an office adage.

Jack was also bound for Paris that night. He had been chosen as one of the lead negotiators and brought Lamont along as his “alternate” knowing full well he would be relying heavily on him. Avoiding the press by having his car take him around to the back side of the Aquitania, Jack boarded via a special gangplank for the ship’s workers, away from the hoopla. He quickly made his way to his stateroom while the photographers were focused on American businessmen like Lamont, who Jack knew savored their time in the limelight.

Lamont was feeling very much at the peak of his powers, the epitome of what it meant to be a banker at the so-called House on the Corner, at 23 Wall Street. Patricianly handsome in his de rigueur black pinstripe suit and white shirt, he had striking blue eyes that crinkled when he smiled—which was often. The son of a minister, Lamont had more money than he could have ever imagined and was on a first-name basis with everyone from Charles Lindbergh to Benito Mussolini. His reputation was immaculate. “A tangible person” is how Time described him. “Tell him a joke and he will laugh. Offer him an idea and he will develop it. Put him in the middle of a problem and he will begin to solve it. The doors of his mind swing easily ajar…”

Having negotiated deals for J.P. Morgan across Europe, Latin America, and Asia, Lamont thought of himself not just as a banker but as an ambassador of American affluence—a friend to kings, dictators, and whoever might be in charge in a given country. There wasn’t a problem in the world that couldn’t be solved through the wizardry of credit, he believed. Whatever might be unaffordable today could be structured into a manageable schedule of future payments. This model had brought incredible prosperity to the United States over the past decade; why should it not work wonders for Europe—and for war reparations?

As he boarded the Aquitania that night, Lamont was especially proud that his success was about to become dynastic: His oldest son, Thomas Stilwell Lamont, was following in his footsteps. Just a month earlier, on January 1, 1929, young “T.S.L.” had been elected to the partnership at Morgan, along with Jack’s son Henry.

In announcing the appointments, The New York Times noted the young men had won “the most coveted posts in Wall Street…From a financial standpoint…a Morgan partnership always has been rated among the chief plums in American banking…It is believed that a partnership in the firm yields at least $1,000,000 a year.” Indeed, on December 31, 1928, to mark a stellar year, Jack Morgan had handed out bonus envelopes to Lamont and the other senior partners, each containing a minimum of $1 million.

In Lamont’s view—and that of almost everyone in his inner circle—1929 promised to be an even better year. “Some influences that will serve to shape this year’s financial history,” opined a New York Times columnist, “are exceedingly favorable; among them the country’s great wealth, its sound banking system, its expanding production and consumption…the conservative methods of trade, labor’s high wages and contentment, and the increasing exports.” The New York Evening Post, its conservative competitor, was in rare agreement. “There are basic indications that indicate this prosperity is self-perpetuating,” its financial expert, Paul Willard Garrett, wrote.

The stock market was up a remarkable 62 percent since the same time in 1928, more than anyone had imagined was possible. At the market’s close on that February 1, the Dow Jones Industrial Average sat at 319.69, up from 197.87 a year prior.

On the same day that young Tom had made partner, New Year’s Day, the Lamonts hosted a dinner party at their vacation cottage near Charleston, South Carolina, in honor of Ambassador to Mexico Dwight Morrow and his wife, Elizabeth. The guests included the distinguished federal appellate judge Learned Hand and his spouse, Frances, and Walter Lippmann, chief of the editorial page of The New York World, and his wife, Faye.

In an after-dinner parlor game, Judge Hand, acting out his assigned role of Othello, pretended to smother the petite Faye with a pillow. Unfortunately his enthusiasm and heft were too much for Faye. Blood streamed from her nose, which now looked askew as she pushed herself up, unsteadily, from the couch. The judge was utterly embarrassed.

Lamont, who was enamored with the dinner and perhaps what it said about how far he had come in high society, boasted to his youngest son, Austin, in a letter about the evening that Judge Hand “fears that all the rest of his life his career as a United States judge will be dogged by the fact that he went to a party and broke a lady’s nose.”

As fervently as he espoused the new religion of Wall Street, however, Lamont stood apart from his peers. His modest upbringing and self-propelled rise through the world of business gave him a broader perspective. He aspired not to wealth so much as greatness. He knew that he, not Jack Morgan, was the true inheritor of the J.P. Morgan ethos, the idea that great men could govern the unruly powers of the market and create a better world. He had spent his whole life training for this moment, mastering the high-stakes diplomacy so badly needed to deflate the growing German bitterness. He felt more than ready for the challenge.

With Florence on his arm, he turned away from the photographers in front of the Aquitania. This trip—and this year, 1929—could cement his legacy.

Born in 1870, Lamont was raised in upstate New York, where his father, an impoverished Methodist minister, encouraged his four children to read books and develop skills as independent thinkers.

Although the Lamonts had little money, Thomas was an overachiever who earned his way into Exeter and then Harvard, where he thrived thanks to his intellect, solicitous personality, and sincerity. As a freshman he became an editor of The Harvard Crimson and later president of the paper. Two days after graduating, Lamont went to work as a reporter at the New-York Tribune, immersing himself in the “grimiest parts of the city.” He boldly sought out stories that took him far from the respectable precincts of Manhattan, including “a murder in Hell’s Kitchen, an outbreak of cholera on the Lower East Side and gang battles in Chinatown.”

“The other reporters used to poke fun at me,” he would later remember, “saying that I was always trying to learn the job of the man just ahead of me. That was more or less true.”

Married at the age of twenty-five, and wanting to give his new wife, Florence, the standard of living he believed she deserved, Lamont switched to a career in business, eventually joining his friend Henry Davison at Bankers Trust, a new type of financial firm that took far more risk than traditional banks. The first decade of the twentieth century was a spectacular time to begin a career in finance. People who’d amassed fortunes throughout the country—whether in textiles, mining, metal, retail, or railroads—poured into New York, eager to put their wealth to work in new and exciting ways. All you needed to attract these newly minted millionaires was an honorable reputation and an imposing building with expensive marble detailing.

Lamont prospered, as did Bankers Trust, but just as he was settling into his new career, the great Panic of 1907 enveloped Wall Street, the same traumatic event that had left such a powerful impression on Charles Mitchell. Bankers Trust, though an honest and well-respected institution, was not immune. Its survival, along with perhaps the entire industry, ended up depending on the whims of one man, the great J. Pierpont Morgan.

The legendary Morgan was seventy years old in the fall of 1907, nearing the end of his epic reign. Founded in 1871, J.P. Morgan & Co. was regarded as the “greatest international banking firm in the world” and “what the business world considered the headquarters of financial power.” No single person in the history of Wall Street had ever wielded more power and influence than J. Pierpont Morgan. Under his rule, the House of Morgan had helped modernize the American economy, transforming the sprawling hinterland of relatively small enterprises that characterized nineteenth-century capitalism into the mighty corporate structures that dominated the twentieth century.

Morgan had been attending an Episcopalian conference in Richmond, Virginia, when the crisis struck. The veteran of a half dozen panics, he was initially unfazed; however, after several frantic messages from his partners, he had his private Pullman car attached to a steam engine and returned to Manhattan.

On the evening of Saturday, November 2, 1907, after a week of more than two dozen bank failures, Morgan gathered the titans of the financial world at his home on Thirty-Sixth and Madison and ordered the men to decide among themselves which of them would be fortified with infusions of capital and which would be allowed to fail, in the process wiping out the holdings of thousands of depositors, destroying businesses, and ruining careers and lives. Lamont, who had been invited to the meeting by Davison with the hope he’d help find a solution, arrived just past midnight and was only a bit player at the edge of the room. But he never forgot the experience. “A more incongruous meeting place for anxious bankers could hardly be imagined,” he later reflected. “In one room—lofty, magnificent tapestries hanging on the walls, rare Bibles and illuminated manuscripts of the Middle Ages filling the cases; in another, that collection of the Early Renaissance masters—Castagno, Ghirlandaio, Perugino, to mention only a few—the huge open fire, the door just ajar to the holy of holies where the original manuscripts were safeguarded…And…an anxious throng of bankers, too uneasy to sit down or converse at ease, [paced] through the lovely marble hall and up and down the high-ceilinged rooms, with their cinquecento background, waiting for the momentous decisions of the modern Medici.”

Tensions ran so high that Morgan locked the bankers in his library to prevent them from leaving without a deal while he played solitaire and smoked cigars in an adjacent room. It was clear that unless they found a solution, the American banking system could fail. “The situation must not get further out of hand,” Lamont later wrote about the crisis. “It had to be saved.” And it was. The bankers agreed to draw a line between the institutions they deemed viable and all the others and commit to funding those that fell on the right side of the line. By sheer force of will, one man had pulled the entire economy back from the abyss, a demonstration of personal power by an American financier that felt instantly anachronistic. Would such a gambit ever work again?

Three years later, in late October 1910, Lamont got a surprise summons by Morgan himself to appear at 23 Wall Street. Although the panic had long since subsided, it was still fresh in his mind, and Lamont, who was enjoying success at Bankers Trust, didn’t know whether to be thrilled about the invitation or wary that another crisis was unfolding.

Ushered into the partners’ enclosure, where the chosen few worked side by side, he encountered J. Pierpont sitting behind his own rolltop desk.

“Come over by me,” Morgan said, directing his piercing eyes at the younger man. He then stared contemplatively at Lamont as if to measure his worth. “Lamont,” he finally said, “I want you to come down here as a partner on January first next.”

Lamont was then forty years old and had little experience compared to other Morgan partners, like his friend Davison from Bankers Trust, who had moved to J.P. Morgan as a partner the year before.

“But what could I do for you?” Lamont, always seeking favor, asked.

“Oh, you’ll find plenty to keep you busy,” J. Pierpont assured him. “Just do whatever you see before you that needs to be done.” There was a pause, and then Morgan asked, “You’ll come, of course, won’t you?”

Lamont nodded in agreement but returned the next day to add one condition: He wanted three months of vacation a year. Travel, he explained to Morgan, was essential to understanding the world and would therefore be valuable to his work at J.P. Morgan.

“Yes,” said J. Pierpont, “by all means,” and proceeded to recommend a cruise down the Nile.

“That’s probably more than I can manage with four children,” Lamont replied. By now Thomas and Florence had three sons and a daughter: Thomas S., Austin, Eleanor, and Corliss.

“Nonsense,” Morgan told him. “Take along a couple of nurses, and you will be all right. That’s what I did with my children when they were young.”

The news of Lamont’s elevation to a rolltop desk at 23 Wall Street spread quickly. “You have joined the seats of the mighty,” wrote a close business associate, and as a result, Lamont would be able to influence the moral standards of the “lesser lights in the business community.”

In his early days at Morgan, Lamont was inculcated in the firm’s rituals and customs, but he also gently pushed against the tide. The Morgan ethos was that its employees stay out of the public eye. The firm did dispense money—via intermediaries, never directly—to bribe journalists and plant stories. But talking directly to a reporter was to be avoided at all costs.

By shunning the press, Morgan had created an air of mystery and intrigue around itself. Lamont ushered in a new strategy. By engaging journalists, he explained, the firm would stand a much better chance of getting the coverage it wanted. Through personal letters and lunches, he cultivated writers, editors, and publishers, and placed advertising where it bought “goodwill.” He encouraged the other partners to do the same, to demonstrate that the House of Morgan was indeed “composed of human beings.”

After the Panic of 1907, the national political sentiment turned sharply against the New York banking establishment. Critics called it “the money trust” and said its members enriched themselves at the expense of ordinary Americans.

“The great monopoly in this country,” said Woodrow Wilson early on in his run for president in 1911, “is the money monopoly.”

That same year a congressional investigation was mounted by the Committee on Banking and Currency, led by Representative Arsène P. Pujo of Louisiana. The main target was J. Pierpont Morgan himself. His health fading, Morgan was called to testify before Congress, facing off against an intelligent, ambitious lawyer named Samuel Untermyer, who was the committee’s counsel-investigator. Morgan had spent his life trying to avoid such a public spectacle; in past years, he would have arranged to be out of the country until the scrutiny subsided. But now there was simply too much public pressure for him to avoid responding.

Rather than hire a publicist to handle questions surrounding the investigation, Lamont convinced Morgan and his partners that he would handle the matter himself. In doing so he assumed huge personal risk, for if his strategy backfired, what standing would he have left at the firm?

Lamont’s plan was simple: He would meet with reporters and editorial boards and offer them a counternarrative. The problem was not that bankers had too much power, he would tell the press, but rather that the banking system itself was poorly organized and administered. Courageous private citizens like J. Pierpont Morgan had been effectively forced to step into the breach left by the government, he suggested.

To help prepare him to testify, Lamont returned to Morgan’s library on Thirty-Sixth Street. Morgan bristled with resentment at being compelled to defend a career he regarded as honorable and above reproach.

The proceedings took place a week before Christmas 1912. Morgan’s performance over the course of two days was an epic clash of the old world running hard into the new. Under questioning by the hard-charging Untermyer, Morgan fiercely held his ground, admitting nothing, not even that he held any influence whatsoever over the actions of others.

Q: Your idea is when a man has vast power, such as you have—you admit you have, do you not?

A: I do not know it, sir.

Q: You admit you have, do you not?

A: I do not think I have.

Q: You do not feel it at all?

A: No, I do not feel it.

Morgan made no attempt at persuasion or conciliation, rejecting any notion that the authority he wielded was the result of his own machinations. If other people deemed him powerful and bent their will to suit his, well, how could he be held accountable for that?

Perhaps the finest distillation of the Morgan creed came when Untermyer pressed Morgan about the nature of credit.

Q: Is not commercial credit based primarily on money or property?

A: No, sir, the first thing is character.

Q: Before money or property?

A: Before money or anything else. Money cannot buy it.

Q: So that a man with character, without anything at all behind it, can get all the credit he wants, and the man with property cannot get it?

A: That is very often the case.

Q: That is the rule of business?

A: That is the rule of business, sir.

Bitter to his last days, J. Pierpont Morgan died three months later in Rome on March 31, 1913. His body was returned to New York for a funeral at St. George’s Episcopal Church on East Sixteenth Street. Morgan left instructions for the ceremony: It was to be brief, lasting only forty-five minutes, and feature mostly hymns with no eulogy. Morgan, as ever, was not going to let anyone speak on his behalf.

There was no question that Morgan’s successor as head of the firm would be J. P. Morgan Jr., Jack. But there was also no question that Jack would ever be capable of filling his father’s shoes on his own. And he didn’t like being in the limelight: When he was a teenager he had been the subject of an attempted kidnapping, an experience that led him to do everything he could to avoid having a public profile. So he was content to play the role of a quiet figurehead while Davison, Lamont, and a handful of other senior partners dictated the direction of the firm. During the Great War these men took turns being Morgan’s proxy, dealing with presidents, prime ministers, secretaries of state, finance ministers, and other high-ranking officials, especially those of America’s closest ally, England.

At the dawn of the 1920s Lamont was entering the prime of his career as one of the last links between the old system, when a single man could virtually bend the market to his will, and the hard-rushing future, when it grew into a force almost beyond human comprehension.

Lamont knew that the eight-day voyage aboard the Aquitania would be an important one, as he would have to deal with matters beyond the reparations negotiations he was on his way to oversee.

Earlier that February morning in 1929 before boarding the ship, he and his Morgan partners had sent nearly 230 letters and telegrams to their leading clients and connections within and outside of the banking community to announce what they considered an irresistible offer.

The House of Morgan had begun a new kind of banking business, putting together syndicates of investors to create new speculative companies using enormous amounts of leverage. Such blatantly risky ventures would have prompted a look of disgust from Morgan if he were still alive, but Lamont and his team had gotten caught up in stock market fever. This was a new era. Customers were clamoring for deals. They had to get with it or be left behind.

The most audacious of the firm’s partnerships was with the Van Sweringen brothers of Cleveland, reclusive, oddball bachelors named Oris and Mantis, who shared a bedroom at their sprawling country estate. For all their quirks, the Van Sweringens were fearless dealmakers, taking on gigantic loans to build the beautiful Shaker Heights suburb, as well as the commuter rail that linked it to the city, and assembling a portfolio of railroad lines. With the aid of Morgan partners, the Van Sweringens consolidated their assets under a $3 billion holding company called Alleghany Corporation, a complex teeter-tottering empire of bonds and preferred shares.

What the Van Sweringens had built in Alleghany was less an exception than a preview of the latest Wall Street craze: the investment trust. By the mid-1920s, promoters had discovered that the magic of leverage could be packaged and repackaged. A trust would raise money from the public, buy a basket of stocks and bonds, and finance itself with new layers of preferred shares and debt. Then a new trust might be launched to buy shares of the first—piling still more leverage atop what was already there. On the surface it looked like diversification; in reality it was leverage amplified. To ordinary investors it seemed a safe way to let professionals manage their money, but the real draw was the names behind them—Morgan, Goldman, and the other grandees of finance. Investors weren’t buying companies so much as they were buying reputations. And for a time, that faith was enough: The most fashionable trusts doubled or tripled in price, often trading at extraordinary premiums above the worth of the assets inside.

To the general public, Alleghany shares were priced at $35, which Lamont knew would sell easily in the rising stock market. Morgan partners, however, were able to buy them at a secret price of $20 a share. Lamont availed himself of 18,500 shares, netting a quick paper profit of $277,500. Seizing the opportunity to spread goodwill, Lamont then went around to “friends of the firm”—including former President Coolidge, Secretary of the Navy Charles Adams, the pioneering aviator Charles Lindbergh, General John J. Pershing, as well as Mitchell, Bernard Baruch, and John Raskob—and offered them the same discount. These telegrams, such as the one sent to prominent businessman William Woodin, read like a casual friendly note:

Dear Mr. Woodin,

Although we are making no offering of stock, as it is not the class of security we wish to offer publicly, we are asking some of our close friends if they would like some of this stock at the same price it is costing us, namely, $20 a share. I believe the stock is selling in the market around $35 to $37 a share, which means very little, except that people wish to speculate. We are reserving for you 1,000 shares at $20 a share, if you would like to have it. There are no strings tied to this stock, so you can sell it whenever you wish…We just want you to know that we were thinking of you in this connection.

Lamont personally dictated the telegrams that went to the most important people, including one to Albert H. Wiggin, the chairman of Chase National Bank, who, it was rumored, was the only man to have ever turned down a Morgan partnership. Wiggin was traveling by rail that afternoon, so Lamont, wanting to make sure he received it immediately, sent it to the train he was aboard: “Car No. 27, Room A, arriving Douglas, Arizona, 1:01 p.m. today.” The offer of ten times the number of shares than had been offered to Woodin amounted to an instant profit of $150,000.

The Van Ess boys of Cleveland have just organized Alleghany Corporation, being a holding company, to take over their principal investment in railroad shares. Yesterday we issued 35 million of collateral trust bonds. Today Guaranty is offering 25 million preferred stock. We are making no offering of common stock, but have set aside for you and immediate associates 10,000 shares at cost to us, namely, $20. The counter market is quoted at $35.

Please wire promptly your wishes. I am sailing for Paris tonight.

With best regards,

TOM

Aboard the Aquitania Lamont awaited replies to his offer. After years of traveling by luxury ocean liner, he felt comfortably at home on the 3,230-passenger ship, with its vast lounging rooms and promenades, with showcases of jewelry and fine china, and a main staircase with a fine wrought-iron balustrade copied from a French château. At 11 a.m. waiters served consommé. Afternoon tea could be enjoyed in the English-style garden lounge, and exercise could be taken in the gymnasium and a seven-and-a-half-foot-deep swimming pool.

The spacious first-class dining room, decorated in Louis XVI style, served not only caviar and other delicacies but the finest wines and spirits—a luxury not permitted on American-based liners during Prohibition. Daily social events included deck tennis and shuffleboard, Ping-Pong, dancing, and a costume ball.

Lamont had one other audacious piece of business to conduct on the ship. He’d been privately scheming for months to bring about what he considered a transformative merger between International Telephone & Telegraph (ITT), RCA, and Western Union, a potentially monumental achievement that would create a worldwide telecommunication network—and a massive monopoly that was likely illegal under an antitrust law passed in 1927. That didn’t deter him.

Lamont represented ITT as a client. And it just so happened that Lamont now found himself on a boat for over a week alongside his new colleagues-in-arms representing the United States: Owen Young, the president of General Electric, the parent of RCA, and RCA’s leader, David Sarnoff. Both companies were also clients of the House of Morgan.

“Long talks with Young about Radio Corp. merging with Western Union,” he wrote in his diary on the third day aboard. Young, he wrote, proposed creating one investment trust to put the deal together. Lamont was optimistic he could pull off the audacious deal.

Lamont, who had a touch of seasickness by the second day of the trip, locked himself in his room to write two lengthy cables to his office back in New York about the deal. He wasn’t concerned about missing too much going on aboveboard while he was working, because as he lamented in his diary, it was “not very cold, but no sunshine. Mist and a heavy rolling sea.”

After eight days at sea the Aquitania docked in Cherbourg on February 8. The Lamonts awoke at 6:15 a.m. and hurried onshore. “Had quiet and fairly restful trip—a little reading, dancing, bridge, irregular, but a good deal of sleep,” Lamont recorded in his diary.

The American delegation boarded a special train and arrived in Paris by 3 p.m. on February 8, where a horde of newspaper reporters descended.

“Had a wonderfully fine crossing,” Morgan told them. “I enjoyed it. No, I cannot say how long the conference will last.” Young, Lamont, and Jack Morgan posed for a few pictures.

“Plenty of hard work this time,” Young observed. “Of course, I feel optimistic but can say nothing now until the conference gets started.”

Lamont smiled.

TWO

FEBRUARY 14, 1929

From his office at 55 Wall Street, Charles Mitchell walked three blocks in the frosty morning air of February 14 to the impressive new building that housed the Federal Reserve Bank of New York.

The structure occupied a full block bordered by Liberty, Nassau, and William Streets and Maiden Lane, a fortresslike Renaissance palazzo of limestone and sandstone. Though it had just opened in 1924, its massive stones and copious ironwork conveyed eternal strength, as if it were a pillar of civilization that had stood undaunted for centuries—and would continue to for centuries more.

Mitchell entered the double-arched entryway and strode into a long hall, his footsteps echoing off the marble floor and into the vaulted ceilings of stone and brick. Tellers stood behind cages, protected from the public by more ornamental ironwork. The lowest of the bank’s four basement floors contained its enormous vault, where gold was stored in 122 compartments, the designated holdings of many banks and entire nations. The eighteen stories above held offices and meeting rooms, as well as a cafeteria and gymnasium.

Six weeks earlier, Mitchell had been appointed to the board of the Federal Reserve Bank of New York. It was validation of his exalted place in American society, as one of the chosen, respected not only for his achievements and personal wealth but for his integrity and judgment. Though the Fed itself was barely fifteen years old, it already cast a large shadow over the markets. Wall Street was becoming worried that if the Fed made a misstep, it could snuff out the boom.

The way the Fed had been set up was the result of a political compromise between big-city industrialists and financiers—who believed that the country needed a strong national bank to set borrowing rates, direct the flows of capital, and steady the economy during panics and busts—and the representatives of small towns, farmers, and rural folk, who feared the centralization of power. On paper, the Fed neatly satisfied these competing concerns with a logical, egalitarian structure: twelve regional banks that each had their own boards and set their own policies, overseen by the Federal Reserve Board in Washington. But the reality that had emerged in the decade and a half since its founding was that the New York Fed, due to its proximity to Wall Street, practically ran the entire institution.

When the Fed was born, Mitchell had been in his mid-thirties, overseeing a small investment firm and still searching for his big opportunity. In a way, he and the Fed had grown up together, and it made perfect sense for him to join the board of the New York Fed and serve alongside the likes of General Electric president Owen Young and Thomas Lamont.

Mitchell owed his ascension to the late Benjamin Strong, who had served as governor of the New York Fed from 1914 until his death in 1928. Strong had been a formidable player in world affairs. He worked closely with central bankers from England, France, and Germany to rectify the disastrous financial aftermath of the Great War, while helping the U.S. economy quickly recover from near calamity in 1921 when unemployment jumped to 12 percent after government wartime spending plummeted. Strong helped stabilize the economy and begin the greatest period of growth it had ever seen. Despite all this, Strong had been the target of frequent political attacks from rural-state Democrats in Washington.

Mitchell himself had been a critic—sometimes publicly and sometimes privately—of interest rate decisions by the Fed, so it was a bit of a surprise when Strong expressed his wish to have Mitchell join the board. In August 1928, just two months before he died, Strong wrote Young that he had “a high regard” for Mitchell, judging him to be “truly one of our ablest bankers.”

Strong had not always thought so highly of Mitchell. In 1925, when the possibility of his joining the board was first floated, Strong called it “dangerous,” telling one of the board governors that Mitchell “will interpret” an invitation to serve on the board “as indicating we are unduly affected by his attacks and he has won a victory.” He added: “Mitchell, as you realize, has an exceedingly active and well developed ego.”

But Strong had reasons for wanting Mitchell on the board—largely as a way to muzzle him. Strong was so concerned about the political status of the Fed, still a young institution and not yet fully trusted by the public, that he feared the repercussions of Mitchell airing grievances about the institution publicly.

“Should he become a director before any hearings, it would…put him in a position where he would not be willing to appear,” Strong wrote, suggesting the possibility that keeping his enemy close was the best strategy. Strong said Mitchell should join the board if he was willing to “play the game” and mute his criticism of Fed actions.

Strong had many allies on Wall Street, who, he later confided to Young, worked “to educate [Mitchell] as to our policy and philosophy.” Strong added that “so long as [Mitchell] is a member of the board of directors he should be willing to accept the decision of the directors…and not engage in outside criticism but be loyal to the majority of his associates.” He went on: “I am convinced that a nice talk with him on this subject would ensure that such would be the case, and it is not so much the need for having an understanding in advance as it is to avoid any possibility of a misunderstanding…and the distinction in Mitchell’s case is important.”

Strong had one other reservation about Mitchell: the “inevitable influence which his knowledge of what we are doing [at the Fed] may exert upon his policy in running the City Bank”—one of the oldest problems in the conflict-ridden industry of banking. As Strong put it, “How can a director…be disinterested and impartial in his attitude in the Reserve bank as well as in his own bank, and not take an unfair advantage of his confidential knowledge?” After Strong had a conversation with Mitchell “to tell him very frankly the way we feel,” his directorship was arranged.

But Mitchell was still Mitchell. He trusted his own experience far more than any organization’s rules and customs. So as he entered the building that February morning, he was fully prepared to speak his mind.

In a speech he had delivered on New Year’s Eve, Mitchell had celebrated National City’s 1928 results as the best in the history of the institution and predicted that the stock market would continue to rise, due “to prevailing confidence that American business is destined to grow rapidly in volume and that the leading corporations will enjoy increasing prosperity,” he said. “No complaint regarding the level of stock prices, however, is justified except from the standpoint of credit strain…so long as the responsibility for credit distribution is held by the banks who obviously feel that responsibility, business should not suffer.”

Within a month, his optimism was put to the test. On February 2, the Federal Reserve Board in Washington, fearing that a speculative bubble was taking hold, issued an advisory to the Fed’s regional banks, discouraging them from making loans to support stock speculation, particularly stock bought on margin, that is, stock that was purchased by paying only a small percentage of the actual price and financing the rest with credit, like a down payment on a home loan.

Mitchell was shocked and upset by the new dictum. Buying on margin was not a new phenomenon—it had been an accepted practice since the earliest days of the stock exchange. What was different was that it had recently migrated beyond the professional class and into the mainstream, thanks in large part to Mitchell. Through National City Bank and its securities affiliate, National City Company, he aggressively extended credit—both to individual investors and to brokerage firms, making it far easier for them to offer margin accounts to their customers. Almost anyone could now put down as little as 10 percent of the purchase price of a stock and borrow the rest. Margin loans had grown from $1 billion at the beginning of the decade to nearly $6 billion, inflating the market into what many now feared was a dangerous bubble.

To Mitchell there was nothing wrong with American consumers using credit—they were already using credit to buy cars, refrigerators, and radios. So why not stock? Mitchell and National City Bank were making it possible for ordinary Americans to invest in the future. Who could say with any authority what the proper price of a stock should be? It was up to the market to decide. And if the Federal Reserve wouldn’t accept the common stock of America’s greatest corporations as collateral for loans—companies like RCA, GM, U.S. Steel, Standard Oil, Sears, and AT&T—what would they accept?

The Fed board’s anti-speculation announcement triggered a nosedive in the value of some stocks—the Dow had fallen 4 percent since the beginning of February—as well as a hike in borrowing rates on “call money” loans. These were short-term loans, also known as “overnight” loans, secured against stocks or bonds and that could be “called”—meaning that the borrower would have to repay the money at the moment of the call. New York banks made such loans to their own clients, to domestic banks outside New York, and to corporations, investment trusts, individuals, and foreign banks. Although the market quickly rebounded, the Fed had made its position clear: Speculation fueled by margin debt would not lead to sustainable economic growth and needed to be discouraged.

A few days after the announcement, George Harrison, the governor of the New York Fed, met with the Fed’s Washington board. He explained that his board members, representing Wall Street, felt that the Washington group’s course of action needlessly penalized stockholders. How could the board know what investors did with the funds they borrowed against their stock? His counterproposal was that Washington raise interest rates slightly to keep European speculators from playing the U.S. market. Harrison believed, in that moment, that it was better “to have the stock market fall out of the tenth story, instead of the twentieth later on.”

The Washington overseers would not be dissuaded, however, and on February 6 issued a formal statement that was a stern scolding aimed at the public itself:

The Federal Reserve Board neither assumes the right nor has it any disposition to set itself up as an arbiter of security speculation or values…When it finds that conditions are arising which obstruct Federal reserve banks in the effective discharge of their function…it is its duty to inquire into them and…to correct them; which, in the immediate situation, means to restrain the use, either directly or indirectly, of Federal reserve credit facilities in aid of the growth of speculative credit.

Its tactic here was “moral suasion,” an attempt to persuade investors to act rationally. Rationality, of course, is in the eye of the beholder, and though the market suffered a few bad days after this latest Fed salvo, buyers continued to keep prices aloft. The American stock market was so appealing that the Bank of England raised the bank rate from 4.5 to 5.5 percent, hoping that the higher interest rate would keep British money from gravitating to Wall Street.

Across the country, speculating in the stock market had become so widespread and profitable that it seemed almost as if everyone were leveraged, committed, and in on the action. On February 12, a Philadelphia banker, Edward C. Benedere, suggested that clerks, stenographers, and women be kept out of the market as a way of keeping in check the public enthusiasm for speculation. So many women had started investing that brokerages had installed specially designated lounges and galleries where they could watch the fluctuations of the market safe from the rowdiness of men buying and selling. Benedere believed women were temperamentally unsuited for trading. “Twenty percent of the persons in the market in the last year have been women, and it is getting to be ridiculous. People are going crazy and mortgaging their homes.” This sexist critique was anathema to Mitchell, whose goal was to bring small customers—both men and women—into the wealth-producing machine of the American markets.

Mitchell entered the New York Fed’s conference room for the February 14 meeting prepared to make the case that the Washington board was steering the country into disaster by trying to dissuade banks from lending to speculators. Many of his fellow board members agreed with his position, but some believed the Fed should raise the discount rate, the interest that banks pay when they borrow money from the central reserve, which would effectively raise rates for everyone. A higher rate, they believed, would tamp down the buying frenzy.

The meeting was called for 2 p.m., just after lunch, and in the ensuing five-hour session, Mitchell argued against raising rates. He linked human progress directly to the invention of newer, smarter financial instruments. Weeks earlier his own bank had come up with an innovative scheme to finance building construction through the sale of stock instead of through traditional mortgages. For his peers on the board of the Fed, ideas like these were too radical.

Despite Mitchell’s efforts, the New York Fed board voted to call Washington for permission to raise the discount rate from 5 to 6 percent. At 3:40 p.m., Harrison in New York called Young in Washington with their proposal. At 6:40 p.m., “Governor Young advised Governor Harrison by telephone that the Federal Reserve Board had disapproved of this action of the directors and had determined the rediscount rate of this bank to be five percent.” The board worried that raising rates by a point would be the worst of both worlds: It wouldn’t puncture the speculative frenzy but could slow the real economy.

The meeting in New York finally adjourned at 6:55 p.m. Harrison then emerged to make the public announcement of the board’s decision.

“I’m sorry, gentlemen,” he told the waiting press, which was eager for any news affecting investors. With weariness evident on his face, Harrison said only, “There is nothing I can say.”

A frustrated Mitchell, knowing he had promised to remain silent, was the first to leave the boardroom, his face grim, a rarity for Sunshine Charlie, as he strode to the elevator.

To the top Ivy League graduates beating a path to Wall Street in the 1920s, Mitchell was an idol. Over the preceding decade he had transformed National City from a sleepy relic into the red-hot engine of the new Wall Street by shepherding a new era of investors into the stock market.

When his bond salesmen complained they had run out of buyers, Mitchell would take them for lunch at the Bankers Club on the top floor of the Equitable Building at 120 Broadway.

“Look down there,” he’d say, pointing to the Manhattan streets below. “There are six million people with incomes that aggregate thousands of millions of dollars. They are just waiting for someone to come to tell them what to do with their savings. Take a good look, eat a good lunch, and then go down and tell them.”

Up until the 1920s, most Americans, even the very rich, had been scared off by Wall Street’s opacity and reputation for self-dealing. With good reason: For decades, a shadowy cabal of insiders preyed upon the “dumb money,” as they referred to newcomers to the market. But Mitchell made it his life’s work to put the uninitiated at ease. Stocks were no different than a vacuum cleaner or a dishwasher. They were all products that improved your life.

“It has always seemed to me that there is and always has been too much mystery connected with banking,” Mitchell liked to say. “We sell our goods over the counter just the same way a clerk sells a necktie.”

Just as consumers could make purchases using credit, the same was true in the stock market. Putting up as little as $10 of his or her own money, an investor could buy a $100 blue-chip stock by borrowing the rest. If within a year the price doubled, a regular occurrence in the late 1920s, the investor realized a profit of $82—an 820 percent return, even assuming an onerous interest rate of 20 percent. Who wouldn’t want to take a stake in the market with such potentially high returns for so little up-front investment?

This only worked, of course, if everyone kept the faith that the market would continue rising. That was what Sunshine Charlie was all about: boosting people’s spirits and spreading the gospel of economic opportunity. He radiated the confidence of a self-made man, wealthy beyond his wildest dreams, whose first job was at a manufacturer of telephone parts for $10 a week.

Born in 1877, Mitchell was raised outside of Boston and, after overcoming a stutter, taught public speaking to put himself through Amherst College. Preternaturally confident, bordering on arrogant, he made no show of humility when his friends voted him “the greatest” in college. His reply? “I am.”

Still, it was marriage, not talent, that showed him what real wealth looked like. His wife, Elizabeth Rend, was the daughter of Colonel William P. Rend, an Irish immigrant who fought on the Union side in the Civil War and later made a fortune in coal and oil. He became renowned for paying Black and white mine workers equal wages.

Colonel Rend offered to give his daughter and her new husband a small yearly allowance, but Mitchell refused. “Charles was fond of the old American way of paddling a canoe,” Elizabeth wrote. “He preferred not to be dependent on an extra oar of bounty.”

Mitchell worked at Western Electric in Chicago after graduating from Amherst and then found his way to New York, where he took a job at Trust Company of America. That was where he learned about the perilous nature of finance: His bank was saved by J.P. Morgan in 1907. He eventually decided to strike out on his own, starting his own firm in 1911 before being asked to join National City Company, the securities affiliate of National City Bank, in 1916. “This was exactly in line with my ambitions,” Mitchell later said. “There was virtually no limit to what might be accomplished in the way of constructive financing.”

As vice president, then president, Mitchell began reshaping National City by broadening its base to bring in what he referred to as “the Everyman.” In September 1917, an article featuring Mitchell appeared on the cover of the premier issue of a new magazine called Forbes. “I had more nerve than capital,” Mitchell was quoted as saying about his early career as a banker. In his first deal he sold $300,000 worth of bonds to banking insiders before they hit the public market. “It was the big game that fascinated him,” Bertie Charles Forbes, the founder of the magazine, wrote, lauding Mitchell as a “financial human dynamo.”

When he was elevated to president of National City Bank in 1921, at the age of forty-three, the company had just four offices. “I am fully mindful of the quasi-public position which The National City Bank must hold, and cognizant as I am of my own shortcomings, I can indeed approach the work with none other than a feeling of solemnity,” he said soberly upon taking the top role.

“I know what I am up against. I’m like a chap that’s going to learn to play the piano. I’ve got to begin by picking out the simple tunes with one finger; then, after a while, I’ll be able to use one hand, and then both hands. And some day I’ll know enough to take it all apart, pull out the bad strings and put in good ones. But it’s a long course of study, and I know it.”

Now in control of both the bank and the stock-trading subsidiary where he had started his National City career, Mitchell launched into creating what he called the “Bank for All,” a modern, diversified financial services corporation, with an emphasis on adding average Americans rather than Wall Street insiders to its customer base. He extended loans to small depositors, allowing them to speculate in the stock market. His dream was to have National City become the first U.S. bank to reach $1 billion in deposits, with the greatest number of overseas branches.

As the head of the bank, his energy was legendary. A big, athletic man, he often covered the five miles between his home and office on foot at a blistering pace reported to be twelve-minute miles.

And as hard as Mitchell worked, he drove his employees harder. When one of his associates was given the task of hiring a new chauffeur for Mitchell, the man asked, “I suppose you don’t want to pay more than the ordinary rate of wages?” “Yes,” Mitchell shot back, “I do,” explaining, “I always want to pay more than the going rate because I want to be in the position to demand more than ordinary service. Get a good man and pay him more than he asks, but tell him that I’ll expect him to keep my hours and they’re long hours.”

In the office, Sunshine Charlie could be intimidating. When an employee took him aside to tell him his pants were unbuttoned, Mitchell fired him on the spot. Another employee regarded Mitchell’s browbeating of his sales force “as if Attila the Hun had coupled with one of the Borgias to create their own Nero.”

But his methods worked. He had established himself as a leader of men, and National City was flourishing. As the bank flourished, so did Mitchell. In 1928, Mitchell was paid a base salary of $25,000, though his total compensation, including bonuses and stock, zoomed well above $1 million, making him one of the best-paid executives the world had ever seen.

As his personal wealth grew, Mitchell very consciously played the part of the modern gentleman. His suits were bespoke. The Mitchells bought a lavish apartment in Manhattan for their growing family—with space for the children’s nurses, maids, and other servants. They quickly outgrew it and moved again to 933 Fifth Avenue, the former mansion of Lamon V. Harkness, one of Standard Oil’s largest investors, which included a music room with sixteen-foot-high ceilings. Elizabeth, who moved through New York with the practiced grace of a banker’s wife but had a steely intelligence underneath her quiet veneer, threw herself into hosting home musicals, a new activity among the rich, often playing piano herself.

The Mitchells also built an impressive estate in the exclusive enclave of Tuxedo Park, northwest of the city, which they called Hilldale. Situated on seventy-two undulating acres, the grounds were designed by Olmsted Brothers, whose founder had designed Central Park. The Mitchells spared no expense on the three-story Tudor and Gothic Revival house, which had gorgeous views of the lake. The second floor had seven bedrooms with en suite bathrooms, four with marble or stone fireplaces.

While rich Manhattanites flocked to the luxurious new towers that had sprouted up all along Central Park in the 1920s, the Mitchells preferred the private splendor of their own building and doubled down, buying the piece of property next door and hiring architects Walker & Gillette, who had designed Hilldale, to create a breathtaking showplace at 934 Fifth Avenue.

The staff of sixteen included a housekeeper, a butler, a valet, a houseman, two footmen, two laundresses, a cook, an assistant cook, five maids, and a French governess.

The Mitchells entertained lavishly. Charles invited a revolving cast of business leaders, politicians, and foreign dignitaries, and among their well-known friends were trader-statesman Bernard Baruch and the publisher Condé Nast. Elizabeth, for her part, was the consummate Wall Street wife, the ideal match for a man who aspired to climb New York’s social ladder in true style. Her beauty, social connections, and philanthropic instincts gave Mitchell’s swaggering image a gloss of sophistication. While he gave her full leeway to indulge her interests, he did not necessarily share them. When they attended the opera, he was known to close the curtains of their private box and enjoy a snooze, even quipping to friends that “maybe I’ll be able to catch up a couple of hours’ sleep there.”

Elizabeth, who had become an accomplished amateur pianist, counted many musicians among her friends and confidants. One night she danced with George Gershwin to a band called the Yacht Club Boys, then sat on the stairs and chatted with the composer.

“I wish I knew what to do,” Gershwin confided in her. “I can stay in New York and accept a tempting offer to write a show, or toss that up and follow the strong urge I feel to work out a new idea of mine.” That would mean going to Paris for a year and studying theory and orchestration and forgoing his considerable income.

“My guess is that unless you follow your real desire, you stand a pretty good chance of writing a pretty bad show,” Elizabeth told him. Gershwin took her advice and went abroad, where he wrote An American in Paris.

Mitchell’s love of the good life was matched by his appetite for risk. The legacy investment banks focused on the tried-and-true industries of the time: railroads and industrial companies. They wouldn’t sell the bonds or stocks of businesses that relied on new technology, like utilities. Mitchell plowed ahead. And he advertised National City services in newspapers and magazines—heresy to traditional firms like J.P. Morgan—as a personal advisor to customers: “National City judgment as to which bonds are best for you is based on both strict investigation of the security and analysis of your own requirements.”

In 1928, Mitchell pushed National City to promote bonds to its customers for a state in Brazil, Minas Gerais, even though an internal company report warned about the “inefficiency and ineptitude…[and] complete ignorance, carelessness and negligence of the former State officials.” With the imprimatur of National City on them, the bonds were snapped up by American investors.

Some tried to warn against the explosion in such risky financing. “American bankers and firms [are] competing on an almost violent scale for the purpose of obtaining loans in various foreign money markets overseas,” Thomas Lamont observed in 1927 during a meeting at the International Chamber of Commerce in Washington. “That sort of competition tends to insecurity and unsound practice.” The genteel House of Morgan was feeling the pressure from Mitchell.

In January 1928, when National City stock hit $785 a share, Mitchell made a stunning move. He delisted National City from the New York Stock Exchange, choosing instead to have it trade privately on the “curb market,” so named because sales used to be conducted outdoors, on the curb. National City’s stock would be sold only through its own branches and salesmen—and because the shares weren’t traded openly on an exchange, investors who wanted to sell had to go back through the bank or find a private buyer, often at a steep discount.

At the time, Mitchell suggested he made the switch because he feared the volatility of prices on the Exchange floor. Speculators, running amok, were threatening to damage the perception of the bank’s stability, he said. “Banks differ greatly from railroads, industrials and public utilities, whose stocks are traded in regularly on The Exchange,” he said. “As credit institutions, banks might be seriously affected by public quotations in times of financial disturbance.”

Without the Exchange, Mitchell relied on his aggressive sales force to convince the bank’s middle-class customers to become its stockholders as well. By January 1929, the stock had risen to $1,450 a share. By spring, the stock had climbed to nearly $3,000 a share before a five-to-one split; after the split, it was still trading at $585 a share.

Like many other stocks in many other eras, National City had become a phenomenon, exciting but mysterious—and a little scary, too. It only seemed to go up. Was it for real? Could it be trusted?

Two days after the Federal Reserve Board meeting, on February 16, a Saturday, Mitchell’s promise to remain quiet came to an abrupt end. He was irate.

On Saturdays, the New York Stock Exchange was open from 10 a.m. to noon. Volume tended to be light. This Saturday was different. After a week of market breaks, a flood of sell orders had come in overnight on Friday, causing a frenzy at the opening bell. Prices dropped precipitously. It took almost ninety minutes for the market to steady itself. In the meantime, fear—the likes of which traders had not experienced in years—spread across the floor.

Mitchell and all of Wall Street were thinking the same thing: Was this the big one everyone had been predicting?

Charles Merrill, the founder of Merrill Lynch, had been telling his clients to get out of the market since March 1928, worried it was already overheated. In February 1929, he wrote to his partner Eddie Lynch, “Many fine reputations have been built up in this era of extraordinary prosperity, which will not stand the acid test when troublesome times are here.” But Mitchell was far from ready to concede such a thing.

There is usually no credible explanation for what makes the market soar or sink, but in this case, the cause of the rout was clear as the blue sky to Mitchell: It was all the fault of the Federal Reserve Board for taking a stand against Wall Street’s supposedly “wanton” use of borrowed funds. The headline writer at The New York Times, putting together the next day’s edition, stated the situation plainly: “Stocks Break Again as Wall St. Awaits Credit ‘Show-Down.’ ”

The Federal Reserve’s “moral suasion” strategy had clearly had an impact, effectively cutting off the flow of credit to stock buyers. Call money rates rose to a whopping 20 percent before settling back down again. On top of that, Senator Carter Glass of Virginia was practically declaring a war on Wall Street and speculators.

Stock trading “is gambling wit matched against gambling wit,” Glass argued on the Senate floor that week. “It does not contribute a thing to the happiness or the welfare of the country. They buy things they never expect to get, and they sell things they never have. There isn’t a constructive thing in it.”

To Mitchell, this had all the makings of a major crisis, and he had an idea for how to address it.

THREE

FEBRUARY 16, 1929

Later that same afternoon of Saturday, February 16, 1929, the phone rang in William Crapo Durant’s hotel suite in Flint, Michigan. He was staying where he always did when he was back in town, in the eight-story Neo-Georgian building that proudly spelled out its name in gold letters: The Durant.

The front desk put through the call: Charles Mitchell on the line.

It was a cold day in Flint, half a foot of fresh snow on the ground. Durant, a tiny man with a pronounced chin that gave him a hard, determined look, was a titan of the burgeoning automobile industry. But these days, his preoccupation, like everyone else’s, was the stock market. He had become perhaps the nation’s most famous speculator, taking such astounding risks during his career that one friend said of him, “You know, W.C. is never happy unless he is hanging to a windowsill by his fingertips.” So far, he hadn’t fallen off; on the contrary, he had become one of the richest men in America, with a fortune estimated to be at least $100 million.

Durant was surprised to hear from the president of National City Bank on a weekend. The two men were not friends exactly—more like business acquaintances. They got along because they each understood the upside of doing so.

Mitchell, calling from one of the three telephones that sat atop his desk in his office in New York, was agitated, and he knew Durant likely would be, too. Both men had been intently watching the market wobble for the past several weeks and pointed the blame at the same culprit—the Federal Reserve.

The Dow had fallen another 3.5 percent in the past two days, closing at 295.85, down from 306.49.

Mitchell told Durant they needed to do something about the Fed—and quickly. Mitchell described his failed attempts to bring the board around to his way of thinking. Washington and its economists have no idea how the markets work. Their ignorance is going to cause a crash.

Durant had spent the past decade very publicly criticizing the Federal Reserve, concerned that it was constantly trying to manipulate the economy. In his view, it often hindered growth by keeping interest rates too high. “The Federal Reserve Bank at this critical time should encourage, rather than discourage, the extension of credit and should reduce its discount rate to 3 percent. Quick, decisive, courageous action on the part of the Federal Reserve Bank would, in my opinion, very materially improve the situation, would hearten our businessmen and set in motion the wheels of commerce and industry,” he said as far back as 1921. He had made dozens of similar statements since then.

Mitchell was hoping that Durant might have some ideas about how to shift the dynamic in Washington. Usually, Mitchell could call in favors from across Wall Street, as well as marshal support from editors and pundits at the major New York dailies. But he didn’t have much clout in Washington because, up until this point, it had never been necessary.

The two last presidents, Warren G. Harding and Calvin Coolidge, had largely left American business alone. Coolidge in particular saw his job as little more than cutting taxes and spending—and vetoing legislation. He had spent his six years in the White House quietly reading papers at his desk, smoking cigars, making his own sandwiches, and telling people no before they’d even managed to articulate a question. He believed in a government that did as little as absolutely possible, and Wall Street revered him for it. People called his hands-off approach and the resulting boom in stock prices “the Coolidge market,” though not everybody meant it as a compliment. To some it represented an abdication of authority and responsibility, but these critics were in the minority.

With Herbert Hoover’s presidential inauguration taking place on March 4, just weeks away, the Street was on edge. Nobody knew quite what to expect of the new president. Though Hoover had genuine business credentials—before serving as secretary of commerce in the Harding and Coolidge administrations, he had amassed a respectable fortune of his own in gold, zinc, and silver mines—Mitchell did not regard him as particularly knowledgeable about the emerging forms of American enterprise.

Before calling Durant, he had tried Andrew Mellon, Coolidge’s treasury secretary, who was expected to be reappointed to the job by Hoover. Mellon was receptive to Mitchell’s concern, but he demurred from doing anything before Hoover assumed the presidency.

Mitchell had caught Durant in a melancholy mood and his concerns instantly got Durant’s mind racing.

How could he change the Federal Reserve’s perspective? How could he sell them on a different path? Who did he know? What could he say?

When Durant was twenty-four, he started a company in Flint, Michigan, called Durant-Dort Carriage Company, which built spring-suspension road carts. The year was 1886, and the young entrepreneur had a rare gift for understanding the power of consumer behavior and the importance of having a product people instinctively wanted. “Look for a self-seller,” he liked to say. “If you cannot find one, make one.”

At the turn of the century, investors were throwing money at hundreds of new automobile ventures, desperate to own a piece of the future. Along with Detroit, Flint was one of the hotbeds. Durant wasn’t initially sold on the future of the industry. He thought cars were noisy, unreliable, and dangerous, but people couldn’t stop buying them. In 1904, Durant acquired a failing brand called Buick and transformed it. But he didn’t want to just make cars. He wanted to build an empire.

Durant had a deliberate style, a powerful blend of perceptiveness and persuasion. “I cannot hope to find words to express the charm of the man,” Walter Chrysler said of Durant.

Highly unusual for ascendant businessmen, he was also a keen observer of other people’s actions and motives, a listener. “Assume that the man you are talking to knows as much or more than you do,” he said. “Do not talk too much. Give the customer time to think. In other words, let the customer sell himself.”

Durant snapped up dozens of brands and assembled them into a single entity called General Motors. With a deputy named John Raskob, he also created the General Motors Assistance Corporation to supply credit to customers and enable them to spread out their payments. Credit, he realized, would be key to fantastic growth in the car industry. By 1919, GM was a colossus, employing more than eighty-six thousand workers and selling 1.5 million cars a year.

Despite his tremendous success, Durant’s career was never a straight line up. In 1910, after wildly overspending on too many acquisitions, he was pushed out of GM. Almost immediately, he plotted a comeback. He started a rival company with Louis-Joseph Chevrolet, a race car driver. His new endeavor became an overnight sensation and Durant, who was desperate to get back to the top of the industry, finagled a merger with GM, reclaiming the CEO job in 1916. Four years later, he was pushed out again.

In 1921, Durant turned sixty. He was mostly done with the car business, and he started applying the full force of his being to the stock market. He loved the action and worked tirelessly, becoming spectacularly rich. He bought a magnificent seaside villa in Deal, New Jersey, called Raymere, which had thirty-seven rooms and fourteen baths. Flemish tapestries, priceless porcelain, treasures of European and Asian culture, and art objects adorned every inch of the premises. The household required at least ten servants, and another eight or nine to maintain the elaborate grounds. “I had never experienced luxury to compare with Billy Durant’s house,” his friend Chrysler said.

In New York, Durant and his wife, Catherine, rented an apartment on the ninth floor of 907 Fifth Avenue, with a forty-seven-foot-long gallery, a breakfast conservatory, four bedrooms, and a large living room. Durant loved to bestow on “Muddie,” as he called Catherine, gems and pearls from Cartier, Tiffany, and Black, Starr & Frost.

By 1929, Durant was spending most working days in a modest suite of rooms near Columbus Circle in Manhattan, standing at his desk from the opening bell at 10 a.m. to the closing at 3 p.m., carefully following the rise and fall of prices on a ticker tape. A fleet of assistants carried out his orders to buy and sell using twenty-six telephones on a vertical rack that looked like a “banana stand,” each one linked directly to a broker’s office. He organized so-called pools with other wealthy industrialists, including the legendary Fisher brothers, who made their fortune by building bodies for GM cars. Like a financial Pied Piper, Durant took great satisfaction in luring small-time speculators into the swirl of his elaborate market schemes.

Durant’s favorite gambit was to quietly run up the price of a stock, creating an overvaluation that attracted short sellers, and then turn up the heat by buying every share the short sellers dumped on the market. The stock would move higher and higher, “squeezing” the original shorts, who had to frantically cover the shortfall, while new ones jumped in, betting that stock would eventually have to obey the laws of gravity. But as an oft-repeated quote attributed to John Maynard Keynes (which was likely apocryphal) described, “Markets can stay irrational longer than you can stay solvent,” particularly when that irrationality is the handiwork of a super-skilled, deep-pocketed stock manipulator.

Durant was also on the cutting edge of what had become a fad among insiders on Wall Street in the mid-1920s, the “stock pool.” It typically worked like this: A group of investors would combine their resources to covertly buy up shares in a given company. They would do this over a period of weeks, careful not to draw too much attention to their activities. Then, with the aid of a market insider—often the very man on the floor who specialized in trading that company—they would commence a series of trades with themselves to artificially lift the price of the stock. Gullible investors would notice the upward momentum of the shares and jump in on the trade. They were not necessarily ignorant or dumb. They might know, or guess, that an investment pool was manipulating the price. But if they got the timing right, even a total outsider could capture a bit of the upside before the pool “pulled the plug” and dumped its shares back on the market.

Though investment pools were patently underhanded and deceptive, they weren’t illegal, and the biggest names and institutions on Wall Street, including National City and J.P. Morgan, all participated in them. This was the privilege of power. The lure of easy profits was simply too great. It was just a question of how much they could get away with.

If the markets were a battle of wits among investors, pools were considered just another way to outsmart other clever—and not-so-clever—investors.

Like many pool investors, Durant never viewed himself as a villain. Durant played the game to win, and if others lost money, he did not consider himself responsible for their naïveté. Through his network of allies and co-conspirators, Durant was estimated to control more than $1 billion in buying power; some placed the figure at four times that amount. He was regarded with awe, a swashbuckler who turned paper into gold.

Like Mitchell, Durant was frustrated with the state of the market. Call money—that is, the money banks loaned to one another overnight that could be “called” back at a moment’s notice—had jumped 3.5 percent in the last two days. It now stood at an almost untenable 10 percent and stocks had started to stagger in response.

That afternoon, when Mitchell got Durant on the phone, he made an emphatic case for how they needed to respond. Someone had to warn Hoover that “the Fed’s killing the goose which laid the golden egg,” Mitchell said.

Could Durant do it? Did he have the access?

Durant had been invited to Hoover’s inauguration in Washington, which was taking place in just over two weeks. He still wasn’t sure whether he would be going, but he had confidence that he had a path to the president.

“I’ll do what I can,” he assured Mitchell. “I’m sure there’s a way we can get to Hoover.”

FOUR

MARCH 4, 1929

On the day he was to be inaugurated as the thirty-first president of the United States, Herbert Hoover woke early at his family’s handsome redbrick mansion on S Street in Washington’s fashionable Kalorama neighborhood. The Hoovers had lived there for eight years, ever since the Californian had been sworn in as Warren G. Harding’s secretary of commerce.

It was Monday, March 4, a wet, overcast morning. By 7 a.m. Hoover was dressed casually and at the desk in his private study, taking a quick look through the newspapers before the festivities were set to begin. It was going to be a long day, ending with the inaugural ball at the Mayflower Hotel, which he knew was likely to last past midnight. The celebratory response by the press to his election had been gratifying, if not surprising. By one count more than three quarters of the nation’s nine hundred newspapers had endorsed him for president. Hoover was taking office “at the moment when the strength and prosperity of his own country never stood higher. All the auguries are good for the Presidency which begins today,” The Times of London proclaimed.

As he mentally rehearsed his inauguration speech, he felt as confident as any incoming president probably ever had, and with good reason. At fifty-four, with pronounced jowls and thinning gray hair that he wore neatly combed back, Hoover had been tantalizingly close to power for the past eight years as secretary of commerce under both Harding and Coolidge—and now the presidency was his. Pitching himself as a substantive candidate with little patience for politics, the staunch Republican had defeated his Democratic opponent, the savvy New York politician Al Smith, in a landslide, amassing 58.2 percent of the popular vote, along with forty of the forty-eight states.

One thing was certain: Calvin Coolidge’s style of governance—taciturn, aloof, and minimal—was about to be retired, and the United States of America would get a chance to see what a president imbued with optimism, ideas, and energy could accomplish at a time when the rest of the nation seemed overflowing with them.

Just before 8 a.m. Hoover had his usual breakfast of ham and eggs with coffee. He normally hated eating alone, but not on this day. He was particularly enthused—even a bit bemused—by the positive reception he was getting from Wall Street, which he knew was skeptical of his view that the national economy ought to be managed rather than simply left to its own devices. “Wall Street’s Hoover Boom is starting,” wrote the syndicated columnist Arthur Brisbane on the eve of Hoover’s swearing-in. “Heaven pity the poor bear, if any bear still survives.” After a brief swoon in mid-February, the Dow had jumped 8 percent to 319.

Bertie Charles Forbes echoed the sentiment that morning: “Isn’t this kind of funny? You will recall that all the newspapers told you before the presidential nomination that Wall Street didn’t want Hoover. Now Hoover’s inauguration is hailed by Wall Street as calling for a wild demonstration of bullish exuberance!”

No matter what they were saying in public, Hoover was well aware that New York bankers had reservations about him. Like them, he was immensely wealthy, having been a successful mining investor—so successful that he would become the first president in history to donate his salary to charity. But he was also an engineer and believed the economy could be operated like a machine, something that made Wall Street nervous. He had done his best to put their minds at ease: His decision to reappoint Andrew Mellon as secretary of treasury was seen as an obvious concession to business leaders. Hoover’s predecessor Coolidge had so relied on Mellon’s judgment that he had had a private telephone line installed to link their offices. The two men believed in protecting the wealth of the nation above all else.

But Mellon was not, in fact, universally popular. With his close ties to Northern industry, he had more than his share of detractors in the Senate, particularly representatives from rural states. Just a day earlier, Senator Kenneth McKellar, Democrat from Tennessee, said he would vote against Mellon’s confirmation, calling him an “unfaithful public servant.” Hoover, though concerned about expending political capital on a messy confirmation fight, had decided that since Mellon already held the position, the Senate would push him through.

The son of a wealthy Pittsburgh judge who founded a private bank, Mellon had taken over management of his father’s enterprise at the age of twenty-seven, investing heavily in such cutting-edge industries as aluminum and oil. After amassing one of the great industrial fortunes in American history, Mellon became involved in politics in the ramp-up to the 1920 election. Somewhat reluctant to enter government himself, he had been persuaded to do so by powerful friends who believed he would lend gravitas to the lightweight Warren G. Harding administration. He was so tied into American business that upon agreeing to serve as secretary of the treasury, Mellon had been compelled to resign from directorships in at least fifty-one corporations.

Though Mellon was not an admirer of Wall Street—he believed, as many industrialists of his generation did, that the stock market was a haven for speculators, not legitimate businessmen—he did not consider it Washington’s responsibility to officiate over or interfere in the essentially private matters of buying and selling. If Americans wanted to gamble, they should be allowed to do so without Uncle Sam sticking his nose in their affairs.

When Harding died of a stroke in 1923, at the age of fifty-seven, and Vice President Coolidge succeeded him, Mellon stayed on at Treasury, just as Hoover did at Commerce. Coolidge never cared much for Hoover’s opinions, once telling an aide that Hoover was “too much inclined to have his own solution of problems, frequently unsound,” a view that Mellon appeared to share.

During his eight years in Washington, Mellon had distinguished himself as the most resolute, unwavering advocate in government that American business had ever had. On his watch, the tax rate on capital gains, which had previously been the same rate as regular income, was lowered. This was a boon to Wall Street. Mellon was hailed as “the greatest Secretary of the Treasury since Alexander Hamilton” by the likes of Durant, Owen Young of General Electric, and Senator Reed Owen Smoot of Utah.

Mellon is “a symbol of prosperity,” wrote Collier’s. “On him the hopes of the conservative big business interests of the country converge.” Hoover, the article noted, was “almost compelled to retain Mr. Mellon.”

With his presidency coinciding with the roaring twenties, Coolidge—and his treasury secretary—remained popular among business interests through his second term. Hoover, though a loyal Republican, did not get the same warm embrace from business and Wall Street—and that included Andrew Mellon. One Rhode Island official had told journalist Clarence Barron that a possible Hoover win was alarming. “They do not want this country put in charge of an engineer with a pencil and pad before him. You cannot run a government that way.” Mellon had made no secret of his desire to see Coolidge run again in 1928. “I was of course sitting with him in the Cabinet twice a week,” Hoover later wrote. “I was aware he was constantly pressing the President [Coolidge] to run again and assuring his friends that his acceptance was a certainty.”

But when Coolidge surprised everybody by declining to stand for reelection, Hoover had his opening. Although he personally didn’t like Mellon—the treasury secretary had supported Al Smith until late in the election cycle—and would have preferred to bring in a fresh face at Treasury, Hoover recognized the value of keeping him on. Removing Mellon risked alienating many powerful people whose support he would need.

Thus it was that on January 8, 1929, the incoming president had invited Mellon to a lunch meeting at the Mayflower, where he had booked a suite to hold a series of private meetings. The treasury secretary arrived shortly before 1 p.m. and then, at about 2:30 p.m., slipped out the rear door of the Hoover suite to a back elevator and out of the hotel, avoiding the waiting reporters. He had agreed to become the first treasury secretary to serve three presidents.

By 10 a.m. on Inauguration Day, Hoover repaired to his bedroom to get dressed. The stock market, which had dipped at the day’s opening, began a strong midday surge ahead of his speech. Kosta Boris, Hoover’s Serbian valet, helped him into his formal morning clothes, with a high, stiff collar and a cravat. Hoover combed his hair, parting it just slightly to the left of center.

Hoover knew he would be changing clothes several times that day—once for the inauguration and at least one more time for the ball, which was black-tie. But even so, he knew Washington’s dress code would not be nearly as formal as the white-tie and costume balls taking place in Palm Beach, Florida, that week, where most of Hoover’s wealthiest donors had gone to escape the miserable Northeast weather—and to attend a party in honor of Al Smith, as well as one at Mar-a-Lago, the home of American financier E. F. Hutton.

Hoover returned downstairs, where his beaming wife, Lou, waited, swathed in a stylish deep-plum dress and matching cloche hat. The plan was for the Hoovers to have a private visit with Calvin and Grace Coolidge, after which the couples would proceed together to the Capitol for the swearing-in. At about 10:45 a.m., Senator George Moses of New Hampshire arrived to accompany the Hoovers on the short drive to the White House in an open-topped car. “I suppose you have read the papers, and if so you know you are the next president of the United States,” Moses joked as he grasped Hoover’s hand. “You’ve been tagged. You’re it.”

The morning was cool and misty. At the White House, they were ushered into the Blue Room to join Vice President–elect Charles Curtis and a handful of dignitaries.

The Hoovers waited. And waited. President Coolidge had yet to dress and was wandering through the White House rooms that had been his home for six years. The always-charming Grace Coolidge arrived and did her best to cover for her husband’s tardiness.

When he finally appeared in the Blue Room, about forty-five minutes after the Hoovers’ arrival, Coolidge’s mood seemed even darker than usual. He offered no small talk or ceremonial statement but merely greeted his guests with a brusque gesture and barked: “Time to go!”

As commerce secretary, Hoover had always had an uneasy relationship with his former boss. At one point Hoover seemed to be Coolidge’s preferred successor but when a rumor went around that Hoover was being considered for promotion to secretary of state—a rumor Coolidge assumed had been started by Hoover himself—Coolidge quashed it. Their relationship never recovered.

Coolidge’s personality was off-putting—gruff and often cryptic in responding to questions or making decisions. The peculiar way he handled his decision not to run for reelection was one such example: He wrote his enigmatic statement—“I do not choose to run for President in 1928”—on a piece of paper and handed it to his personal secretary to deliver to the world. Coolidge never saw fit to explain himself further. Grace, for her part, said to several friends of her husband’s decision to retire: “Poppa says there’s a depression coming.”

In February 1928, with the Ohio primary approaching, prominent state Republicans began pressing Hoover to declare his candidacy. He went to Coolidge to secure his blessing. After confirming that the president had not suddenly reconsidered his own decision not to run, Hoover asked if he might put his own name forward. “Why not?” replied the president.

It was hardly a ringing endorsement. “That man has offered me unsolicited advice for six years,” Coolidge later complained privately about his commerce secretary. “All of it bad.” But there was also a whiff of envy in his grievances against Hoover, who had been lauded worldwide for his humanitarian efforts to feed starving Belgians after the Great War, his organization of rescue efforts during the Great Mississippi Flood, and his proclivity to attend to government business instead of napping for up to four hours a day, as Coolidge was inclined to do.

Coolidge’s dislike of Hoover had only intensified once Hoover became a candidate and he made no effort to assist his cabinet secretary in his pursuit of the Republican nomination. On the day Hoover won the nomination, a bitter Coolidge ordered a bottle of Green River whiskey from the White House cabinet of spirits and disappeared into his private room.

The period between the election and the inauguration in early March was a long four months. Coolidge took almost no action on the most pressing issues on the presidential desk during this period as a lame duck, effectively delegating them to his successor. As he joked to his closest allies, “We’ll leave it for the Great Engineer.” The only advice Coolidge offered Hoover of any value was a bit odd. “You have to stand every day three or four hours of visitors,” Coolidge told him. “Nine tenths of them want something they ought not to have. If you keep dead still, they will run down in three or four minutes. If you even cough or smile they will start up all over again.”

Led by a cavalry escort, Coolidge and Hoover sat together in the back seat of a black automobile, a blanket draped over their knees to keep the chill off. They exchanged not a word. “I would have given much to be able to sketch their countenances,” observed Senator Hiram Johnson of California. “Every lineament was sour and disgruntled, and no human expression once illuminated those stony faces.” Their wives followed in a separate car, heads together, smiling. Grace and Lou, who had known each other for years, were more than happy to chat away.

Coolidge’s mood seemed to lift as the crowds cheered the man who had presided over unprecedented prosperity, and he frequently raised his silk top hat in acknowledgment. At the Capitol a large, covered pavilion, painted white and supported by classical columns, had been erected. Among the dignitaries invited to take seats on the platform was Hoover’s grade-school teacher from West Branch, Iowa, who had once sought to adopt him after he lost his father at six and his mother at nine.

The sprinkles of rain were developing into a steady drizzle. The crowd in the area around the Capitol was estimated to be in the tens of thousands, along with several motion picture crews, which were filming the presidential inauguration for the first time. When they left their car, Grace and Lou wandered off, missing the swearing-in of the new vice president altogether while they toured Capitol galleries and discussed Lou’s new responsibilities as first lady.

An irritated Hoover sent someone to look for them, but it was not until Grace heard the band strike up the first notes of “Hail to the Chief” that she seized Lou by the arm and they dashed toward the platform. At 1:07 p.m. the black-robed, walrus-mustachioed William Howard Taft, chief justice of the Supreme Court and a former president himself, ascended the platform and presided over Hoover’s oath of office.

Then Coolidge surprised everyone by turning to Hoover, shaking his hand, and beaming a warm smile. The spontaneous gesture triggered applause that grew as it spread through the crowd. When the new president stepped forward to address the nation, a speech that was broadcast live around the world on radio, also for the first time, the heavens opened.

Hoover mopped rain from his face, took his place in front of the podium under an umbrella, and spoke, barely looking up from the manuscript he had labored over for weeks. “There is nothing of the fire-eater about him,” one campaign reporter dryly observed of his oratory style. “There are no climaxes, no flights of eloquence, no biting sarcasm, no flattery, no extravagant compliments.”

In person this approach could come across as lackluster, but over the radio, the crispness of Hoover’s diction proved to be a major asset. An estimated sixty-three million listeners tuned in to his inaugural address. Hoover was the first major politician to understand that he was speaking to a far larger audience than the one assembled before him. In that regard he was the first president to recognize the awesome power of the mass market. He held forth for twenty-nine minutes, promising rigorous enforcement of the Eighteenth Amendment (Prohibition), extolling the virtues of world peace and the recent agreement among the developed nations of the world to outlaw war, and calling on Congress to help embattled farmers and to enact a modest program of tariffs to protect American industry. There was not a single word about the runaway stock market or the need to rein in speculation. If these were to be priorities of the new administration, he was keeping them under wraps for now.

Hoover closed his speech with a triumphant message. “Ours is a land rich in resources; stimulating in its glorious beauty; filled with millions of happy homes; blessed with comfort and opportunity,” he said. “In no nation are the institutions of progress more advanced. In no nation are the fruits of accomplishment more secure…I have no fears for the future of our country. It is bright with hope.”

FIVE

MARCH 5, 1929

The day after Hoover’s inauguration, the Wall Street trader Jesse Livermore assembled a small group of reporters in his office on the eighteenth floor of the Heckscher Building, at the corner of Fifth Avenue and Fifty-Seventh Street. The man once called the “Boy Plunger”—“plunger” being Wall Street lingo for a reckless speculator—was fifty-one years old, but looked a decade younger, still whippet-thin with just a few streaks of gray in his blond hair.

It had been a long while since Livermore had cozied up to journalists like this, and they were curious about why they had been summoned. What was he going to tell them? Did he have a message about Hoover? Or Mellon? Or the Fed?

Years earlier Livermore had been a ubiquitous presence in newspapers and magazines, burnishing the myth of his innate brilliance as a speculator in stocks and commodities, notorious for betting against certain stocks—short selling. He understood how to use the press to his benefit, planting stories and issuing elaborate denials to provocative questions no one had asked. He’d graced the cover of Time and had his life story lightly fictionalized in the wildly popular 1923 novel Reminiscences of a Stock Operator. Stock market novices and old hands alike snapped the book up, hoping to glean sage advice for making easy money. The first tip Livermore gave everyone was “Beware of stock tips.”

An icon of his time, Livermore had made and squandered several fortunes. In everything he did, the press had been his all-too-willing co-conspirator. He was a celebrity, a rarity on Wall Street, an object of fascination, envy, and suspicion. People craved more than just his trading secrets. They wanted to know about his wives and children and houses and cars, his dining companions, his travel destinations, the whole spectacular life of a man at the top.

But Livermore’s notoriety came with a price. In 1923 it all got to be too much, and he moved his office away from the madhouse of Wall Street to a quieter, discreet location in Midtown, where he spent a half million dollars building the headquarters of his dreams. And he conducted his private life more privately than he had before.

The chosen members of the Wall Street press invited to his office that day could hardly believe their luck. They had heard rumors about Livermore’s mysterious sanctum, but few outsiders had ever been admitted. The building’s doorman was under strict orders to deny that Livermore’s workplace even existed.

Passing through the lobby, the reporters were ushered into a private elevator that opened at the penthouse, Livermore’s floor, where Harry Edgar Dache, his brawny, intimidating personal aide, greeted them. Dache was a former merchant marine who spoke six languages and served Livermore not only at the office but also when he traveled, enthralling Livermore’s two young sons with stories of his adventures on the high seas.

The reporters stared in awe at the large room’s polished mahogany paneling, the luxurious leather lounge chairs surrounding a huge conference table, and the enormous medieval doors that extended all the way up to the ceiling. The room had the ambiance of a gentlemen’s club, but it was all business. The office had eighty phone lines, sixty telegraph machines, and forty stock tickers quietly clattering under glass domes.

Livermore’s private office was behind a closed door, where he had three dedicated phone lines on his huge desk, one connected to the stock market in London, one to Paris, and one to the commodities exchange in Chicago. The rest of his workspace was pristine: only in and out baskets, a pad, and a pencil. Everything else he retained in his head. Through a plate-glass window, he could gaze out to the exterior room and watch the changing prices on the big board.

Livermore gave the reporters time to take in the grandeur of the space, then emerged from his quarters, carrying his small frame with buoyancy. Flashing a smile, he turned to face a wall-length chalkboard next to a catwalk, on which a half dozen “markers”—clerks hooked up to telephone headsets—updated the latest stock prices.

The invention of stock tickers in 1867 not only gave Americans across the country wider access to Wall Street’s capital markets but provided the Street with the means to lure new customers (and potentially take advantage of them). Stock prices were now popular knowledge, and people began to develop their own theories—some wise, most not—about what caused them to rise and fall. Stocks didn’t just move based on profits and losses; it was often about the behavioral psychology of crowds. As Livermore was fond of saying, “The game taught me the game.”

Livermore was consumed by the ticker—he had one in every home he owned—and kept the thin paper strip that fed from it running through his fingers throughout the day, regardless of what else he was doing. He studied the numbers with the intensity of a scientist, as if he were trying to solve an eternal mystery.

Because the prices on the ticker were, even on light trading days, at least fifteen minutes behind the market, Livermore needed more immediate information whenever he made a big investment in a particular stock or commodity. So he hired personal agents on the floors of various exchanges to call in up-to-the-second prices to his markers, which gave him a powerful edge over other speculators.

After several minutes of chatting with the reporters, Livermore handed them a statement on the coming surge in cotton prices.

“In my opinion it would be very easy for cotton to duplicate what we have experienced in the copper market for the last six months,” the document read. “Once the speculative public realizes the future possibilities for profit that lie ahead in the next few months in the cotton market, the consumers of cotton will have to contend with the active competition of the public in acquiring cotton for their future needs.”

The man who once decisively recommended that investors pay no attention to the stock tips of other investors but attend only to the reality of the numbers was now offering a tip? Even the most steadfast Livermore followers raised their eyebrows.

In its coverage of the meeting on the following day, the New York Herald Tribune noted:

“Mr. Livermore conversed freely with reporters about the commodities markets, but on the subject of the stock market, he had nothing to say. It is common knowledge in Wall Street that he has confined his operations to commodities, to the neglect of his first speculative love—stocks.”

The Herald Tribune dutifully pointed out that Livermore had “called the turn” in the explosive wheat market in 1924, when the price rose almost $1 a bushel. He had done the same for the cotton market in 1923, as well as for the coffee market during the war.

There’s not much doubt what Livermore was hoping to accomplish. By making a public bullish statement about cotton, he was hoping that investors would rush into the commodity, causing its price to rise and giving him a big gain. But while his cotton bet was all well and good, it wasn’t what the Street cared about. What about that first love? In this raging bull market—the Dow was at 313 that day—what would Jesse Livermore’s uncanny instincts reveal about the stock market? That was what traders wanted to know.

Unlike the Harvard and Yale graduates who occupied the desks at the House of Morgan and other silk-stocking firms, Livermore was self-educated. Born in 1877 on a farm in Shrewsbury, Massachusetts, he left home at the age of fourteen when his father told him it was time to quit school and get behind a plow. With $5 in a pocket of his new suit, contributed by his doting mother, Livermore hitched a ride in a wagon to Boston and got a job working as a “board boy” at Paine Webber, where he posted prices on a board. His work introduced him to bucket shops—and it was there that he found his true calling.

Bucket shops, run by organized crime bosses, did not traffic in real stocks—they merely used the information from real stocks to offer bets, as if they were baseball scores or a horse race. Do you think General Electric is going up or down? Place your bets! As with all gambling establishments, the action was heavily tilted against customers.

Between his work at Paine Webber and speculating at the bucket shops, Livermore developed his own insights about how markets shifted, becoming so good at anticipating moves up and down that local bucket shop bosses eventually banned him. So he headed west to St. Louis, where it took less than a week for bucket-shop proprietors there to recognize him as Jesse Livermore, Boy Plunger. At that point, there was no place left to go but the big leagues, the real game, Wall Street itself.

Livermore called the moment he became a true trader his “spooky story.” In the spring of 1906 he and a friend, also a trader, were relaxing in Atlantic City, New Jersey, ostensibly on vacation from the market. Restless, they strolled into the local branch of E. F. Hutton, unable to go even hours without keeping up with the ticker. “See, strong market, just like I said it would be,” his friend said. “Buy something, J.L.”

At age twenty-nine, Livermore had an account with Hutton and enough money for a $400,000 position. The ticker tape ran through Livermore’s fingers; entranced, he watched the symbols and numbers slip by, seeming to send him a message. Was it a product of his unconscious mind? A premonition? Livermore approached the brokerage assistant and told him, “Sell a thousand Union Pacific short.”

“J.L., why are you putting out a short line?” his friend asked. “The market’s going up!”

Livermore was violating what had been one of his core trading principles—never go against the market. “I don’t know why, exactly,” Livermore answered. “I just think it’s the right thing to do.”

“You know something, don’t you?” his friend said. “I know you never do anything without a reason. In fact, you told me that anyone who trades without a plan, a consistent plan, is a fool. Now you tell me you have no reason to sell UP short. You’re breaking your own rules, for Christ’s sake.”

Livermore didn’t respond but went back to the clerk and told him to short another thousand shares of Union Pacific. His friend tried to lead him out of the office. “You’ve gone crazy,” he said. “Three days of lying in the sun, taking in the ocean air and you’re having a mental breakdown.”

Livermore replied by shorting another thousand shares.

With the three order slips in Livermore’s pocket, the two men left the brokerage. That afternoon they checked the tape. UP’s stock had risen two points. “See, J.L.,” his friend crowed, “I told you—the market’s up, and you lost six thousand dollars for your foolishness.”

The next day Livermore returned to the broker’s office and shorted another two thousand shares of Union Pacific. By now his margin borrowing exceeded $400,000, so if he bet wrong, he’d be wiped out. He returned to New York and woke up the following morning to read the newspaper headlines about the devastating earthquake in San Francisco. The market began to fall, and as the earthquake crisis turned into the Panic of 1907, Livermore kept shorting the market, riding the streak. On October 24, 1907, a date he would never forget, he made $1 million in a single day.

Livermore’s instinct was to keep the pressure on. He was now a big player, and recognized as one by the Street. The market was falling so hard and so fast that people worried about its survival. A friend, acting as a proxy for J. Pierpont Morgan, advised Livermore that it was time to stop because he was causing too much damage. For probably the first time in his life, Livermore recognized an authority greater than his own instincts. He covered his shorts, and as the market stabilized, he began to buy as the market rallied. When the Panic of 1907 was finally over, he had $3 million in cash. He would later tell his two sons that J. Pierpont Morgan’s asking him a favor was one of the most significant moments of his life. He was a plunger no more but a true speculator.

Over the next few years Livermore spent millions on wives, cars, and houses. Nothing was ever enough. Only the market could give him the feeling of self-worth that he craved, and the market was a fickle mistress. He suffered debilitating losing streaks. When investors piled into the market following the 1921 mini-crash and stocks went on their unbroken ascent, Livermore didn’t follow them, to his financial detriment. He knew better than anyone how patently delusional it was to believe that good times could last forever, and he could not bring himself to believe in the current boom. At various points in 1925 and 1927, he had gone bearish on stocks, only to hastily unwind his short positions when the market refused to buckle.

To understand the market, Livermore studied human nature, reading Freud, Jung, and Aristotle, contemplating the mystery of the unconscious mind. His method didn’t lend itself to easy explanation, and even he seemed unsure of how to make sense of it.

“Anticipation of coming events is the whole thing,” he once told an interviewer. “When I have my mind made up about this, I wait for the psychological moment.”

Though Livermore preferred to play lone wolf, he and William Durant had joined forces in a few audacious pools. His share was estimated to total $20 million, which bought a lot of the luxuries he indulged in, including a yacht or two that he docked in Palm Beach.

Livermore’s good friend and fellow speculator Bernard Baruch also frequented Palm Beach. Born in South Carolina in 1870, Baruch was the son of a Confederate Army surgeon. His Jewish family left the restrictive postwar South for New York City. He graduated from City College of New York and went straight to Wall Street, joining the brokerage firm of A. A. Housman & Co. Within a few years he scored a major triumph by shorting the stock of American Sugar Refining, which netted him a profit of over $60,000. With the proceeds, he bought a seat on the Exchange and started his own firm, becoming known as a ruthless bear raider—again, a short-selling specialist.

Unlike Livermore, Baruch banked his winnings and made a bid for respectability. He wanted to be taken seriously in the world. As his fortune grew, he began a career of public service under Woodrow Wilson, who appointed him to the powerful War Industries Board, where he played a key role in the nation’s economic mobilization during World War I. With a thick coif of white hair and standing six foot five, Baruch was a dashing figure who—like Livermore—loved to chase beautiful women.

When the two men encountered each other in Palm Beach one winter day in 1929 as the market continued to climb, Baruch admitted he was wary. Perhaps it was time to sell out his positions and go hunting at his plantation in South Carolina, far from the brokerage houses and telephones. “J.L.,” Baruch told his friend, “looks like it’s time to go grouse shooting.”

On Sunday, March 24, 1929, Livermore, like everyone else on Wall Street, was waiting to hear what the Federal Reserve Board had been meeting about over the weekend and whether it would make a statement about the market. Since the beginning of the year, the Dow had risen as much as 7.3 percent but had fallen back down amid the Fed’s effort to put a damper on speculation. The Dow was up just 2 percent for the year. The market was more erratic; it seemed jittery, which made traders jittery.

That same day, The New York Times ran a story that, to skeptics like Livermore, signaled a market top. The article was titled “The Magnet of Dancing Stock Prices” and it stated plainly, “The people who know least about the stock market have made the most money out of it in the last few months. Fools who rushed in where wise men feared to tread ran up high gains. Even such a veteran of market campaigns as Charles M. Schwab has declared that probably the old-timers, who usually play the market by note, are behind the times and wrong, and that the new crop of speculators who play entirely by ear are right and that a new speculative era has dawned.”

Livermore was always looking for signs that the wisdom of crowds had become witless. He strongly believed in the curse of consensus—and here it was.

The past five years of an almost constantly rising stock market had made the life of a short seller like Livermore feel almost impossible—so much so that the newspapers were describing him as in “practical retirement.” It seemed almost too dangerous to bet against a market that was levitating. Even his bullish cotton trade and promotion in the newspapers weeks earlier hadn’t worked: “The fact of the matter is Mr. Livermore’s campaign to attract a huge following with frantic buying, was a comparative failure. He never had the following he anticipated, and there was nothing approaching frenzied speculative buying,” a newspaperman wrote.

The next morning, Monday, March 25, as his driver chauffeured him into the city from his home in Kings Point on the Great Neck peninsula, Livermore’s mind was spinning. He saw an opportunity. He could feel it. He was convinced the stock market was about to tank.

With an hour and a half before the market was set to open, Livermore’s traders, some twenty of them, were summoned into his office, where they packed into his inner chamber. He’d been mulling over a potential strategy for this very moment for the past two weeks. Now was the time to execute.

“Go, go, go!” Livermore said. That was all they needed to hear as they raced to their posts.

When the market opened at 10 a.m. with the bell sounding on the floor of the New York Stock Exchange, Livermore’s traders swung into action, grabbing phones to brokers, buying and selling shares of designated stocks—all meant to distract away from his bigger plan: Other members of his team were quietly launching a massive short assault.

By the end of the day, they had shorted $150 million worth of shares. Against his stockpile of $7 million, Livermore had maximized his margin to its absolute limit. He had bet it all on his instincts. If the market rose, he’d be wiped out.

Sure enough, the next day stock prices fell almost vertically. At 2 p.m., Livermore reconvened his team. They had one hour to buy everything back.

It was a perfect plan, perfectly executed. In less than twenty-eight hours Livermore’s strategy had made a profit of $8 million.

And he’d only just begun.

SIX

MARCH 26, 1929

Charles Mitchell was back at his office in New York by the last week of March after attending a series of parties with his wife in Palm Beach. Between canapés and champagne, virtually every conversation found its way back to the stock market, as if Palm Beach had become the Wall Street of the South. Would the Federal Reserve put a stop to the speculation?

William Fox, the entertainment mogul, had announced that week that his Fox Film Corporation would stop producing silent movies and had invested as much as $15 million in new equipment to make “talkies.” He had managed to sign exclusive deals with Broadway stars like Will Rogers. While this announcement stirred fear among the New York acting community that the new films would spell an end to theater, the Palm Beach party circuit wondered whether this represented an investment opportunity.

But on Tuesday, March 26, as the Fed met again about whether to raise interest rates, which would serve as yet another attempt to put a damper on the stock market, an unease raced through the market. The Dow had already fallen 5 percent since Hoover had been inaugurated and the last couple of weeks had been choppy. That morning a record number of shares changed hands—it would eclipse 8 million by the end of the day, beating all previous records.

From his desk Mitchell watched the carnage with mounting apprehension. As the ticker, unable to keep up with the unusual volume, fell behind, investors frantically dumped stocks. (Ironically, the prior day the New York Stock Exchange decided to reappoint E. H. H. Simmons as its president with the task of overseeing the installation of a new ticker technology to alleviate exactly this problem. But that didn’t stop the day’s carnage.)

By 1:50 p.m. the market appeared to be headed toward a historic disaster. It felt like an earthquake. Banks began raising their rates on brokers’ loans. Brokers frantically sent telegrams to their customers threatening to close out their accounts if they couldn’t provide cash to cover more of their margin debt.

The rapidity of the sell-off was surprising. Just a day earlier Mitchell had taken part in a New York Fed board meeting, where there had been some anxiety about bank lending and volatility in the market. But for the most part, the meeting had been routine—so much so that the board spent time debating and voting to rent “the sixth floor of this building for five or six months at a rental of $8,333.33 per month” to American Telephone & Telegraph Company. Just weeks earlier it had turned down an offer from Goldman Sachs for the same space “during the construction of their new building.” Given the Fed’s policy of “not renting space in this building to financial institutions we had advised our real estate agent that we would not be interested in renting the said space to Goldman, Sachs & Company,” the minutes reflected.

Now, looking at the numbers from the floor, Mitchell was having flashes of 1907. Money was becoming inaccessible: The call rate had leaped from 15 percent to 17 percent, then to 20 percent. In turn, stocks fell like dominos: General Electric off 7, Anaconda Copper down 13.

“A landslide of selling during the first four hours of trading drove most of the active issues to new low ground for the year,” the Associated Press reported, giving “the market a shock that sent it through the most violent contortion in its history.”

By now Mitchell had given up on Federal Reserve policy as a way to stabilize Wall Street. His efforts on that front had failed. He had played by their rules, remained silent despite his growing discontent, and their solutions hadn’t worked. The Federal Reserve Board in Washington wasn’t going to help—its dictates were only making things worse. There was no higher authority that he could depend on.

Mitchell, who had a buzzer on his desk so he could summon his secretary, an “office boy,” and his stenographer, had a bold new thought: To stop the market from eating itself alive, he would have to wield the power of his own institution. National City would have to step into the breach and aggressively lend money to stock investors, big and small.

George Harrison, the governor of the New York Fed, called Mitchell that afternoon to get his assessment of the situation. Mitchell explained his plan. Harrison made sure that Mitchell understood that the Fed wasn’t going to take any measures against him. Especially in a “panicky” moment, Harrison told him, the Fed “could not be in the position of arbitrarily refusing loans on eligible paper” from banks. He privately assured Mitchell that he could go ahead and make loans to customers; the Fed would continue to provide National City with funding if it needed it.

Rumors about Mitchell’s gambit started to spread. The market, which The Boston Globe described as having experienced “the most tragic and demoralizing stock market day in recent years,” all of a sudden started to reverse itself, moving higher.

“From the nadir of despair the emotions of the financial district moved up to a level of hopefulness for the future, a change wrought by the puzzling development in the market in the afternoon,” wrote the New York Herald Tribune, calling March 26 a day to be long remembered on Wall Street. “Swiftly word passed around brokerage house circles that the hand of the most powerful and famous of banking houses was responsible for the buying support that was tendered to the demoralized market.”

A young financial reporter for the Herald Tribune, Elliott V. Bell, spent the afternoon trying to get a meeting with Mitchell at his office, hoping to get his perspective on the market volatility. It was about 5 p.m. and Mitchell’s secretary tried again to shoo him away, telling him that Mitchell was busy and it was a “waste” of time to wait. But wait Bell did, and about an hour and a half later, “Mr. Mitchell sent out word that he was free” and would see Bell.

Inside Mitchell’s office, Bell asked why many bankers were blaming the Federal Reserve for causing the market gyrations. So many of them were describing the Fed as “conspiring to bring on a panic.” What exactly did they mean by that?

That was when Mitchell decided to make his plan public: National City Bank would try to end that panic by providing loans as necessary, no questions asked—exactly what the Fed board in Washington had publicly warned against.

“So far as this institution is concerned,” Mitchell told Bell, “we feel that we have an obligation which is paramount to any Federal Reserve warning, or anything else, to avert, so far as lies within our power, any dangerous crisis in the money market. While we are averse to resorting to rediscounting for the purpose of making a profit in the call market, we certainly would not stand by and see a situation arise where money becomes impossible to secure at any price.”

Bell wrote it all down the moment he got outside Mitchell’s door, knowing that it was “dynamite in a sentence.”

And it was. The moment Mitchell’s quote found its way into the New York Herald Tribune, the panic subsided and the speculators returned. Single-handedly, Mitchell had turned the tide. In the view of the Street, Mitchell had become an overnight hero, on par with the legendary J. Pierpont Morgan rescues of yesteryear.

The Federal Reserve Board in Washington held a two-hour meeting but maintained its silence, thus seemingly conceding to Mitchell’s power. The fear dissipated. The price for call money dipped from 20 to 15 percent.

Mitchell claimed that the price for a loan had become so high that his actions were a necessity.

“Such a situation, for instance, as 15 percent being bid for $30,000,000 of loans and no money available, simply cannot be allowed to exist,” Mitchell told the newspapers. “That is the sort of thing that would cause a real chill.”

In the bank’s newsletter a few days later, Mitchell wrote, “The National City Bank fully recognizes the dangers of over speculation and endorses the desire of the Federal Reserve authorities to restrain excessive credit expansion for this purpose. At the same time, the bank, business generally, and it may be assumed the Federal Reserve Banks…wish to avoid a general collapse of the securities markets such as would have a disastrous effect on business.”

While Mitchell basked in the glory of the moment, he failed to see what standing up to the powers that be would eventually cost him. He was about to become a target.

Despite its public silence, the Federal Reserve in Washington was apoplectic. Adolph C. Miller, a board member, “telephoned from New York that the bankers are very angry because of Mitchell’s interview; that they did not object to his relieving the market to avoid panicky conditions but that his interview overthrew banking control of the situation and started up speculative activity anew,” according to the diary entry of a board member.

Mitchell’s interview was exactly what Benjamin Strong had hoped to avoid by putting him on the board and effectively muzzling him. But instead of staying silent, Mitchell had used the gravitas and authority of his position to undermine the entire enterprise. “Dr. Miller stated that the sentiment in New York was against Mr. Mitchell as having given his interview for the selfish prestige of his Bank at the expense of his banking competitors; that other New York banks had done as much as, or more than, Mr. Mitchell to relieve financial stress,” according to notes from the meeting.

George R. James, a director from St. Louis, declared that “the Board should remove Mr. Mitchell” from the New York Fed.

The Federal Reserve board members privately debated what to do, ultimately deciding that before taking any kind of drastic action they would send Mitchell a letter asking him to formally explain himself.

“Governor Young at first objected, saying that Mr. Mitchell might put the Board in a hole. Later, however, he dictated a letter couched more moderately, and all agreed to it.” That letter cited the interview Mitchell had given. “At the request of the Federal Reserve Board and for its information, I would appreciate it very much if you would let me know whether you were correctly quoted.”

There was one other person in Washington wondering the same thing: Carter Glass, the powerful senator on the Senate Banking and Currency Committee and the scourge of the banking industry. As Mitchell was about to learn, his decision to lend money into a speculative frenzy was something Glass would never forget—and never forgive.

SEVEN

MARCH 29, 1929

The news had leaked.

On Friday, March 29, Thomas Lamont had just arrived at Villa Baroncino, a gorgeous hotel nestled in the hilly landscape outside of Florence, Italy, when he received an urgent telegram from his partners in New York.

The New York Herald Tribune had gotten wind of the secret deal he had begun negotiating in February on the Aquitania and that he had spent the past month trying to complete: the blockbuster merger of RCA, Western Union, and ITT. That morning, the Herald story had been picked up across the country; the New York Times front-page headline read: “Radio Subsidiary Sold for $100,000,000.”

After nearly two months holed up in Paris in negotiations over German reparations that remained far from resolved, Lamont had left Paris with his family the night before on the 5:20 p.m. train from Gare de Lyon for a weeklong break. But rather than enjoy his time off, he was suddenly up to his neck dealing with the merger business.

From the start, Lamont had known that if news of the massive deal became public, it could be upended entirely. But for a deal of this scale, stretching across three continents, such risks were unavoidable—and, in his view, totally worth it. Over the last several days, Lamont had worked “like a beaver,” as he put it, to get the deal done. If he succeeded, it would shape the future of business—and send a signal to the world about his preeminent place in it.

If there was one company—and one stock—that had captured the imagination of the American public, it was RCA.

Known as “Radio,” RCA was the glamour stock of the 1920s, its shares the most heavily traded on the Exchange. Investors were transfixed by RCA because it represented the future like few other companies—its potential seemed limitless, and so did its stock price. For Americans who owned radios, it was already opening their worlds.

After its invention in 1895 by Guglielmo Marconi, radio technology had grown from a few tinkerers building “radio music boxes” to millions of sales of household sets and some 564 U.S. radio stations, fueled by commercial advertising. By 1929 radio reached an American audience of nearly thirty-eight million listeners, who could tune in to music, comedy, news, and political commentary—and the inauguration of a president.

In a 1929 RCA company report, board chairman Owen Young said radio “has helped to create a vast new audience of a magnitude which was never dreamed of…This audience, invisible but attentive, differs not only in size but in kind from any audience the world has ever known…a linking-up of millions of homes.”

RCA had effectively created a new market and held exclusive patents on innovations that had yet to be exploited—which included television. Stock speculators eager to get in on the ground floor of the future sent RCA’s stock soaring from $1½ in 1921 to $85½ by 1928. And when the news of a possible merger broke in the Herald, it sent the company’s stock price even higher.

To Lamont the deal wasn’t just a merger but the equivalent of forging a transatlantic trade agreement between nations to build a colossus, an empire. And he and Owen Young, chairman of both RCA and General Electric, would be the master negotiators, just as they had been in the international negotiations for German war reparations.

One major obstacle to the deal was the White Act of 1927, a modification of the Sherman Antitrust Act that prohibited monopolies involving communications companies. Young believed this law was wrongheaded. His view was that competition in communications was counterproductive because it led to expensive and unnecessary duplication of plants and equipment. Radio communications, he argued, ought to be run by a single corporation with government oversight, like a public utility, an opinion that made many roll their eyes, since he said more or less the same thing about every business he controlled.

Lamont agreed with Young, but his logic was loftier and intended to appeal to lawmakers: The merger was a matter of national security. At that very moment the great British wire-wireless combination of the Eastern Telegraph Company and the Marconi Wireless Telegraph Company was finalizing a massive merger to unify cable lines and would soon become a formidable global force. That was competition enough, Lamont argued.

Both Young and Lamont believed they had America’s interest at heart. They told themselves that their motives were not greed but patriotism. On those grounds, they were convinced, Congress would be compelled to repeal the White Act and allow their deal to go through.

All throughout March, Lamont had watched uneasily from Paris as RCA’s stock price soared for reasons he couldn’t fully explain. He suspected it had little to do with anything of substance—certainly not with the merger talks he was quietly pursuing—and everything to do with the speculative euphoria sweeping the market. If the price rose too high, ITT wouldn’t be able to afford the deal. But from three thousand miles away, he was powerless to stop it.

Back in New York, meanwhile, a man named Michael Meehan had his own designs on RCA. He understood better than most the public’s infatuation—not just with radio technology but with RCA itself, the crown jewel of the new economy. He saw an opportunity—not to invest but to manipulate. His aim was simple: Drive up the stock price and cash in.

Meehan, a high-strung, red-haired Irishman, was the official RCA “specialist” on the floor of the New York Stock Exchange responsible for managing the stock’s trading—matching buy and sell orders, ensuring liquidity, and maintaining an orderly market. In practice, it gave him a unique lever to move the stock as he pleased. He had made a fortune trading RCA and had become a sort of financial celebrity, the face of the most popular stock on Wall Street. Visitors to the Exchange gallery would always look for him, standing at post 12 on the floor, right in the middle of all the action.

RCA’s recent run-up had started on March 8 when it jumped from 74 to 81¾. That day, Meehan had circulated a three-page document marked “Private and Confidential” to favored customers, including clients of his own firm, as well as several other brokerages. His plan was brazen: The document explained that with enough money in hand, Meehan could move the stock up at will. His partners in the scheme, which included two veteran pool manipulators, Ben Smith and Tom Bragg, would take 10 percent of the profits off the top.

Within days, Meehan had signed up sixty-eight participants, including William Durant for $400,000 and automobile magnate Walter Chrysler for $500,000. Two prominent brokers ponied up money in the names of their wives. Meehan also put his share of $1 million in the name of his wife, Elizabeth.

In the end, Meehan and his crew had amassed $12,683,000. “RCA to extend activity abroad,” reported The Wall Street Journal the next day, Saturday, March 9. “Radio Corp. is financially better off than ever.” The stock bumped to 92 by noon, the Exchange’s closing time on Saturday.

On Monday, March 11, The Trader, a financial column at the New York Daily News (which accepted “contributions” from financial touts) predicted that RCA would rise to 100 “very soon” because “its original sponsors are behind it…Tuesday it should be a real buy.”

Then the crew began to “paint the tape,” making the stock look hot by trading among themselves. On Tuesday, Meehan took his place at post 12 on the floor of the Exchange. His crew found their spots, taking care not to be seen together. At the sounding of the bell at 10 a.m., the team went into action, buying and selling RCA stock according to a careful plan.

By Wednesday, The Wall Street Journal reported that RCA had soared to “fresh record levels on the activities of big operators who have sponsored RCA’s market for the last several weeks.”

RCA reached a peak on Saturday, March 16, at 109¼, at which point the pool managers “pulled the plug,” unloading shares that were then eagerly purchased by the gullible public that had read stories suggesting RCA would continue rising. Needless to say, it didn’t. By March 23, it would drop to 87¼.

Meehan’s crew made a net profit of $4,924,078.68. For a little more than one week’s effort, Durant’s $400,000 investment paid $145,855.39. Smith and Bragg—and their wives—profited $634,631.40. Meehan and his wife made $652,783.94, and the Meehan firm another $580,000.

Apart from the investor pool’s windfall, nothing substantial resulted from the short-term frenzy, which was fueled by lies, innuendo, and clever tactics by insiders. And it was all done “in accordance with and subject to the rules and regulations of the New York Stock Exchange.”

With the news about the merger now public, there was little Lamont could do from Italy to reach investors or policymakers in the United States, who were likely looking for answers about what the agreement entailed. His entire team was scattered. “As Owen D. Young is in London, Lamont in Florence, and as J.P. Morgan leaves for Venice tomorrow, I believe nothing can be done at this end until next Thursday when they will be back in Paris,” the J.P. Morgan office cabled everyone involved.

Still, Lamont was restless. “Not very good night. Slept rather late,” he wrote in his diary. Lamont spent the day at the Villa Baroncino reading “Saturday Reviews,” a detective story by R. Austin Freeman, to clear his mind, napping in between.

But he couldn’t take his mind off the deal. Lamont was kept abreast of developments in the United States by way of regular telegrams from his office. Aside from the RCA deal making the front page of The New York Times, there were two other stories on the front page that morning that managed to connect virtually all the major actors of Wall Street who were involved, including himself.

The first headline was: “Glass Assails Mitchell for Bank’s Aid to Market; Stocks Up in Buying Rush.” The efforts of Mitchell and Durant to push back against raising interest rates had the senator from Old Dominion on a rampage. The reporter quoted Glass: “Country has been aghast for months at stock gambling.”

Lamont and the House of Morgan were hardly aghast at the news—the partners assumed that banks would manage their business wisely and preferred that the Federal Reserve stay out of it. Lamont in particular did not believe that higher interest rates would end speculation.

“The stock market will not have a very material decline unless and until there is an adverse turn in business,” Lamont wrote to his colleague back in New York, Russell Cornell Leffingwell. “Of course Jack doesn’t agree with me,” he added, referring to Jack Morgan.

The second story, just to the right of it, was headlined “Young Asks Schacht to Make Debt Offer Without More Ado” and reported on the now-deadlocked war reparations conference in Paris. Lamont, Owen Young, and their colleagues had grown discouraged and exasperated at the Germans’ intransigence, led by Dr. Hjalmar Schacht, president of the Reichsbank, and were ready to return home. Billions of dollars in reparations and the health of Europe were at stake.

“During our vacation,” Young told Schacht right before he and Lamont left Paris for a break, “you will have time to reflect both on the reasonable sum which you must offer as a base of discussion and also on the enormous inconvenience which would result for your country.”

EIGHT

APRIL 5, 1929

Carter Glass was in the hospital again.

Virginia’s senior senator was seventy-one years old and in chronically poor health. Sometimes it was his weak heart that landed him in Baltimore’s Johns Hopkins, the finest hospital in the country; other times it was his chronic indigestion. He used to walk on his tiptoes because he believed it helped relieve his symptoms. On this occasion, he was battling a terrible tooth infection that sent relentless jolts of pain through his jaw, while the deep, twisting agony of gallstones gnawed at his insides.

As a legislator, Glass had two passions. The first was segregation; Glass, like most Southern Democrats, fought tirelessly for Jim Crow laws during the entirety of his career. Once, when he was asked whether certain measures in the Virginia constitution, such as a poll tax and a voter literacy test, discriminated against Black people, he shot back: “Discrimination! Why, that is exactly what we propose. To remove every Negro voter who can be gotten rid of, legally, without materially impairing the numerical strength of the white electorate.” The Southern states, Glass said in an interview he gave in 1928, “spit upon the Fifteenth Amendment”—the 1870 amendment that granted equal voting rights to Black Americans. The South, he added, has “no intention of letting the Negro vote.”

Glass’s second passion as a lawmaker—and here he was a singular force—was the banking system. Though self-taught, nobody in Congress or the White House knew more about the intricacies of banking than Glass. As his good friend Russell Cornell Leffingwell wrote in a letter to Glass, who was undergoing medical tests by the Johns Hopkins doctors: “Few men in public or private life have studied our banking system more thoroughly or have a better right to express opinions about it. Your service in…defending the Federal Reserve system in the United States Senate entitles you to be regarded as a high authority on this system.” Glass could not have agreed more.

As he waited on his doctors at the hospital, Glass scoured each day’s financial news with growing fury as the market continued higher—the Dow had already jumped another 3 percent since Charles Mitchell’s intervention—his penetrating blue eyes glaring from beneath his unruly brows and above his beak of a nose. Always ready to pick a fight, Glass had already decided that he was not going to let Mitchell’s perfidy go unchallenged. Indeed, his anger was already public knowledge. Two weeks earlier, Glass had successfully browbeaten the Federal Reserve Board into raising the rates it charged to Wall Street for lending money to stock investors, a long-running crusade on his part. He believed that Wall Street was diverting a grossly disproportionate share of the country’s available credit for its own unproductive uses and he was going to put a stop to it, if it killed him.

To Glass, Mitchell’s decision to bolster the call loan market with an injection of $25 million was in direct defiance of the Fed board. Glass believed that Mitchell’s actions, as well as the Fed’s silence in response to them, went beyond merely political differences and amounted to malfeasance. Not to mention a galling personal challenge.

Because of his sickly nature, Glass was never one for making a lot of speeches or even using the phone. His weapon of choice was the letter, which he would sometimes dictate, often from his hospital bed at Johns Hopkins or from the Raleigh Hotel, where he’d stay when he was in Washington, DC. “It has seemed to me that a man occupying Mr. Mitchell’s station in the Federal Reserve system should not refuse to cooperate, as president of the largest member bank in the United States, with the administrative authorities of the system to abate a menacing misuse of credit in the stock market,” he wrote to his friend Leffingwell, who, with Lamont, was also a partner at J.P. Morgan. He added, “Whether the Board has been sound in its resistance of this effort to re-adjust rates I am not prepared to say. I am, however, always prepared to condemn mutiny, such as I think may be directly charged to Mr. Mitchell…There are many reasons for the flowing of credit into the wildly speculative New York market which need to be taken into account and very carefully considered. About these matters men may differ; but never about insubordination nor about the vice of avowing one’s obligation to stock gambling as superior to one’s sworn obligation to his country.”

Carter Glass had just declared war on Charles Mitchell.

If the nation’s financiers and speculators had one enemy above all others, it was Carter Glass. And if Glass had one enemy above all others, it was Wall Street. He was born in 1858 in Lynchburg, a town of about seven thousand people, 180 miles southwest of Washington, just down the road from Appomattox, where the Confederate Army surrendered to the Union.

The youngest of five children, he lost his mother when he was two. His older sister, Nannie, who was twelve years old at the time of their mother’s death, tried to take her place, raising him as best she could. Their father, Major Robert H. Glass, served as an officer in the Confederate Army, and though Glass was a young boy when the war ended, the memory of the Civil War was always present, searing the humiliation of defeat deep within his soul. His earliest memory, from the age of five, was going to the banks of the James River to view the coffin of General Stonewall Jackson, draped in the Stars and Bars, as it floated by on a packet boat. Two years later, in Lynchburg, Glass encountered a group of Union soldiers on horseback and refused to cede the path to the “blue-coated devils.” Amused, one soldier grabbed the boy and took him for a ride, playfully asking what he intended to be when he grew up.

“A major, like my father, and shoot Yankees,” Glass shot back.

Shooting Yankees, in a manner of speaking, is exactly what Glass grew up to do. With not even a high school education, he followed his father into the newspaper business, no field for gentlemen. He built a political following with a fervent belief in free enterprise—for white men, that is—and in curtailing the voting rights of Black people. When first elected to the House of Representatives in 1902, Glass asked to be on the Committee on Foreign Affairs. Instead, he was appointed to the House Banking and Currency Committee. “I don’t know anything about banking, but I guess I can learn,” Glass said. Once he started attending committee meetings, the topic gripped his imagination, and he immersed himself in literature on banking and finance.

In his maiden speech to Congress he denounced a Republican proposal to establish a commission to study the feasibility of setting up a central bank. In his speeches and writings, he called Eastern bankers “money devils” and played up his image as an underdog taking on the colossus of Wall Street. His core belief was that Wall Street speculators did nothing to help the country’s economy but rather siphoned off capital that should go to building manufacturing plants and providing jobs. Glass served on the Pujo Committee, before which J. Pierpont Morgan made his historic appearance in 1912; however, he maintained a certain admiration for the House of Morgan, and particularly for Thomas Lamont. Glass later recommended Lamont to President Wilson as a valuable participant in the war reparations negotiations.

In 1913, Glass was appointed chairman of the House Banking and Currency Committee, where he remained the bane of the financial industry. But at the same time, he was instrumental in the creation of the Federal Reserve system. In 1910, an elite group of bankers and politicians met on Jekyll Island, off the coast of Georgia, to design a superbank to better manage the U.S. currency and put an end to the financial crises that regularly took down the economy. Their banker-friendly plan, conceived in secrecy, stood little chance of passing muster in Congress until Glass was brought in and offered a solution: He wrote a bill calling for a decentralized structure that would let every region in the country have a say in setting monetary policy and thereby assure skeptical voters that New York would not be single-handedly running the economy. With the strong support of the Woodrow Wilson administration, Glass’s bill became law and the Federal Reserve was born. Is it any wonder he felt so protective of the Federal Reserve system? Up to that point in his career, it was his greatest achievement.

Glass’s refusal to submit to Wall Street earned him the admiration of Woodrow Wilson, who appointed him secretary of the treasury in 1918. In 1920, the same year he was appointed to the U.S. Senate, he was put forward as a potential Democratic presidential candidate by a fellow member of the Virginia congressional delegation. In 1927 he published a self-congratulatory memoir, An Adventure in Constructive Finance, which solidified his status as an elder statesman, albeit a combative one who had plenty of battles ahead of him.

Impatient, often sarcastic, sometimes intentionally rude, Glass was an enigma. On the door of his office he hung a sign indicating visiting hours from 10 a.m. to 4 p.m. every day, though he could rarely be found there at those times or any other. If someone were to track him down, Glass was likely to ignore the person completely. When focused on a problem, whether at home in Lynchburg or in the halls of the Capitol, Glass could be shockingly aloof. He would pass by colleagues, even dear friends, without acknowledging them.

When Glass rose to speak on the floor of the Senate, which wasn’t often, his penetrating Southern drawl, flinging attack after attack at his target, emerged from the right corner of his mouth. “He did all that with one half of his mouth,” observed President Wilson after one such Glass performance.

As the stock market boom accelerated through the late 1920s, Glass watched with growing alarm as the Federal Reserve became, in his view, a servant of Wall Street funneling the nation’s resources to bankers in New York. To Glass this was nothing short of thievery, and he was determined to halt it.

“I unhesitatingly declare,” Glass said, “that the use of the Federal Reserve facilities for stock speculation is textually in violation of the law and that Mr. Mitchell, having aided and abetted such violation of the law and having flouted the authority of the Federal Reserve Board, should be properly disciplined.” Mitchell had “slapped the board in the face.”

Someone needed to teach him a lesson.

NINE

APRIL 8, 1929

William Durant feared someone might spot him.

He arrived by train at Union Station in Washington in the afternoon, quickly making his way to the recently built 250-room Carlton Hotel at Sixteenth and K Streets, two blocks from the White House.

Only his wife, Catherine, knew about his secret trip. They’d had breakfast together that morning at their home at 907 Fifth Avenue, and after a shave by his personal barber, Durant dressed carefully, packed a valise, and kissed her goodbye. Rather than have his chauffeur drive him, he took a taxi to Penn Station, making it easier to blend into the crowd.

He was going to the White House to see President Hoover.

A few days earlier, Durant persuaded Mabel Walker Willebrandt, a U.S. assistant attorney general known as the “First Lady of Law,” to send a note to President Hoover’s secretary, Lawrence Richey.

“Won’t you please bring to the President’s attention the suggestion of seeing W. C. Durant for a few minutes’ conference before he goes abroad on April 17th?” she wrote. “He is an outstanding figure in the financial world.” Willebrandt told Hoover that Durant was also a supporter of Prohibition and “can do a great deal of good for us as an ‘unofficial ambassador,’ spreading faith in the administration while he is abroad.”

Durant remained out of sorts about the way the Federal Reserve was trying to clamp down on speculation ever since his phone call with Mitchell back in February. He was convinced more than ever that he needed to warn Hoover about the genuine threat he believed the Federal Reserve had become to the stock market’s continued rise. And he was increasingly irritated with Carter Glass’s public proclamations that he felt were threatening prosperity. Radio, air travel, consumer goods—these were all inventions, Durant believed, that were improving millions of people’s lives. In his view, so was the stock market.

He considered Charles Mitchell an American hero and Glass’s attack on him nearly treasonous. “Senator Glass probably is not aware that the Industrial Rayon Corporation is at this moment building a plant in Covington, VA, his own state, costing about $5,000,000,” Durant told a reporter in the days after Glass called for Mitchell’s removal from the Fed board. (Durant was heavily invested in Industrial Rayon.) “This industrial enterprise and hundreds of others making for our present prosperity would never have been attempted if the securities of these companies could not, by order of the Federal Reserve Board, be accepted as collateral when offered by brokers or others to the banks of the country.”

The conflict between Mitchell and Glass had become a national fracas as politicians, columnists, and even economists took to radio and newspapers to battle over wealth and speculation and their relationship to the very definition of what it meant to be an American.

“Some members of the Senate appear to be under the impression they know how to stop speculation on the New York Exchange, which they apparently hold to be against public policy,” former Oklahoma senator Robert L. Owen, a Democrat, said in support of Mitchell. “My study of the fiscal system and the Reserve Act…convince me that speculation cannot be stopped without closing the exchange, a remedy worse than the disease. Moreover, speculation on the stock and commodity exchanges never has been declared to be against public policy, either by congress or the courts. The Supreme Court, in the Chicago Board of Trade case, has emphatically sustained speculation as necessary and unavoidable.”

Glass and the Fed came in for a good chiding by a young Princeton economist named Joseph Stagg Lawrence, who accused the senator and his cronies of class bias. “It seems incredible that in the year of our Grace 1929 a body of presumably intelligent public men should permit fanatical passions and provincial ignorance…to condemn an innocent community.” As the economist John Kenneth Galbraith drolly observed years later, “Some hardened Wall Streeters may have been surprised when they realized that the ‘innocent community’ meant them.”

L. M. Williams, a Virginia banker and president of the Virginia Central Railroad, called on Glass to quit instead of Mitchell: “I believe it would be far more appropriate that you resign as senator from Virginia.”

Much as he provoked the ire of the finance community, Glass was not without allies in the Senate. “We have had testimony before the Senate Agriculture Committee even today that Western and Midwestern money is being sent into the speculative market,” Senator George Norris of Nebraska observed. “Witnesses have said that they were charged 6 percent for money they could have obtained for 4 percent if such a great amount of money had not been drawn into the speculative whirlpool…That man Mitchell is one of the very men who should be trying to check speculation and yet he is trying to encourage it.”

Senator Duncan Fletcher of Florida, ranking Democrat of the Banking and Currency Committee, also threw his weight behind Glass and the Fed: “I think he [Mitchell] should be disciplined. He has no right to defy the Federal Reserve Board. He is going beyond his powers and his rights. I don’t know what the board thinks it best to do. It can remove him if it wants to.”

Paul M. Warburg, in his annual report to stockholders of the International Acceptance Bank, criticized the Fed for failing to take proper action to check the “orgies of unrestrained speculation.” His role in contributing to the creation of the Fed, and his early membership on the first Washington Board of Governors, lent Warburg’s words particular weight. “That the country’s banking system is tossing about today without its helm being under the control of its pilots gives cause for deep concern,” Warburg said.

“The Federal Reserve System, pursuing a well-conceived and far-sighted policy, rose to a position of world leadership. Yet within the short span of a year it lost that leadership, owing to its failure promptly and effectively to reverse the engines at the critical moment,” Warburg continued.

On and on the debate raged. Alexander D. Noyes, financial editor of The New York Times, accused Warburg of “sandbagging American prosperity.” Warburg’s warning, he said, “first caused alarm, then indignation, and presently, when the stock market resumed its upward rush, expression of supercilious contempt.”

In his room at the Carlton, Durant prepared the arguments he planned to spring on Hoover. He didn’t have an appointment—but he felt confident in his powers of persuasion. As his friend Walter Chrysler once said, “He could coax a bird right down out of a tree.” Knowing that Hoover was enamored of polling, Durant had quizzed executives from one hundred of the most important companies, asking them if they considered the price of their stock to be too high. A majority had answered no, which was just the kind of evidence that Durant thought would appeal to Hoover.

At dusk Durant slipped out of the hotel and walked the neighborhood, ambling past the White House. Bright lights shone from its windows; it looked as if the president was hosting a party. Durant strolled back to the hotel. At 9:30 p.m., dressed in his carefully pressed suit, he left the Carlton again and hailed a taxi for the five-minute ride to the White House.

The guards waved the cab through, apparently assuming that the passenger was a late-arriving dinner guest.

A footman came forward, and Durant announced himself.

Mr. Billy Crapo Durant. For a meeting with the president.

The footman was flummoxed. According to the list of attendees, every invited guest had already arrived.

Durant persisted, demanding to see Hoover.

Why hadn’t he made an appointment?

Durant tried to explain that his meeting needed to be kept a secret.

The ruse worked. The butler led Durant to a waiting room. A few minutes later Hoover himself bustled in.

Hoover sat and listened while Durant warned in a calm tone that a major financial disaster was imminent.

As persuasive a salesman who ever lived, Durant pleaded with Hoover to reverse the Federal Reserve Board’s clampdown on brokerage loans and security credit.

Hoover, the Great Engineer, was not convinced by Durant’s warnings. He was skeptical, tending to believe that stock prices would soon fall to a more rational level—a downturn, yes, but hardly a financial calamity, Hoover believed.

The president intended to get in touch with Richard Whitney, vice president of the Exchange, though Hoover was not inclined to tell him what to do. “I preferred to let American institutions and the states govern themselves, and that the exchange had full power under its charter to control its own members and to prevent it from being used for manipulation against the public interest,” Hoover later said.

Durant, sitting in the White House that night, passionately argued over and over again to Hoover that the financial health of the entire economy, and not just the stock market, was based on credit, and Hoover, if he did nothing, was about to bring an end to an unprecedented era of prosperity.

“It’s up to you now,” Durant said before leaving the White House.

TEN

APRIL 12, 1929

John Raskob, one of the wealthiest men in the nation, was planning a big dinner party at his apartment, at the lavish Carlton House, adjacent to the Ritz-Carlton on Forty-Sixth Street, where he enjoyed the finest hotel services money could buy, including a novel new amenity: “electronic ‘buttonpads’ with four buttons—each used to summon a different servant.” The dinner was to take place in a week for a handpicked group of some of the most elite members of the Democratic Party, including his good friend and recently defeated presidential candidate Al Smith, along with Smith’s running mate, Senator Joseph Robinson of Arkansas, and several other U.S. senators. Raskob had just returned from Palm Beach, in part, to get everything ready ahead of what could be described as his “Anti-Hoover Banquet.”

Raskob—a hero to the business community and a villain to much of the political establishment and public—planned to use the private dinner to set the record straight; he had no plans to resign from his role as chair of the Democratic National Committee, despite his friend Smith’s brutal loss to Hoover. Instead, Raskob was doubling down: He planned to promise that he would get the party’s finances in order and use his own fortune—estimated to be as much as $500 million—to underwrite the party’s fight against Hoover. That was what the dinner was really about; he wanted the Democrats to spend the next four years single-mindedly and relentlessly attacking Hoover with everything they had.

Raskob saw his role—and his immense wealth—as the country’s most vital counterweight to Hoover. He believed his money could be used as a political weapon: a way to obstruct the president’s agenda, weaken his standing, and ensure he would be a one-term leader. Raskob considered Hoover a sanctimonious bureaucrat whose meddling and moralizing stood in stark contrast to his own bold, unapologetic faith in capitalism and risk. But it was more than that, too. This was deeply personal. Raskob was not a man accustomed to losing, and his friend’s defeat stung. If Raskob had his way, the Democratic Party would become a well-financed engine of opposition, and a Democrat would be in the White House by 1932.

He was also entertaining a darker idea—one he hadn’t yet decided whether to pursue. With enough discretion and the right operative, he believed he could quietly orchestrate a covert campaign in the press to undermine Hoover’s image—a calculated drip of unfavorable coverage, seeded by intermediaries in sympathetic newsrooms across the country. All he lacked was the right man to carry it out.

Of all the larger-than-life figures who dominated the 1920s, few were as imposing, as dominant, as seemingly omnipresent, as Raskob. There were times when it seemed as though he were everywhere, doing everything: sitting on corporate boards, diving into politics, gleefully participating in the stock pools organized by Wall Street insiders, tossing off highly quotable thoughts on every subject imaginable, running an important Catholic organization—and raising thirteen children (although his wife did most of that). There was simply no one else like him in America: an entrepreneur–philosopher–financier–political operator who felt like he could do anything he wanted.

With his deep-set, perpetually alert eyes, Raskob was described as “the organizing genius of this country” by the monthly magazine The World’s Work. “He has effected the greatest combination of interests—potentially and actually—the world has ever seen…He is simply a man with an extraordinarily keen business sense, a vivid but not at all a fantastic imagination, and a power of translating imagination into figures and then convincing others that the dream can be made to come true.”

Known to friends as Johnny, Raskob never went to college. The son of a cigar maker in upstate New York, he started his career as a $5-a-week stenographer. In 1901, he was hired by the DuPont corporation as Pierre du Pont’s personal secretary and by 1914 had become the company’s treasurer. He grew so close to the du Ponts he was practically a member of the family and, with their backing, led a daring takeover of General Motors that gave DuPont a controlling interest.

Then, like so many others, he took his wealth and threw it into the stock market, where he amassed even more money than he had earned in the corporate world. Just the month before, he had made a quick $291,710.86 as a lucky invitee to participate in Meehan’s pool for RCA shares. Raskob loved playing the market. Even though he sat on the General Motors board, he routinely flipped shares of GM, buying them up only to turn around and bet they’d go down. “I was raised in a country where a mortgage on your home was considered a disgrace,” he liked to say—a nod to just how dramatically he, and the nation, had evolved in their comfort with debt and financial risk.

He wasn’t as rich as John D. Rockefeller or Henry Ford (who was christened “our second billionaire” in a magazine article just that month), but he often made more headlines.

Still just fifty years old in 1929, he was one of those people who seemed to glide through life.

That was what made Raskob’s decision to dive into politics such an aberration. Had Smith won, Raskob likely would have been the treasury secretary. Prior to the election, he had insisted with his typical bravado, “I have never been connected with an enterprise that was a failure, and I am not going to this time.”

Instead, Smith’s defeat was the first major public setback of Raskob’s life, and he intended to rebound from it with a vengeance.

In the political world, he was disliked—“an awful crank to deal with…fussy…and hard to get along with” was how Frances Perkins, Franklin Delano Roosevelt’s future secretary of labor, put it. There was even a word for it: Raskobism.

In the business realm, it had always been the opposite: Raskob was a self-made hero of American business.

When he took the job as du Pont’s personal secretary, he entered the orbit of one of America’s most powerful industrial dynasties and quickly climbed the ladder of success, watching (and learning) as the family company—whose original business was gunpowder—built itself into a powerhouse by swallowing up smaller competitors. By the 1920s, he had eclipsed the du Ponts as an influential business leader, someone whose words could move markets. In March 1928, about to sail for Europe, he told a journalist that General Motors stock should be selling at “fifteen times its earnings.” The price promptly shot up. Two million shares traded hands in two hours, adding over $47 million in value of outstanding GM shares.

Money alone, however, never quite satisfied him. He craved power, recognition, validation, and respect. Politics was an obvious way to get all those things, and Raskob saw his chance to play kingmaker in the presidential candidacy of the popular New York governor Al Smith.

The two men had become friends by chance in 1926, both devout Catholics and advocates of repealing Prohibition, which had been in effect since 1920 and had largely succeeded only in driving drinking underground. Raskob and Smith believed Prohibition was an issue that could swing the White House back to the Democrats after eight years of Republican domination. But they also knew Smith couldn’t win without the support of the business community, which favored the socially awkward Hoover over the genial, smooth-talking Smith. “Business, big or little, has nothing to fear from Governor Smith,” Raskob told reporters after the stock market briefly wobbled in 1928. Stocks perked up the next day, a flurry dubbed the “Smith market.”

Smith’s professional handlers had their doubts about Raskob. For starters, he wasn’t even a Democrat. But Raskob understood how to leverage friendship and establish loyalty: In March 1928, he gave the governor a gift of one thousand shares of RCA stock worth more than $100,000, just before it soared into the stratosphere. Feeling indebted to Raskob, Smith defied his advisors and asked him to serve as his campaign chairman and head of the Democratic National Committee (DNC). “There’s nothing I’d rather do,” Raskob responded.

A few days after their conversation, tragedy struck. On July 5, 1928, Raskob’s second oldest child, William, was killed in an automobile accident while returning home from Yale University. But Raskob refused to let it slow him down. Immediately after the funeral, Raskob went back to New York, where he was formally elected to his new role.

Raskob’s appointment made headlines around the country, mostly in negative ways. Carter Glass condemned Smith’s choice of the New York financier as reflecting “not only…distaste, but an actual contempt for the South.” Franklin Delano Roosevelt, who would fill Smith’s seat as governor of New York, called the choice of Raskob a “grave mistake” that would “permanently drive away a host of people in the South and West and rural East who are not particularly favorable to Smith, but up to today have been seeping back into the party.”

Raskob also made a critical blunder that gave his critics additional ammunition. He neglected to inform GM’s upper management of his new role before it became public and faced anger from the company’s management and board about embroiling GM in politics. It had been his plan to install the DNC headquarters in the GM building at 1775 Broadway, so he could continue his work for the company. Alfred Sloan, the image-conscious president of GM and a staunch Hoover supporter, was furious with Raskob. Raskob argued that his involvement could only help GM and pointed out that many of GM’s leaders had held political leadership roles. His close colleague Pierre du Pont, whom he had pushed to get involved with GM and was a board member, stood by him, though others aligned with Sloan.

After a week of turmoil, Sloan took the issue to the GM board for a vote, and although Raskob was allowed to stay on the board, he was ousted from his role as GM finance chairman. He wrote Sloan a letter of “voluntary resignation,” explaining that his duties as national chairman would require all his time and that he didn’t want the public to assume that GM was taking a role in national politics. The victorious Sloan accepted his resignation “with regret.” Without a salary, Raskob quickly sold about $20 million in GM stock to finance his lifestyle and foray into politics.

Tapping into his extensive network, Raskob worked miracles raising money for Smith’s underfunded campaign, pressuring well-heeled friends to donate or make loans to the campaign, and contributing at least $230,000 himself. But his inexperience in politics was exposed at his first formal press conference, as he was besieged by aggressive reporters with questions on farm policy and other pressing issues. For years, the press had been happy to run with whatever Raskob told them, about markets or companies or anything else. But it was different now. Under direct fire from the press for the first time, Raskob faltered. “It is a cardinal rule of campaign management to let the candidate speak for himself,” The New York Times lectured him, “and this the Democratic National Chairman seems unable to do.” For a man accustomed to flattery from the press, the criticism stung.

Raskob and Smith believed opposing Prohibition would help them win. That was true in big cities like New York and Chicago, but in rural areas and much of the South, many voters still strongly supported the ban on alcohol. In September, Raskob predicted to Time that Smith would win 347 electoral votes, far more than the 266 needed to be elected president. He later upped his forecast to an even more improbable 402 electoral votes.

But once again Raskob’s political instincts proved to be a poor cousin to his business acumen, as he grossly underestimated the public’s desire for continuity in Washington, especially with the economy so strong. Smith took just 41 percent of the popular vote, failing to carry even his home state of New York. Prohibition, it turned out, hadn’t been a key issue after all. While Raskob was convinced that the Republicans had relied on anti-Catholic bigotry to win, intimating that Smith would be subservient to the Vatican, he played the gentleman in public, graciously accepting defeat.

“In accordance with democratic principles,” Raskob said, “we cheerfully accept the will of the majority.”

Privately, he immediately set about plotting against Hoover.

At a January meeting in Albany, Raskob spent two hours in conference with Franklin Delano Roosevelt, the newly elected governor of New York, who had received thousands of letters and cables from Democratic county chairmen insisting that Smith had been “cheated out of the Presidency” due to religious bigotry. They wanted Raskob—whom they identified with Republicans and Wall Street—out as chairman of the DNC.

Ahead of the planned dinner, Raskob worked from his apartment at Carlton House as he waited for an office he had leased at 230 Park Avenue—a much-praised new block-wide office building that sat right in the middle of Park Avenue at Forty-Fifth Street and had massive archways allowing vehicular traffic to flow directly through the structure—to be completed. He had two Cadillacs and a chauffeur, but he enjoyed walking, and the new office would be only a couple of minutes by foot from his apartment.

Raskob contemplated the big idea he was going to present to his dinner guests: He wanted to professionalize the party and use the same methods that had brought him so much success in the world of business into politics, rather than the ineffectual, ad hoc style that had long characterized whatever party was out of power. He intended to raise money all year round, not just during campaign season, so “the party can carry on in a strong and militant manner.” And there was one other item on his agenda: “We ought to have an active headquarters in Washington,” rather than New York.

All in all, he didn’t think these ideas would be terribly hard to sell them on. The trickier topic was going to be money. The party’s finances were in disarray, $1.3 million in debt—in no small part due to the many millions spent on Smith’s campaign. Its primary creditor was County Trust Company, which was run by Raskob’s friend James J. Riordan. Raskob had been a prolific money-raiser, easily procuring funds from the likes of Herbert H. Lehman, scion of the Lehman Brothers family, and even Arthur H. Sulzberger, the assistant to the general manager of The New York Times.

But now he was going to ask those benefactors who had guaranteed the loans to help him pay them back. And he knew they were not inclined to do so. Many of them had already told him he would be better off starting a new fundraising campaign rather than pressure the guarantors to pay up. They were well aware that Raskob had the means to pay off the loans out of his own pocket. To Raskob, however, it was a matter of principle.

“When the underwriters were asked to affix their signatures, no one ever thought it would be settled in this manner. At least I didn’t,” his friend Bernard Baruch wrote him when Raskob asked him to pay up. Baruch was convinced Raskob was going to lose friends if he continued to press donors. “The fact that under this plan I would contribute $50,000 is not the thing which impels me most to thus frankly write you and ask you to turn aside from something that will hurt you and hurt the Party,” Baruch added.

To Raskob, these excuses were just that. Sure, he could cover the loan all by himself. But he felt the guarantors, many of whom were his close friends and had made huge profits together on stock pools, had a responsibility to make good on their pledges. Besides, with the surging stock market making them all richer with every passing day, everybody could easily afford it.

If he could just get the debt paid off, Raskob was determined he could stay atop the DNC, move it to Washington, and redefine its role as a ruthless fighting machine.

ELEVEN

APRIL 14, 1929

On Sunday evening, April 14, William Durant arrived at Steinway Hall, the sixteen-story headquarters of the famous piano maker, just across from Carnegie Hall on Fifty-Seventh Street. He ascended to the penthouse, where WABC had a broadcast studio.

Columbia Broadcasting System president William S. Paley had just purchased WABC late last year, and Durant had paid a healthy sum for fifteen minutes of airtime to vent his frustration about the Federal Reserve Board. CBS was among the most powerful broadcasters in the world, reaching thirty-five million Americans.

Over two weeks had passed since the market’s late March drop, which had scared Wall Street and hadn’t let up until Mitchell had made his announcement about lending to speculators. Investors were still jittery.

If he couldn’t convince Hoover to intercede with the Federal Reserve’s board in Washington directly, he thought that perhaps a public pressure campaign might do the trick. Inside the New York Fed, word had gotten back to them that while “the president is concerned” about the Washington Fed constraining the markets, “I understand he prefers to remain hands off at this juncture,” as George Harrison told Owen Young. “We might only embarrass him by seeking an audience right now.”

At exactly 11 p.m., after being introduced by a mellifluous-voiced announcer, Durant pursed his lips and leaned into the microphone.

“In this peaceful country today, a great battle is being waged—a battle between the business interests and the Federal Reserve Board,” Durant began in a calm, authoritative voice.

“At a time when this country was enjoying the greatest prosperity ever known, the Federal Reserve Board, by tactless handling and spectacular methods, succeeded in creating a panic costing the people of this country hundreds of millions of dollars.”

Durant, reading from his script, told the audience of another poll he had personally conducted: “A few days ago I submitted through the Chambers of Commerce to 500 industrial leaders in twenty industrial centers the following question: ‘Are you in favor of the policy of the Federal Reserve Board in restricting credit and compelling banks to discriminate against stock exchange collateral?’ To this question I have received 463 replies—451 opposed and only 12 favored the policy of the Federal Reserve Board. Ninety-seven and one-half percent could almost be considered unanimous.”

Durant pointed out that in 1928, Americans had purchased $10 billion worth of new securities outright or on installment plan.

“It may surprise you to know that five years ago…there were less than three million people in the United States owning stocks in industrial enterprises,” he said, going on to argue that the great prosperity of recent years was due to the flood of new shareholders into the stock market. “And still the Federal Reserve Board would announce to the world that these securities, some of which are as sound as the securities of the government itself, cannot be accepted by our banks as collateral.”

Durant contended that the Fed’s efforts to curb speculation was hurting all American businesses. “The cotton planter, the farmer, the merchant, the manufacturer, and businessmen in all lines requiring capital for their undertakings are paying an outrageous and unnecessary penalty as the result of the determination of the Federal Reserve Board to regulate brokers’ loans.”

Durant knew that he and every serious market player, as well as hundreds of thousands of small investors, could go bankrupt if the Fed followed through with its plan to throttle lending to speculators. He called the March 26 plunge in the market a panic “authorized, approved, and caused by the Federal Reserve Board,” which had sent out the order “liquidate and pay your loans.”

The Fed could have stopped the panic, he said, but “they sat and watched destruction rage.” He then praised Charles Mitchell, saying, “The panic was only stopped by the action of Mr. Mitchell of the National City Bank. For this patriotic offer he was threatened with excommunication by Senator Glass.

“I have been accused of being the bull leader of the market,” Durant said. “If this means that I am a bull on the United States of America, I am forced to plead guilty.”

Durant’s stinging speech was recounted on the front page of The New York Times the next morning. In the event Hoover missed the article, Durant arranged for a copy of his speech to be sent to the president. How serious was Durant about all this? In the moment, he always came across as deadly serious, fully committed to his argument. But then he’d find himself distracted, maybe with another deal, or another toy to play with.

Five days later William and Catherine Durant sailed first-class to Europe for a six-week vacation.

In Washington, Durant’s efforts were being ignored—or worse, his words were being viewed as taunts aimed at politicians who wanted to regulate the markets and banks.

“When men like Durant, who have made their great fortunes by speculative methods, come out and find fault with whatever measures the Federal Reserve banks may take to suppress the orgy of speculation, it is perfectly obvious that he is doing it wholly for selfish reasons,” said Senator James Couzens, a Republican from Michigan.

One of the wealthiest men in the Senate, Couzens had made a fortune as a partner of Henry Ford, who bought out his shares of Ford Motor Company for $30 million in 1919. As an industrialist who had little use for Wall Street, he was no fan of either Durant or Mitchell. He denounced the Federal Reserve Board for “dumbness” in not curtailing the diversion of large funds to brokers’ loans used to “gamble” on the stock market.

He and Carter Glass shared similar views about Wall Street. It was nothing more than gambling and speculators were the culprits, siphoning off capital for their own greedy purposes. Glass said Durant, with his adventurous speculative forays, “has lured more innocent amateur gamblers into the market than any other forty individuals in the United States.

“The gamblers have run away with the money market in New York,” he said.

While Durant was on vacation abroad, the two senators began conversations about how they could rein in the financial industry.

They were both concerned about a pending bill that was soon to come up for debate called the Smoot–Hawley tariff bill, which Glass considered “economic insanity.” Senator Reed Owen Smoot of Utah, one of the bill’s sponsors, had been a key ally of Hoover’s during the campaign, and this bill was meant to fulfill their promise to protect American farmers from foreign competition. It was a protectionist effort that was publicly popular. But the early drafts of Smoot–Hawley included some economic stabilization measures to placate Wall Street, such as authorizing the Treasury Department to issue short-term loans and Treasury bills up to $10 billion in the event of a credit crunch. Glass saw this as a backdoor gift to Wall Street, believing that such short-term certificates could be used to fund “activity of stock gamblers.”

If the tariff bill were to move ahead—which he believed “constitutes moral insensibility”—Glass had an idea that he knew Durant and Mitchell would hate, one that might finally tamp down the market: At the right time, he would insert an amendment in the tariff bill that would levy a tax of 5 percent on transfers of stock held for less than sixty days, aimed squarely at penalizing speculators. To Glass, if the Federal Reserve wasn’t going to step up and do its job, he was perfectly happy to do it for them.

TWELVE

MAY 7, 1929

As the month of May began, John Raskob finally moved into his new office on the thirteenth floor at 230 Park Avenue, where he shared 3,600 square feet of walnut-paneled space with his friend and mentor Pierre S. du Pont, the former chairman of General Motors. On his wall in a frame, Raskob displayed his words to live by: “Go ahead and do things, the bigger the better…”

His dinner with the Democratic Party’s elite had gone so well that he was already looking for space in Washington for his anti-Hoover headquarters. He had also already managed to knock $750,000 off the party’s debt load—he now had “just” $800,000 to go. And he tapped Jouett Shouse, a former congressman from Kansas, as chairman of the executive committee of the Democratic Party. The only thing he hadn’t managed to do yet was find his publicity assassin—that was still a work in progress.

The news headlines had blared that Raskob was on his way out as the DNC chairman. (“Smith and Raskob Out,” the Daily Press wrote.) On the contrary: He was decidedly in.

On this particular morning, however, Raskob wasn’t concerned with the accuracy of the stories about his political plans. He was focused on a New York Evening Post article that had just broken the news of his newest business venture, which he hadn’t yet expected to share publicly: a grand vision to democratize the stock market by allowing anyone to invest in a basket of stocks.

Much to Raskob’s annoyance, the Post got parts of the story wrong, but what really frustrated him was that the story had gotten into the papers at all. He had postponed launching the company, Equities Security Company, in part because he was so preoccupied with organizing the offices of the Democratic National Committee. But the more important reason for the delay was because he was worried that the market was starting to look frothy. The Dow had jumped nearly 9 percent since early April and had closed the prior day at 326.16. Launching a new company at the height of the market, he knew, was a recipe for trouble.

Still, the Post got enough of the story right that Raskob decided he needed to say something publicly, if only to put a marker down and correct any misperceptions about what he was planning. Plus, it might quiet—or at least divert attention away from—all the gossip in Washington about his political efforts.

Raskob called the business editors of several newspapers, who quickly sent over reporters to hear what he had to say—and get a glimpse of his new office for the first time.

The reporters marched through the polished brass doors of the lobby, where the ceiling was punctuated by gleaming bronze fixtures, reflecting the light from ornate chandeliers that hung like jeweled crowns. Every surface glistened, as if the entire building were dipped in gold.

When the crowd of journalists was assembled in his office, he unveiled what he had been talking to associates and peers about for months: “I have found that the greatest pleasure in the business game is to help others make money,” he said. “Today the working man, the fellow who, say, has saved several hundred dollars and would like to invest it, cannot do so with safety, or with the chance of making a worthwhile profit. That is the man I would like to help…to really participate in the huge profits of American industrial progress.”

Raskob said that the company he envisioned would allow ordinary Americans to buy a group of stocks, chosen for them by an investment professional, and, uniquely, use debt to boost returns. He also planned to offer an installment plan to make it affordable for his customers. It would be no different than using an installment loan to buy a car.

“Say a wage earner had saved $200 and wished to invest it in stock in the proposed corporation for the purpose of profit. Well, he would be allowed to buy $500 worth of stock for his $200. Through a subsidiary finance company, or discount company, the $200 investor would be granted a loan of $300, the subsidiary company accepting his stock as collateral. Then by payments of $25 a month or so the investor would pay his loan.”

The plan, he touted, would enable anyone with a few dollars to spare to participate in the greatest wealth-creating machine the world had ever seen.

“I didn’t see why the working men and women of our country should not be let in on the tremendous profits which are being made in America today. I have seen a number of fortunes made by careful investment, but as a rule not by the little fellows so to speak.”

Raskob, who made his name, in part, by helping invent installment payment plans for General Motors under Durant and later as the firm’s leader, considered the use of debt to create wealth and prosperity to be a powerful force for societal good.

“It has been my observation that one of the great developers of character and of humanity is the fact of being in debt,” he told the reporters. “The man who is putting aside something, perhaps to meet an installment payment, is happier and better off than the man who spends his all as he goes.”

Raskob understood that debt posed risks and that Wall Street had more than its fair share of shady lenders and scam artists. But to his way of thinking, his new professional approach would effectively put them out of business.

“Now,” Raskob continued, “all the man with, say, $200 to $500 to invest can do today is to buy Liberty bonds or to turn his money over to some gyp concern for investment in wildcat oil and other promotion schemes. I don’t mean to say all of the present investment trusts are tricky, but there is no question that a number of them are, especially those which handle the money of the small wage earner who has no special knowledge of stocks.”

The pressing question was the timing of Raskob’s new venture. When would it be launched? He wasn’t sure, he replied. “I have heard some opinions,” he said, “that the present time is not opportune for investment because the general level of prices is too high and perhaps it’s true that some stock may be selling at 20 percent less in another year; but, in my judgment, many stocks are not too high even at their present level.”

Though Raskob couldn’t come right out and admit that the market was overheated—he had far too much exposure to express anything other than bullish sentiments—he clearly had concerns about where prices were heading. And he wasn’t the only one.

“Who in hell is Charley Michelson?”

Raskob was in the middle of a conversation with Shouse, his new political hire in Washington, as they were setting up the office there.

Raskob was used to knowing the answer to just about anything—and to knowing just about everyone. But the name Charley Michelson didn’t mean a thing to him.

They were discussing Raskob’s idea for planting negative stories about Hoover—to start a smear campaign against the president of the United States. Michelson, said Shouse, was just the man to do it.

Michelson was a journalist celebrated for his sharp, “bitter, slam-bang, aggressive” approach. His pen was a scalpel—precise, devastating, and impossible to ignore. He had a gift for crafting compelling narratives—whether grounded in fact or not—and his crushing turns of phrase were the envy of every hard-charging reporter in Washington.

Shouse hired Michelson and gave him the title of “publicity director,” and Raskob paid Michelson’s salary out of his own pocket. Michelson, then the Washington bureau chief of The New York World, had spent the prime of his career, which coincided with the greatest economic boom the world had ever seen, scratching by on a journalist’s paltry earnings. So when Raskob offered him an annual salary of $25,000—or about ten times what he was accustomed to making in a year—taking the position wasn’t a hard choice.

Michelson had a wiry frame and a restless mind that seemed to be constantly crafting the next biting phrase. He had the look of a man who had seen it all and wasn’t impressed. More often than not, he had a cigarette dangling from his lips. And importantly, like Raskob, he had a healthy distaste for Hoover.

He had made his mark writing stories about highwaymen and train robbers, Indian wars and lost gold mines. One of his first journalism jobs was covering crime for the San Francisco Examiner, which had just been taken over by William Randolph Hearst. Hearst assigned Michelson and a colleague the job of capturing a grizzly bear. Other assignments included interviewing stagecoach robber Black Bart and covering the Spanish–American War in Havana, where Michelson encountered a young British writer named Winston Churchill. Michelson then had the unfortunate luck to be captured by the Spanish, who imprisoned him in Morro Castle, the fortress that guarded Havana’s harbor.

Once released, Michelson, along with the artist Frederic Remington and another reporter, tried to reenter Cuba in 1897. When Remington wired Hearst that he didn’t think there was going to be a war involving the United States after all, Hearst famously cabled back, “Go ahead, you furnish the pictures and I’ll furnish the war.”

Michelson worked for the Examiner until 1918, splitting with Hearst over the newspaper magnate’s antiwar, anti-Wilson stance. After a brief but lucrative job writing a screenplay for a film called The Little Girl Next Door, he became the main political writer at The New York World’s Washington bureau. With his Hollywood payday—about $20,000—Michelson bought a house in Georgetown that his friends dubbed the “Whiteslave Villa.”

The cutthroat, take-no-prisoners style of Hearst publications left a permanent mark on Michelson’s heart and on his prose. As director of the DNC’s new publicity machine, Michelson knew exactly how to hook reporters into amplifying his scathing criticisms of Hoover.

Raskob had delegated the hiring of Michelson to Shouse, keeping himself at arm’s length from its execution. After a brief introductory meeting with Michelson—a formality, really—Raskob stepped aside. If things got messy, he could claim he had merely funded the effort, not orchestrated it. Michelson, for his part, didn’t require direction. He understood the mission, and he attacked it with conviction.

As Scribner’s Magazine later wrote, Michelson “went to it like a fireman to a fire, only his idea was not to extinguish the flames but to build them.”

THIRTEEN

JUNE 4, 1929

“All breathe sigh of relief. It’s done.”

On the evening of June 4, in his hotel suite at the Ritz in Paris, Thomas Lamont recorded those sentences in his diary. After months of negotiations over reparations, a deal on Germany’s war debts had been struck. “Success has come to the Conference.”

It was a momentous achievement: Acting as agents of the United States, a handful of American businessmen had, for the second time in a decade, engineered a payment plan for the beleaguered German government. Wall Street wasn’t merely running the world’s financial system. Thanks to Lamont and his colleagues, bankers had effectively become diplomats as well.

As a testament to the Americans’ influence on the outcome, the agreement was called the “Young Plan” after Owen Young. “Young Plan Is Climax of 10 Years’ Parleys” read the New York Times headline the next morning, describing the role of the American financiers in helping clinch a deal that had until then been negotiated by elected officials.

Lamont announced that the settlement would stretch the reparations payments of about $9 billion over fifty-nine years—an absurdly long duration was the only way a deal could be reached. German reparations payments in the immediate aftermath of the Great War had led to one of the worst bouts of hyperinflation that the world had ever seen. And efforts to enforce the payments had created crises in Europe. Even after the hyperinflation subsided and the German market stabilized, Germany was in no position to pay the reparations without substantial help. The long duration envisioned by the Young Plan—it wasn’t supposed to be completed until 1988—made the Germans’ annual payments low enough to be politically palatable. But it had been an enormous struggle to get there.

“If Hell is anything like Paris and an International Conference combined, it has many terrors, and I shall try to avoid them,” said Jack Morgan. And in typical Morgan fashion, that was exactly what he did, sailing to the Mediterranean and leaving the heavy lifting to Lamont, Young, and others.

As the discussions began, the parties held a formal dinner. Lamont’s wife, Florence, had asked her tablemate, an elderly French gentleman, “Do you like Monet?” He looked at her quizzically. “Ah, but don’t you love Monet?” Mrs. Lamont persisted. Ah! He realized what she was saying: For a moment that lasted for far too long, he thought she was asking him, “Do you like money?”

Lamont wrote to his son Austin on April 14, having returned from Italy to Paris for the negotiations.

The negotiations had taken place at the Morgan & Cie bank in Paris, opposite the Ritz, on the historic octagonal square lined with mansions that had once been home to thirteen French banks surrounding a statue of Louis XIV. But during the revolution, the statue of the king had been pulled down, later replaced by the Vendôme Column, topped with a statue of Napoleon. Nine foreign banks—four of them American—now occupied the historic mansions. One of them was Lamont’s former employer, Bankers Trust.

Lamont believed the obvious solution was for the Americans to forgive some portion of the debt owed to them from the war by the French and the British, who could in turn reduce their demands for reparations from Germany. However sensible this idea, the U.S. government—both under Coolidge and the incoming Hoover—knew it would be politically unpopular and rejected it.

The negotiator for the Germans, the intransigent and volatile Dr. Hjalmar Schacht, adamantly refused to give an inch, insisting the demands by the Allied creditor nations were impossible for Germany to meet, given that it was now faced with runaway inflation and unemployment. Paris-based journalist Sisley Huddleston characterized Schacht as “the most tactless, the most aggressive and the most irascible person I have ever seen in public life.” Schacht went so far as to suggest that Germany might reclaim some of the land it lost during the war if it had to pay what he viewed as excessive reparations.

“The Germans are in a terrible gloom and talk about breaking up the Conference and going home,” Lamont wrote to his son Austin on April 14. “At critical points Germany’s psychology seems to break down pretty badly.”

Exasperated with Schacht’s obstinacy, Lamont was ready to give up, as was the ailing Young. Sarnoff, the founding general manager and co-founder of RCA who was also on the reparations committee, was asked to prepare a message to Washington proposing the American contingent withdraw and return home. Florence Lamont booked passage back to New York on the Mauretania. She had had enough of Europe. Sarnoff insisted that if they walked out, the United States would be blamed for the failure of the conference—as would the House of Morgan. The Americans desperately needed a breakthrough.

Sarnoff told Young and Lamont that he believed an agreement was possible if the Americans curbed some of the creditor nations’ more outrageous demands and encouraged them to recognize the difficulty of the German position. But they had to be firm.

Sarnoff had impressed Young earlier that year with his skill in negotiating RCA’s purchase of the Victor Talking Machine Company, the world’s largest manufacturer of phonographs. The RCA leader had a gift for focusing on the essentials of the key issues and bringing opposing sides together. On the train from Cherbourg to Paris when they first arrived, Young had turned to Sarnoff to help organize the complex financial data for the job ahead.

“David, suppose you try your hand at collating the general plan,” Young suggested. Sarnoff had seized the opportunity and drafted an analysis that was ultimately incorporated into the American plan offered at the opening of the conference. In Paris, Sarnoff, technically an administrative aide, had frequently been called in to help the American negotiators, ensconced in a grand room that had been turned into a makeshift office with four stately desks at the opulent George V hotel, just a block away from the Champs-Élysées.

Lamont and Young conferred. What if they tried a new approach?

“David, since you think an agreement is still possible, why don’t you tackle Schacht yourself?” Young told him. “You have not been involved in the heated discussions, so he can have no animus toward you.”

Lamont agreed. Though Sarnoff was Jewish, and anti-Semitism had been on the rise in Germany, Lamont believed that Sarnoff might break the stalemate.

Sarnoff and Schacht met for the first time on May 1 at Hotel Le Royal Monceau for dinner in the German’s suite. Their “get-acquainted” meeting lasted a grueling eighteen hours. Exhilarated, Sarnoff reported back to the astonished American team that they had outlined a possible settlement, though exact numbers had yet to be put on paper.

Sarnoff was promoted to lead American negotiator, and a fifth desk was moved into the U.S. headquarters room. Lamont wrote in a note to him, “If anyone can do this job, you can.”

Over the next few weeks Sarnoff and Schacht worked on the details of the agreement. One evening Schacht arrived at their dinner meeting red-faced and furious. The humiliated German banker related that he had been invited to dinner by a French family, good friends before the war. “But this morning, the lady called on me in great embarrassment,” Schacht said. “The governor of the Bank of France somehow heard that I was to visit them. He phoned her husband to say that he objected strenuously to my being entertained in a French home and insisted that the invitation be withdrawn. She explained to me in great distress that they had no alternative but to comply.”

Schacht was shaking with emotion. “Mr. Sarnoff, how prejudiced can people be? Here I am, ten years after the war, representing the German government, which is expected to shoulder billions in reparations, to be paid by unborn generations of my people, and yet I am not permitted to dine privately with old friends in a French home!”

After a drink and the first course of the meal, Schacht was visibly less distressed.

“Dr. Schacht, don’t take this exceptional incident so seriously,” Sarnoff told him. “I can offer some comfort in this matter. After all, you’re an amateur in the area of prejudice, but I have had two thousand years of experience with it. Besides, your people are not free from such feelings, either.”

Schacht bristled. There was no racial prejudice in Germany, he insisted. The conversation had become a minefield, threatening to undo their hard-won progress. But Sarnoff didn’t back down.

“Germany is the cradle of anti-Semitism,” he said, citing the burgeoning Nazi movement. As they argued, Schacht suddenly stopped and stared at Sarnoff.

“Do you speak Hebrew?” he asked.

“No,” Sarnoff replied, “but I understand it, because I studied the sacred books in my boyhood.”

“Well, I’m not a Jew,” Schacht said, “but I do speak it.” In excellent Hebrew he began to recite the opening verses of Genesis. Astonished, Sarnoff learned that Schacht had earned his doctorate not in economics, as most people thought, but with a thesis on the Hebrew language. Their mutual respect deepened, and they continued negotiations.

In late May, as Sarnoff was about to leave for a final session to conclude the agreement with Schacht, Lamont and the skeptical Jack Morgan wished him luck.

“David,” Morgan said with great reverence in a telegram, “if you actually bring back a signed agreement, you can have anything you ask for that is within my gift.”

The next morning a weary Sarnoff, who had arrived back at the hotel long after midnight, tossed an envelope on a desk in the American headquarters room.

“Well, here it is,” Sarnoff said with a big smile. The astonished men applauded, shook his hand, slapped him on the back, and expressed their amazement at what he had accomplished. Morgan slipped out of the room to grab a black homburg and returned with it on his head.

“I doff my hat to you,” Morgan said, sweeping the homburg and bowing low in tribute. “And I propose to stick to my promise. Ask for anything you want, and it will be yours.”

Everyone held their breath. Sarnoff could have demanded anything from a partnership at Morgan to a million dollars.

“Yes, I know what I want,” Sarnoff immediately said. “Ever since we met on board ship I’ve admired your white meerschaum pipe. If possible, I’d like you to give me one like it.”

The pipe, made at great expense by an elderly craftsman in London, was delivered within days, before Morgan left to shoot grouse in Scotland.

When the deal was announced, Lamont’s close friend, the columnist Walter Lippmann, praised the group in an editorial: “It is a pardonable form of national pride for Americans to feel that their experts at Paris played an indispensable part in what is perhaps the most successful great negotiation of this age,” he wrote. They had healed the financial wound from the Great War. “No Americans who have returned to it from foreign service in the last ten years have had so great a triumph.”

On the journey home aboard the Aquitania, Lamont took stock of his remarkable achievement from his cabin, B98. He sent thank-you notes and telegrams to the many people who had helped in the effort. Always the consummate networker, he knew the value of relationships, especially those of the spouses of his clients.

One telegram went to Lizette Sarnoff: “I want to send to you my sincerest congratulations upon David’s work. You must already know that for weeks past we relied upon him in extraordinary measure and his work was wonderfully effective and a great contribution to the final result.”

But when New York City mayor Jimmy Walker sent a cable offering to mount a ticker-tape parade up Broadway to City Hall to celebrate their success, Lamont worried about how the optics would play to those who had been on the other side of the negotiating table. “Chief excitement was about Mayor Walker’s invitation to have Citizens Committee meet us at Battery and give reception from City of New York,” Lamont noted in his diary. But, “after canvassing matter decided to decline.” The mayor made a second plea to Young, but he “stood adamant. Didn’t want to take ourselves so seriously and anyway would give bad impression abroad.”

As much as he enjoyed the adulation, Lamont, as a former journalist, was well aware that as easily as the press can build you up, it could also tear you down. And despite all the excitement about the reparations deal, Lamont turned his attention to the markets. Though there was an upturn, Lamont had started to grow troubled, though he didn’t make his concerns public.

In a letter he sent his son before returning to New York, he shared his anxiety about potential market instability. Lamont instructed Tom, who had only become a partner at Morgan five months earlier, to liquidate several large holdings, particularly stock in Chase National Bank, General Foods, and Humble Oil, worth about $4 million. He later told his son to sell six other stock holdings.

“Prices can go lower, so be sure to keep plenty of cash,” he wrote to Tom. “In my spare moments, I keep feeling cash is a good asset.”

FOURTEEN

JUNE 29, 1929

Charles Mitchell walked up the marble steps of The Plaza Hotel just after noon on Saturday, past the horses and carriages that waited outside, acting for all the world as if he ran the place. It was lunchtime at The Plaza, and the titans of finance were making their way in. In the twenty-two years since it had opened, the famous hotel, which sat at the corner of Fifth Avenue and Central Park South, and which had been modeled after a French château, had become both a tourist attraction—famous for its afternoon teas—and a haunt for New York’s business elite.

The doormen and bellhops knew Mitchell well: He was on the board of directors of the real estate company that owned the hotel. He was accompanied by his friend William Durant, who had earned Mitchell’s gratitude after publicly praising him during the CBS radio tirade in which Durant accused the Federal Reserve of stifling the market.

Since then, however, Durant had had very little to complain about—at least when it came to the stock market. As the summer began, it suddenly felt like money was everywhere. The Dow was up 11 percent in the last month alone, closing the day before at an all-time high of 331.65. The prior month and a half had seen uneasy trading, fueled by fears the Federal Reserve might once again tighten the screws on speculation. But its recent silence suggested a more passive posture—just what investors wanted to hear. Wall Street was practically euphoric. And so were many of the diners in The Plaza Hotel.

The two men strode briskly through the lobby toward the restaurant. They passed the entrance to the ballroom, which was undergoing a $200,000 renovation. A few steps farther, they passed the E. F. Hutton brokerage, which had taken over the space of the Oak Room bar, closed due to Prohibition. Gambling on stocks had replaced drinking as a legal intoxicant. Earlier that morning, a stout guest with a gorgeous blonde on his arm had slipped a $20 bill to a bellhop, announcing that he’d just made “a half million on a rail deal and wanted the best suite in the house.”

Mitchell was feeling a hop in his step, too: Just that week, he had received $660,000—his share of the profits of National City’s partners’ fund for the first half of the year.

When Mitchell and Durant entered the elegant main dining room, they spotted another regular: astrologist Evangeline Adams, described as the “stock market’s seer.” She had made a fortune advising people on stock picks based on their zodiac signs; her clients paid her $50 a session for her time. Her newsletter reportedly had one hundred thousand subscribers. She followed what she called the Adams Philosophy, “a compound of truths of all truths, applied in the light of an intelligent optimism to the requirements of Western everyday life.”

Among her famous clients were actors Charlie Chaplin and Mary Pickford; even J. Pierpont Morgan was said to have consulted her for advice. Adams was taken seriously enough that her 1928 book, Astrology: Your Place in the Sun, was reviewed by The New York Times Book Review.

The sixty-one-year-old prognosticator had her own reserved table, which was usually surrounded by several starstruck young men. To a waiter who boldly asked for a stock tip, Adams haughtily replied, “You do not work for nothing. Why expect me to?”

Along with the rich and famous, the dining room bustled with tourists. Many were in town to celebrate the Fourth of July, which was a week away. But the room’s jubilant atmosphere was also due to people streaming in to celebrate their stock winnings after the market’s noon close.

Those in the room who were interested in finance, which felt like everyone, watched Mitchell and Durant as if they were movie stars. The biggest banker in the country lunching with one of the biggest investors—it was as if Laurel and Hardy, who really were among the biggest movie stars of the day, had just arrived. On a musicians’ balcony overlooking the room, an orchestra played. The jangle of dishes and utensils reverberated. It could be difficult at times for diners to hear one another.

Durant had just returned from a trip abroad. Despite the market’s run-up, he couldn’t let go of his bogeyman, the Federal Reserve: “Before I left Paris recently,” Durant said in a statement upon his return, “it was reported that the Federal Reserve Board…had changed its policy with respect to brokers’ loans and the purchase of securities on the partial payment plan…discriminating against our choicest securities, curtailing money about brokers’ loans and interfering any part with business generally, [the Federal Reserve Board] has undermined confidence, so essential to our national prosperity.”

Soon another party of well-known New Yorkers entered the dining room: Al Smith, John J. Raskob, the du Pont brothers, and James Riordan, president of the County Trust Company, who had loaned the Smith campaign $1 million to fund his presidential run.

Amid the bull run for stocks, all these wealthy men—all in the same room—had become the new boldfaced names of the nation. Other diners could not stop gawking.

Mitchell and Durant nodded their greetings at Raskob and the du Ponts as they sat down. They were all among the Wall Street royalty who regularly joined together in pools to play the market. Just a few weeks earlier, a pool in the Anaconda Copper Company had been a huge bust, costing Durant almost $400,000, the same amount he had invested in the RCA pool. Both pools had been managed by Michael Meehan and his cadre of skilled manipulators. But while the RCA pool had been spectacularly profitable, the Anaconda pool cost its investors, who also included Raskob and the du Ponts, serious money.

More recently, Mitchell had used National City’s balance sheet to buy three hundred thousand shares of Anaconda, which he expected his army of salesmen, operating out of fifty-eight branches nationwide, to sell at a profit. It was a risky bet, but the company had been a longtime client of National City. Besides, Mitchell had just become a director of Anaconda and he was hoping that if his sales force did its job, the stock would rise, which would help the company.

Raskob, for his part, had been working with a journalist, Samuel Crowther, on a story titled “Everybody Ought to Be Rich,” which was about to be published in Ladies’ Home Journal. Reaching out to the masses in a mainstream publication—the masses he hoped would soon be his customers—was part of Raskob’s publicity campaign for his new business, the one he’d announced to the press in May. “The way to wealth is to get into the profit end of wealth production in this country,” Raskob advised, promising that with just $15 per month, “wisely invested,” anyone could become wealthy through the stock market within twenty years.

“Proletarians who could invest $200 a head” could participate in his new Equities Security Company. “This plan of equity investments is no mere theory with me,” Raskob explained.

Crowther called Raskob a “maker of millionaires.” He pointed out that Raskob had earlier created tremendous wealth when he founded GM’s Managers Securities Company, composed of eighty senior and junior executives who contributed a total of $5 million and borrowed $28 million. The plan bought equities and distributed profits as GM executives retired or left the company.

Since Raskob had gone public with his plan a month earlier, his proposal had attracted widespread praise. “This is the greatest vision of Wall Street’s greatest mind,” said The Literary Digest.

But there were many skeptics who believed the average wageworker wasn’t ready for the roller-coaster ride that the American stock market had become. For most middle-class people, $15 was a great deal of money, and twenty years was longer than they cared to wait to get rich. After all, the speculators on Wall Street seemed to be able to do it a lot faster.

When a female reporter at The New York Evening World asked Raskob how he could be confident the investment trust would be profitable, he replied, “Young lady, if this [Equities Security Company gains approval to operate] I shall have the advice and counsel of many men who know a darn sight more about finance and industry than I could ever hope to know, and my individual judgment wasn’t so bad. It will be a matter of mutual trust…Invest your money with us, under proper legal safeguards, and we will make money for you.”

Still, Raskob was well aware that the speculative fever gripping the nation required him to be cautious. He planned to launch his company later in the fall, when “the stock market has got back to normal.”

The other diners in The Plaza restaurant may have been throwing caution to the wind, but Raskob had not lost his head. He had begun to worry that the market was overvalued. He had quietly been shorting GM stock and created an elaborate market hedge to protect his other investments. (He also couldn’t resist taking a few fliers, like Warner Bros. Pictures stock, after visiting the movie studios on a trip to Southern California.)

As a champion of the small investor, Mitchell appreciated Raskob’s plan better than just about anyone; indeed, he was probably envious that he hadn’t thought of it first. But like Raskob, Mitchell and Durant had their own concern that kept them from exulting in the market’s rapid gains. In their case, they had become targets of Carter Glass. Newspapers had invoked both of them by name just two weeks earlier when Glass had formally added his amendment to the Smoot–Hawley tariff bill making its way through the Senate. It called for a 5 percent tax on stock owned for less than sixty days. Such an amendment, were it to pass, was guaranteed to crush speculation.

“Let me say, in a word, in presenting the proposed amendment, that I am not undertaking to say that stock gambling, or, in more polite terms, stock ‘speculation,’ is essentially wicked or in any moral sense wrong,” Glass said. “I am simply trying to reflect the view in this amendment that, whether right or wrong, moral or immoral, when stock gambling or stock speculation reaches the stupendous volume which it did reach recently of $6 billion, it constitutes an actual economic menace to the legitimate business of the country. And, if possible, something should be done about the menace.”

For Mitchell and Durant, the amendment amounted to a war not just against them but against all of Wall Street—against the business titans having lunch at The Plaza that afternoon. A group of Wall Street economists estimated that the tax would cost $6.5 billion a year and cut trading on stock exchanges by 80 percent.

While the prevailing view was that the amendment was unlikely to pass the Senate, its introduction alone, Mitchell and Durant feared, could impede the summer bull market. With the orchestra playing, even those at the next table could not overhear what Mitchell and Durant talked about that afternoon. But anyone who had been reading the financial pages could easily guess.

By the middle of July, Jesse Livermore, Wall Street’s most notorious bear, had seen enough. The market’s relentless rise made his favorite pastime of shorting stocks a losing game. In just four weeks, the Dow had rocketed another 8 percent, closing at 341.93.

Rather than continuing to fight the seemingly endless tide of cash flowing into the market, he decided to join it. Though he didn’t give an on-the-record interview, news leaked that “he had lined up on the constructive side of the stock market in a substantial way,” the Wall Street reporter for the Bayonne Times wrote. “Constructive” was a euphemism for betting on stocks going up instead of down.

Livermore, the story continued, “is now declared to have reaped profits of approximately $1,000,000 in the big advance which has taken place in the public utility issues…During the last ten years Livermore has been reported several times to have eliminated himself as a factor in the stock market but somehow or other he always manages to make a ‘come-back.’ ”

Whatever comeback he was making seemed, however, to always come with a setback. Nothing was easy with Livermore. Just as he was celebrating his win in the market, Livermore learned that he was about to end up in a courtroom to defend himself.

For months he had been trying to evade testifying in a lawsuit that had been brought against him. But on July 17, Livermore “was directed by Supreme Court Justice Walsh to testify before trial against him for $525,000 for alleged breach of an agreement,” The New York Times reported. The plaintiffs in the suit claimed that Livermore had promised to invest in the Carbonite Company of America, which was supposed to produce a substance to decarbonize combustion engines. Livermore had responded by claiming the plaintiffs were lying.

To his chagrin, Livermore always seemed to be in the middle of a lawsuit. As one of the best-known figures on Wall Street—and one involved in dealings that were often speculative—he was an attractive legal target for those looking for money.

The most outrageous suit brought against him was related to the so-called Boca Raton crash of 1926. A project orchestrated by two brothers, Addison and Wilson Mizner, which promised the most luxurious resort in the world in the new city of Boca Raton, had used the names of Livermore, the du Ponts, and others to promote their land sales. Livermore had pulled out of the deal after discovering that the Mizners were running a scam. Almost one hundred of the people the Mizner brothers had defrauded sued Livermore and the du Pont brothers for $1.45 million, in one of the lengthiest complaints—some 870 pages—ever filed.

In the end, Livermore would do what he always did: settle. He couldn’t be bothered with all the back-and-forth. It was too emotionally taxing. He just wanted to focus on the markets.

Despite his fame, he was consciously retreating from the spotlight. The Bayonne Times article that revealed Livermore’s profitable long positions noted, “He is more inclined to sit in the background and work rather than do things in his old time sensational manner.”

As Charles Mitchell neared the end of his daily five-mile walk to work on the morning of August 12, he realized something was different. With the Dow up another 8.5 percent since the summer began, the downtown streets were packed not with the familiar pages and messengers but rather with tourists, visitors who seemed to be looking for something intangible, the whiff of money, perhaps. Wall Street sightseers often drifted toward Wall Street, but not in these numbers.

At 55 Wall Street, the entrance to National City Bank, a scrum had gathered. When they glimpsed Mitchell, sweating after his stroll in the summer sun, the crowd clapped and screamed out questions, forming a passage for him to make his way to the door.

Mitchell smiled and acknowledged the celebrity welcome.

Exchange superintendent William Crawford, who handled the mechanics of the market and rang the starting bell each morning, had never seen anything like it. It made him uneasy. “The whole world for some reason wanted to be here,” he said. People standing in line told him they were waiting to get good seats in the customer rooms for a clear view of the quotation boards, so they could watch their “winnings” mount. The rising market, Raskob’s promises about getting rich, and the new, much faster tickers installed at the Exchange, brokerage houses, hotels, and other locations around the country had lured throngs of inexperienced investors to the center of the world’s hottest stock market.

From a window on the second-floor office at the bank, Mitchell could see the milling crowd growing even larger. He could also glance up and see the handsome new thirty-eight-story headquarters of Albert Wiggin’s Chase National Bank, barely one block north at 18 Pine Street.

Chase, Mitchell’s biggest rival, had just moved into the building the past summer. Though Wiggin and Mitchell had very different personalities—Mitchell was all kinetic positivity, while Wiggin was analytical and professorial—they shared the same empire-building impulse. Speculators loved Wiggin, possibly even more than Mitchell. His profligate lending earned him the nickname “Albert the Munificent.” But he was a serious dealmaker, too. With Rockefeller money behind him, Wiggin had absorbed a half dozen sizable New York banks to make Chase the second largest in the country, effectively putting Mitchell on notice: I’m coming for you.

But that August day, Mitchell was not worried about Wiggin. And for good reason: He harbored a plan that would leave Wiggin in his wake. For the last three years, Mitchell had been plotting a takeover of the Corn Exchange Bank, a prize he’d coveted since 1926. With National City’s stock soaring to dizzying heights—which he hoped to use to make the acquisition—he sensed the perfect moment to finalize a deal. It would catapult his bank to be the biggest in the world. With the market continuing to rise, he hoped to soon unveil his masterstroke.

By August Carter Glass’s summer of protest against the unwillingness of Congress, the Hoover administration, and the Federal Reserve to stop speculation was coming to an end. He had risen to his feet in the Senate to denounce fools and scalawags, then returned to his estate in Lynchburg to write letters, tend to his cows (he liked to say that he preferred his herd to humans), and fume some more.

He continued to focus his ire at Mitchell. When the banker “defied the board and publicly avowed that his obligation to the stock gamblers was superior to his obligation as a sworn officer of the Federal Reserve system,” Glass told the Senate, “what the board should have done was to have incontinently kicked that fellow out of his position before noon of the day upon which he made that announcement.”

That month, The New York Times published Glass’s screed against an economist friend of Woodrow Wilson named Dr. Royal Meeker, who had given a speech warning that if Congress succeeded in checking speculation, it would “choke the arteries of modern economic life and reduce civilization to cannibalism.” To Glass, Meeker was simply a stand-in for Mitchell, one who had the temerity to call speculation as “productive as growing corn or manufacturing plows!”

“I own stocks and proprietary interests in newspapers, banks, hotels, farms, foundries and other productive enterprises,” Glass wrote. “But I have never acquired the habit of betting at one hour that the value of these interests will be greater or less the next hour or the next day or the next month.”

For the Federal Reserve to allow its funds to be used for such purposes was a clear violation of the law, he argued, referring to section 13 of the act he helped create, which narrowly defined the loans the Fed could make to “actual commercial transactions.”

“This may be ‘cannibalistic’ in the opinion of Dr. Meeker,” Glass wrote in his opinion piece in The New York Times. “It may be ‘outrageous’ in the opinion of that prize stock gambler who has not sense enough when he talks to imitate the laconic example of Balaam’s ass. Nevertheless, this prohibition is, designedly and actually, the law.”

Everywhere, it seemed, were the signs of economic exuberance.

On the 17th of August a commotion broke out at Manhattan’s Pier 86 at Forty-Sixth Street on the Hudson. Michael Meehan, the RCA pool operator, was launching the first oceangoing brokerage, a branch of M.J. Meehan & Company, which was quartered on the Leviathan, bound for Cherbourg and Southampton. The Dow had hit another all-time high—361.49. Stock trading was now about to take to the high seas.

Meanwhile, in a development that captured the spirit of the moment—and that everyone was talking about—Jack Morgan was building the biggest private yacht the world had ever seen: 343 feet long, fully air-conditioned, with accommodations for eighty-two passengers and a crew of seventy-six. To make way for it, he had donated his beloved yacht, the Corsair III, to the U.S. government. It was the ultimate sign of the era’s exuberance—proof that even the House of Morgan wasn’t immune to the fever of one-upmanship that had gripped the country.

The new boat, which was to be called the Corsair IV, was being constructed at Bath Iron Works in Maine at a cost of $3 million. Jack’s Corsair IV was the fourth vessel owned by the Morgan family to bear that name since his father bought the first one in 1882. The name itself, referencing the historic villains of the high seas, was an uncharacteristic bit of humor. It was said that Jack Morgan used to fly the Jolly Roger above the American flag.

It was a bit of family lore that when asked how much he spent on his boat, Morgan the Elder replied with a remark that would be echoed for years to come: “If you have to ask, you can’t afford it.”

The journalists who had gathered at the Hotel Biltmore, Al Smith’s headquarters, had no idea why the former governor had called a press conference on August 29. But Smith was always good copy, so they dutifully showed up.

“Well, I’m back in business,” Smith told the room. “In fact, I’ve been back in business just two hours. It was just about that long ago that I signed up and got into a position where I could tell my plans.”

Smith then laid out his next career move: He was going to become the president of a new company that would build “the largest office building in the world and the largest single real estate undertaking in the country.”

It was to be called the Empire State Building.

“I’m to be an Irish landlord,” Smith said. The company he would run had bought the old Waldorf Astoria on Thirty-Fourth Street and Fifth Avenue, which had been the reigning temple of money, status, and fashion before The Plaza upended it. Smith said he planned to demolish it to build a skyscraper to the heavens.

“The building,” Smith said, looking down at his prepared statement, “will be close to one thousand feet high, the equivalent of the length of five city blocks.”

Smith, flanked by his bodyguard, told the press that the building would be so large, “it can house at one time more than sixty thousand people, which is about half the population of the city of Syracuse, enough people to match the population of the city of Troy, three times more than the population of the city of Watertown, ten thousand more than there are in the city of Binghamton and three times as many people as are to be found in the largest village of the State. Only twenty-four counties out of sixty-three in the whole state have a population in excess of the number of people that can be housed in this building.”

He said he had not hired an architect yet but described how “the building will occupy a plot of land in the very heart and center of Manhattan Island, being but two blocks from the Pennsylvania station and eight blocks from the Grand Central Terminal. It is directly on the line of the proposed crosstown vehicular tunnel.”

One of the journalists yelled out a question: Might a broadcast station use the top floor? “Not that I know of yet,” he replied. “It just occurred to me what a dandy place it would be for one.”

Smith held on to one secret about the building: Though he was the one holding the press conference, the new building was the brainchild and massive investment of another man who wasn’t even in the room that day: his close friend and political ally John Raskob.

While the stock market continued its ascension, Bernard Baruch was hunting grouse in Scotland. Yet he couldn’t get his mind off stocks. He sent a cable to Mitchell asking his thoughts on the market. Even a failed $1 million investment in a Cuban sugar property, recommended by Mitchell, had not dented his regard; Baruch still trusted his banker’s advice. With the market’s almost vertical rise—on the last day of August the Dow hit yet another high of 380.33, now up 27 percent for the year—Baruch was seeking some on-the-ground perspective from Mitchell.

“General situation looks exceptionally sound with very few bad spots such as rubber,” Mitchell responded. “Believe credit situation practically unaffected by discount rate action. Money seasonably weak. Should strengthen as month closes. Strength in stock market centers largely in specialties, which in many cases seem unduly high, while there are many stocks, such as copper and motors and certain rails that look unjustifiably low. I doubt if anything that will not affect business can affect the market, which is like a weather-vane for pointing into a gale of prosperity. Believe there is less pessimism around than when you left.”

Summer was usually a slow time for stock trading, but not this summer: Trading volume had broken all records as the market kept going higher.

Perhaps not surprisingly, Livermore was one of the few investors who didn’t share in all the optimism. His nature was to be skeptical, and after his much-ballyhooed capitulation to the bulls, he was edging back to his familiar stance. He saw stress gathering in the fragile seams holding the boom together.

As he often put it, “Have patience and wait.”

FIFTEEN

SEPTEMBER 2, 1929

On Monday, September 2, with markets closed for Labor Day, New Yorkers headed for the beach to escape a historic heat wave. Facing a slow news day, a local reporter called oracle Evangeline Adams to survey her thoughts on the stock market. As befitting her increasingly prominent role in New York society, she had relocated her office to Carnegie Hall.

“The Dow Jones could climb to heaven,” the astrologer replied. The next day the euphoric stock market hit another all-time high, with the Dow Jones Industrial Average reaching 381, double its level in early 1928. Two days later stocks set a record for number of shares exchanged.

Meanwhile Roger Babson, a slim, almost frail-looking economist who had started a college that he named for himself in the Wellesley Hills of Massachusetts in 1919, saw something different in the numbers—and he intended to raise the alarm that the market was blind to the risks building up in the economy.

Over lunch on his campus, Babson hosted the sixteenth National Business Conference, opening with this provocation: “Sooner or later a crash is coming which will take in the leading stocks and cause a decline of from 60 to 80 points in the Dow Jones barometer.”

Babson had been saying much the same thing for more than two years, but today he delivered his message with a greater sense of urgency. “Fair weather cannot always continue,” he told the conferees. “The economic cycle is in progress today, as it was in the past. The Federal Reserve System has put the banks in a strong position, but it has not changed human nature. More people are borrowing and speculating today than ever in our history. Sooner or later a crash is coming and it may be terrific. Wise are those investors who now get out of debt and reef their sails. This does not mean selling all you have, but it does mean paying up your loans and avoiding margin speculation.”

Babson, The New York Times reported, pointed out that over the past year the forty leading stocks had gained 42 percent, “while the number of declining stocks has steadily increased,” countervailing the optimism. “Sooner or later the stock market boom will collapse like the Florida [land] boom,” Babson asserted. “The time is coming when the market will begin to slide off, sellers will exceed buyers, and paper profits will begin to disappear. Then there will immediately be a stampede to save what paper profits then exist.”

“As soon as word gets abroad that the large American investment trusts are selling, the European houses will begin to sell out their customers who are now buying in the American market. The general public then follows with a desire to cash in, then margin accounts will be closed out, and there may be a stampede for selling which may exceed anything that the stock exchange has ever witnessed.”

This time, Babson’s warning found traction. Within hours his words made their way to the Dow Jones ticker, which spread the message throughout Wall Street in short bursts of text interspersed with stock quotes. The market’s plunge of 3 percent was called the “Babson Break” and some investors worried it was an omen of things to come.

Dubbed the “Prophet of Loss,” Babson became an overnight sensation. There was an undeniable ring of truth to what he said. For anyone willing to take a close look, the American economy was clearly softening. Over the summer, steel production and rail freight had started to dip. After hitting a high point in June, the Federal Reserve’s monthly Index of Industrial Production wobbled downward. By themselves, none of these figures was a major cause for concern. But taken together with the stock market’s steady upward climb, it made for a troubling picture. The market had experienced nearly seven years of uninterrupted growth. Few investors seemed the least bit prepared for the consequences of a slowdown.

Babson wasn’t the only one to worry. Walter Sachs, a member of the family that had founded the investment bank Goldman Sachs, had spent the summer in Europe, unaware that the firm’s top banker, Waddill Catchings, had been investing the firm’s public fund, Goldman Sachs Investment Trust, in increasingly risky assets. When he returned to New York, he rushed to Catchings’s apartment to tell him he was “crazy.” Catchings retorted: “The trouble with you, Walter, is that you’ve no imagination!”

In the early weeks of September, the market shook off Babson’s foreboding and investors with an “imagination” were winning again. Wall Street, along with its friends on the business pages, much preferred the outlook of Yale professor Irving Fisher, described by the Los Angeles Times as “one of the nation’s leading economists and students of the market.” He had become an intellectual celebrity of sorts for his groundbreaking work on monetary theory. But what people loved most about Fisher was his unwavering, plainspoken optimism. He was not some mealymouthed academic muttering about storm clouds. He was a man who understood the times and spoke with a sense of confidence.

“Stock prices are not too high and Wall Street will not experience anything in the nature of a crash,” stated Fisher on September 5. “We are living in an age of increasing prosperity and consequent increasing earning power of corporations and individuals. This is due in large measure to mass production and inventions such as the world never before has witnessed. The rapidity with which worthwhile inventions are brought out is the result of the tremendous research laboratories of our great industrial concerns.”

A prominent stock exchange house sent a telegram to its customers to calm the roiled waters: “We would not be stampeded into selling stocks because of a gratuitous forecast or a bad break in the market by a statistician. The market has been advancing for three years, in spite of the bearish utterances of such authorities. No sane man expects widespread advances to continue indefinitely. The market itself will furnish the best clue as to its future course, and will give warning of its culmination in plenty of time for the average trader to protect himself when necessary; but it seems to us idle to cite as a bearish factor the circumstance that the market does not act as a unit. It never has acted as a unit since 1924, and it never will again, because with 2,000 issues creating turnovers daily of 5,000,000 shares, the rules and habits of speculation that govern a 400,000-share day with 300 active stocks no longer apply. Money will check speculation sometime in the future and nothing else will. It is anyone’s guess as to when this will happen.”

The market promptly resumed its advance. But something seemed different: Unusually large transactions were keeping it aloft. Stocks were being bought and sold in big blocks every day—twenty-five thousand shares of GM at 76, followed by several blocks of ten thousand shares each. Stocks that had crashed after Babson’s warning were now soaring.

Driving much of the stock buying was an explosion in brokers’ loans to customers, now adding up to some $137 million in a day. Speculators looking to make quick trades had easy access to credit. A staggering $8.5 billion in bank funds had flowed to brokers linked to the New York Stock Exchange for the year so far, more than double the total of the previous year. And it wasn’t just brokers lending money to investors—American corporations and foreign companies were pouring their profits into the call money market, chasing short-term yields of up to 20 percent. Who could say no to that kind of return?

President Hoover, now in the job for six months, was fully in the Babson camp. The roaring market unnerved him. He blamed the Federal Reserve for its paralysis in the face of unchecked speculation, but he also believed it was too late to suddenly impose credit restrictions without undermining legitimate business needs.

The president had had personal experience with speculation earlier in his life, a matter he kept private. Once he had advised a friend to buy a stock only to watch its price collapse. “To clear myself,” Hoover told friends, “I just bought it back and I have never advised anybody since.”

Hoover was also reluctant to criticize publicly the laissez-faire policies of Calvin Coolidge that he believed had led to the current market speculation, because doing so would disparage his own treasury secretary, Andrew Mellon.

From the moment of his announcement that Mellon would stay on in the cabinet, public disapproval of the treasury secretary had mounted. Given his huge wealth and stock holdings, Mellon was obviously conflict-ridden, his critics said. And just as Hoover had suspected, Mellon had so alienated certain powerful factions in Washington with his brusque, condescending style that he had to get a waiver to have him take the job without getting confirmed. Hoover’s own attorney general had to come to his rescue, determining that “Mellon is not disqualified from holding the office” because he owns stocks. He justified his view by saying that if stock ownership was disqualifying, “modern conditions would probably exclude from the office a great majority of the men most competent to hold and administer it efficiently, without accomplishing any good.”

But by September, Hoover and Mellon had practically given up on each other, at least privately—and the public was starting to hear hints of the tension. Over the summer, the White House had to deny a report that there was a rift between them over tax policy. And then the White House was forced to issue a statement refuting a detailed news report that Mellon would soon resign.

“Mr. Mellon has promised the President to remain in office for the next three-and-a-half years”—that is, the remainder of Hoover’s first term. Mellon laughed when questioned about a report he would resign. “That only shows that they are trying to write of something about which they know nothing,” he said.

On September 18, at the president’s request, Thomas Lamont traveled to Washington to meet with Hoover at the White House.

Lamont had been busy since returning from Europe. In early September, the House of Morgan had finalized financing for another new holding company, along the lines of the Alleghany and United corporations, under the Standard Brands umbrella. The corporation included Chase & Sanborn Coffee, Fleischmann’s Yeast, Royal Baking Powder, and other food products. Once again, Lamont and his team sent out notes to their favored friends and clients offering them a special discounted price—just like he did before he set sail in February on the Aquitania—in this case, at $32 a share when the stock was worth at least $10 more. Baruch, Coolidge, and, of course, Lamont and his son were among those who bought the discounted shares and quickly sold them at anywhere from $37 to $44⅜.

Among all of Lamont’s official and unofficial duties, the thing he enjoyed the most was giving advice to important figures like Hoover, whose popularity since being sworn in continued to remain on solid ground. At its recent meeting, the Republican National Committee had concluded that America was prosperous and quite pleased with Hoover’s policies.

Though the House of Morgan had never embraced Hoover as its man, Lamont had been working to get close to him ever since Coolidge decided against running and Hoover had emerged as the favorite to succeed him. When Lamont was in Paris, right after Hoover was inaugurated, Lamont wrote to Hoover saying, “I wanted to pay my respects and to offer good wishes for a successful administration,” adding, “I shall with your permission and at your convenience go to Washington soon after my return from home.”

Lamont was thrilled to be in the presence of Hoover and even more tickled that the president had wanted to know Lamont’s take on British Labour Party leader Ramsay MacDonald, who had recently become prime minister. The new prime minister was scheduled to arrive in the United States for meetings in early October and Lamont knew him well. Ever the client-centric banker, Lamont followed up his meeting with Hoover by sending a note—in hopes of keeping open this new special line he had to the president—to tell him that MacDonald was a person of “excellent good will, high ideals” and winsome charm, but also to warn him that, in his experience, MacDonald was “pretty sketchy and lacking in thoroughness in his handling of even very important questions. I think he is apt to ‘kiss’ a thing through if he can…”

Of course, Lamont’s real hope was that the relationship with Hoover would manifest in ways that would allow Lamont to advise the president on the nation’s most pressing issues of the day. That was the whole game for Lamont—opening lines of communications, establishing trust, and then using that trust to further his influence.

Just before midnight on September 20, Charles Mitchell and his wife, Elizabeth, boarded the Olympic for a four-week vacation. Buttonholed by a reporter on the main companionway on the A deck, Mitchell said his goal for the trip was to rest. He was exhausted from working around the clock.

Earlier that day, stocks had fallen amid rumors that a major English corporation was in danger of collapsing and that interest rates would rise as a result. The Dow had fallen 5 percent from the high to 362.05.

“Money is all right,” Mitchell told the reporter.

Andrew Mellon and his son boarded the ship at that same moment. Mellon and Mitchell shook hands, then continued to the B deck, chatting as they went. Declining to offer comment, Mellon later departed the liner after seeing his son installed in a first-class cabin.

Mitchell, though, had more to say before the captain cast off. “There is nothing to worry about in the financial situation in the United States,” he told members of the press.

The truth is Mitchell was not just reassuring the public but himself as well, as he could not fathom any alternative but a rising stock market. He simply had too much at stake.

Just days earlier, Mitchell had clinched the headline-grabbing deal he had been plotting for years to merge National City with the Corn Exchange Bank, thrusting him—and the bank—into a new stratosphere. Walter E. Frew, chairman of the Corn Exchange Bank, had phoned Mitchell to accept his proposal for a merger by an exchange of shares or cash. The deal was announced on September 19: 484,000 shares of National City, the largest financial institution in the Western Hemisphere, would be exchanged for the 605,000 outstanding shares of Corn Exchange.

Mitchell, already considered a hero for intervening in the stock market back in March, was now being compared to a king: “The Ruler of the World’s Largest Bank” was the title of a lengthy laudatory profile in The New York Times.

Chase and National City were now the titans. National City Bank’s assets exceeded $2 billion, with deposits totaling $1.649 billion. The bank’s merger with the Corn Exchange Bank would raise its number of branches nationwide to 201, a dominating presence.

Shareholders still had to approve the deal, but stocks in both banks had only taken small hits in the market since the announcement. National City closed at $489 a share, and the Corn Exchange Bank closed at $375—giving Mitchell confidence that his bank’s stock would remain above the target level of $450 per share required for the exchange. If they fell below that, National City would have to make up the difference in cash.

While on vacation, Mitchell visited Germany, promoting epic projects like the “future financing of Zeppelin lines.” The first dirigible had just circumnavigated the globe. This looked like a technology poised to take over the world.

In Berlin, Mitchell celebrated his fifty-second birthday. Colonel Sosthenes Behn, chairman of ITT, was also in the German capital then with about a dozen executives of his organization, and gave a daylong party to honor Mitchell. It began with a round of golf, then moved to a large chartered boat well stocked with frankfurters, hams, cheese, and other German delicacies to cruise the beautiful Wannsee. That evening Behn hosted a dinner at a small hotel on the lake, with the festivities topped off by a huge birthday cake in the shape of the National City Bank’s Wall Street headquarters.

Both Behn and Mitchell had their futures tied to deals yet to be approved—Behn’s, the ITT-RCA merger, which antitrust law required Congress to approve; and Mitchell’s, the acquisition of the Corn Exchange Bank, which was to be voted on by its stockholders.

On September 22, Jesse Livermore sat at the carved antique desk in the library of his New York apartment, sipping whiskey and putting to paper the experiences and wisdom he had accumulated in the stock market over thirty years.

“For the professional,” Livermore wrote, “the most dangerous time of all is when the market seesaws under the influence of unknown forces. It is no place for the amateur.”

Livermore had been encouraged by Edwin Lefèvre, a journalist who covered Wall Street, to write a guide to investing. In 1923 Lefèvre wrote Reminiscences of a Stock Operator, a fictionalized autobiography inspired by the life and trading theories of Livermore. He told Livermore that the masses of small-time investors “cluttering up” Wall Street were “a menace to themselves and the professionals in the market.” They needed a practical guide from an expert like him.

Livermore declined Lefèvre’s offer to ghostwrite the book; some secrets he had no intention of sharing. But he was intrigued by the idea, so much so that he began taking notes for his own book. For decades, he had been seeking to identify patterns and articulate his theories of how human nature drove market fluctuations.

And now, Livermore could see new patterns amid the market’s latest gyrations. During the so-called Babson Break, he shorted the market and made $1 million. And with the market seesawing, he saw the chance to make millions more.

Livermore was in a mellow mood, the luxurious library an ideal atmosphere for his creativity to emerge. His wife, Dorothy, sat nearby, contentedly tucked into a plush armchair, watching him scribble. After filling several pages with ideas, he asked if she wanted to hear what he had written about his cardinal rules for investors so far. She nodded eagerly and he began.

“Take small losses. Profits always take care of themselves. But losses never do. The speculator has to insure himself against considerable losses by taking the first small loss. In doing so, he keeps his account in order, so that at some future time, when he has a constructive idea, he will be in a position to go into another deal, taking on the same amount of stock as he had when he was wrong.”

Dorothy listened attentively, occasionally asking a perceptive question. Their give-and-take was reminiscent of the early days of their relationship, when their romance was fresh.

A few weeks earlier, in a titanic clash, they had exchanged threats and accusations built up over a decade of tumultuous marriage. Dorothy, known as “Mousie,” complained about his lack of attention and affection. Livermore bemoaned her drinking, grumbling that she’d let herself go. The former Ziegfeld beauty, once radiant and poised, now bore the weary signs of age and indifference. On into the night they fought, until finally, exhausted, they began to actually talk, to share their feelings, with each promising to do better for the sake of their love, their marriage, their children. Livermore had finally fallen asleep in a chair, still fully dressed.

The next morning, he awoke and stumbled out to meet his chauffeur, who was as prompt as always. He arrived at his Midtown headquarters in a rumpled suit, raising eyebrows among the staff. But he showered, then dressed in one of the immaculate suits he kept at the office, and faced the day with enthusiasm.

Since their quarrel he and Mousie had renewed their passion. He started calling her during the day, sending her little presents, and stopped staying out until all hours; Dorothy cut back on the cocktails and began paying more attention to her appearance. The tranquility between them had inspired them both. They declined invitations to dinners and soirees in order to stay home and enjoy each other’s company, as they did while Livermore now continued reading from his legal pad.

“Don’t trade every day. There are only a few times every year, possibly four or five, when you should allow yourself to make any commitment at all.”

Dorothy asked him about the notes and various newspapers he had strewn about the library. He’d circled a story reporting on the arrest of the famous and until now wildly successful British financier Clarence Hatry, recently charged with “conspiring to obtain money under false pretenses.” Livermore told her about three secret messages he had received earlier in the month from one of his sources in London.

The first missive said “a high official” in the Bank of England that day—September 4—told friends at lunch that “the American bubble has burst.”

The second conveyed the news that Bank of England governor Montagu Norman wanted to raise the interest rates before the end of September; Livermore knew that would divert money from Wall Street to London.

The third reported that financier Hatry was facing ruin. Livermore didn’t understand why Hatry hadn’t sought help from Wall Street to rescue his empire. His arrest portended bad news for the London Stock Exchange and every other market where the British dominated: Canada, Australia, Shanghai, Johannesburg. The European exchanges had already reacted badly.

That final bit of news had prompted Livermore to short U.S. Steel, GE, and RCA, netting him a tidy sum.

He read aloud again from his notes to Dorothy: “The stock market is a mirror whose function it is to provide an image of the underlying or fundamental situation. Cause and effect run from the economy to the stock market, never the reverse. An unstable economy can be disturbed by all kinds of incidents that on the surface appear extraneous.”

Livermore continued to scribble. He and his staff had to be prepared, in the words of an aide, at their “battle stations.”

SIXTEEN

OCTOBER 2, 1929

On October 2, 1929, John Raskob organized lunch for a group of nine men at his apartment at the Carlton House on East Forty-Sixth Street. They were there, they thought, to discuss the topsy-turvy market and what they could do to restore investor confidence. The Dow had fallen 10 percent since Labor Day. The assembled cast included some of the richest men in the world—William Durant, commodities kingpin Arthur Cutten, and the Van Sweringen brothers from Cleveland.

One guest, however, wasn’t as well-known to most of the others. It was unclear why the architect William Lamb had been invited, but if anyone thought much of it, they were too polite to question his presence. Raskob always introduced little surprises, as he enjoyed keeping friends and associates on their toes.

Raskob was no blithe optimist. He had recently been cutting back his own exposure to the market, selling some stocks, and did not believe that a recent rally was cause for relief in the near term. But there was a risk of investors becoming too cautious and threatening a future that remained as bright as ever. That was an attitude they all needed to dispel. “In a healthy market we prosper,” Raskob told the assembled group. “In a sick market we suffer.”

As the guests absorbed his message, Raskob slipped away with Lamb to an adjoining room. A few moments later both men returned with a large model of Raskob’s new obsession, a majestic tower he called the Empire State Building.

News of the building had been announced, of course, by his friend Al Smith a little over a month earlier, but Raskob had stayed deep in the background.

Now Raskob was stepping forward to assert his personal authorship.

“Gentlemen,” he said, “this is part of what I have at stake. A monument to the future.”

His message to the group could not have been clearer. Whatever jitters were roiling in the market, whatever the doomsayers were predicting, none of that was going to have an impact on Raskob’s long-term vision. A decade earlier he had embraced the potential of the automobile to become a staple of American life, and he had been right. Now he was putting his faith in the growth of the great American city.

He was not the only one promising to reach the heavens with limestone and steel. Manhattan was already home to many tall buildings. In the 1920s New York City had become a fundamentally different place than other American cities. By 1929 it had 2,479 buildings of ten stories or more (Chicago had the second most, with just 449). Of buildings twenty-one stories or higher, New York had 188, while Chicago had 65.

Manhattan’s soaring new skyline had become a major source of civic pride, an expression of the tremendous wealth creation that emanated from Wall Street. In 1925, of the 207 Americans who reported personal incomes of more than $1 million, 96 were New Yorkers.

Since 1913 the mantle of “tallest structure in the city” had belonged to the fifty-five-story Woolworth Building, near City Hall. Though the company needed only a handful of floors for its headquarters staff, it had been among the first to grasp the full public relations value of a construction project as a contest of height. The boom in development was moving so quickly that the Woolworth Building already seemed quaint and old-fashioned, like an icon of a past age. It was about to be surpassed by Walter Chrysler’s great Art Deco monument to himself at the intersection of Lexington Avenue and Forty-Second Street, which was nearing completion in the fall of 1929. It would eventually exceed one thousand feet, though Chrysler had kept its final height a secret to frustrate potential competitors.

The builders of these new skyscrapers were often men with no experience in the construction business. Unlike other industries, though, lack of experience was not a hindrance. All you needed was money, a dream, and a huge ego. John Raskob had all three. He also had a strong desire to do something for Al Smith, who was badly in need of a job to support his lavish lifestyle after losing to Hoover. And Raskob had another personal incentive for making his building the tallest. When his future was in doubt at General Motors, there was speculation that he might land at Chrysler, then one of Detroit’s hottest new automakers. That never materialized, but he now had the chance to prove that he wasn’t second best to Walter Chrysler, or to any man.

All he asked from his guests at the luncheon was that they keep buying stock and talking up the market. “Gentlemen,” Raskob said, “a country which can provide the vision, the resources, the money and the people to build such an edifice as this, surely cannot be allowed to crash through lack of support from the likes of you and me.”

SEVENTEEN

OCTOBER 6, 1929

The British statesman Winston Churchill arrived in New York on October 6, 1929, accompanied by his brother and their sons, and checked into The Plaza Hotel. His old friend, the financier Bernard Baruch, covered his hotel and other expenses, including cigars and brandy, and set him up with a desk in Baruch’s own office at the Equitable Building at 120 Broadway.

After eight weeks of traveling across North America, from Quebec to Seattle to Los Angeles to Chicago and finally to New York—his transport arranged by wealthy Americans and entertained at every opportunity by flush investors—Churchill had become swept up in stock market fever.

Churchill was something of an enigma to Manhattan business leaders and socialites. Though impressed with his intellect and his aristocratic style, they couldn’t decide if he was a man of genuine influence and probity or merely the latest in a long line of flashy Englishmen with a knack for charming Americans. Baruch’s endorsement couldn’t necessarily be trusted, either. He had a penchant for ingratiating himself with politicians, befriending them and ultimately becoming more influential in the process. Churchill, for his part, was fascinated by the booming U.S. economy and wanted to “meet the leader of its fortunes.”

Earlier that summer, Baruch had relayed a proposal to Churchill from an American university to pay his expenses for a trip to North America in exchange for four lectures, and the British leader had eagerly accepted. After the defeat of the Conservative Party in the election of May 1929 in which Ramsay MacDonald became prime minister, Churchill, who had served as chancellor of the exchequer, needed a break—and more important, an opportunity to shore up his bank account. Politics didn’t pay: He was overdrawn in his checking account by £8,000 and owed £1,000 in overdue taxes, with another £4,000 tax bill on the way. Both of Churchill’s literary agents—one in New York and one in London—had advised him to visit North America to build his audience on the other side of the Atlantic.

Baruch and Churchill had first met when President Wilson dispatched Baruch to Paris in 1919 as a member of the first team to negotiate reparations from Germany, called the Supreme Economic Council, at the Paris Peace Conference (also attended by Thomas Lamont).

They forged a friendship, with Churchill relying on Baruch, whom he called “Barney,” for the latest political gossip from America, as well as hot stock market tips.

Though Churchill, as exchequer, had overseen the UK’s public finances, the British statesman had little expertise in managing his own funds. In truth, he was hopeless at it.

“He knew nothing of what he was doing,” according to John “Jock” Colville, his private secretary. “To him it was like playing roulette at Monte Carlo.”

While it had been thirty years since the fifty-four-year-old Churchill had last visited America, he still paid close attention to the nation’s politics and shifting culture. When Hoover trounced Al Smith, Churchill wrote his wife, Clementine, “So Hoover has swept the board. I feel this is not good for us. Poor old England—she is being slowly but surely forced into the shade.”

Clementine wrote back, telling him that he would need to change his attitude if he was ever going to become foreign secretary, which was his current ambition. “I’m afraid your known hostility to America might stand in the way. You would have to try and understand and master America and make her like you.”

Baruch orchestrated every detail of Churchill’s three-month trip, arranging for him to meet leading financiers and politicians and other noteworthy people, especially those who might be willing to underwrite his travel expenses. Churchill’s lavish tastes were well-known. Even as an officer deployed to the field in the Great War, he insisted on having a private bathtub and delicacies imported from England, and of course, brandy and other spirits.

On August 3, wearing a brown suit, his customary trilby hat, and spats, and carrying a cane with a silver knob, he bade farewell to friends at Waterloo Station in London, accompanied by his eighteen-year-old son, Randolph; his brother, Major Jack Churchill; and his twenty-year-old nephew, John. “It’s purely a pleasure trip I am going on,” he told the press, “and I am looking forward to it with the keenest joy.”

He boarded the Empress of Australia, a Canadian-flagged steamship, to Quebec, where Churchill’s entourage crossed the country in a luxury carriage, the Mont Royal, provided by the head of Bethlehem Steel, Charles Schwab.

“Jack and I have large cabins with big double beds and private bathrooms,” Churchill cabled his wife, Clementine. “There is a fine parlour with an observation room at the end and a large dining room which I use as the office.”

Surrounded by luxury, and inspired by the prosperity and optimism he encountered, so different from that of war-weary England and Europe, Churchill saw moneymaking opportunities in Canada and the United States seemingly everywhere he turned.

“There is a stock exchange in every big hotel,” he wrote Clementine. “You go and sit and watch the figures being marked up on slates every few minutes.”

He wired his London publisher to request an advance of £2,000 against his royalties so that he could buy shares in two small Canadian oil companies.

Taking a train south along America’s Pacific Coast, “The Churchill Troupe”—Winston’s own sobriquet—was forced to bunk like ordinary people. “I am lying in the top berth of our compartment,” Randolph wrote in his diary. “Papa is unpacking and swearing down below. We miss the Mont Royal.”

He traveled to San Simeon on the Pacific Coast to visit publisher William Randolph Hearst and his wife, Millicent. Born to luxury, Churchill had grown up in the 186-room Blenheim Palace, but even he was impressed by Hearst’s “castle,” where they remained for a week.

Winston recorded his own impressions of Hearst in a cable to Clementine: “I got to like him—a grave simple child—with no doubt a nasty temper—playing with the most costly toys.” Churchill described the extravagant mansion, with its furniture, art, and expensive décor collected from all over the world, in another letter to her.

“A vast income always overspent: Ceaseless building & collecting not v[er]y discriminatingly works of art: two magnificent establishments, two charming wives; complete indifference to public opinion, a strong liberal & democratic outlook, a 15 million daily circulation, oriental hospitalities, extreme personal courtesy (to us at any rate) & the appearance of a Quaker elder—or perhaps better Mormon elder.”

While Hearst rarely smiled, he seemed eager to please the Churchill entourage, asking the two young men to “draw up a list of all the film stars you would like to meet and I’ll get them to come along for a banquet.”

Despite their opposing political views, they came to an agreement for Churchill to pen stories for Hearst’s newspaper syndicate.

While at Hearst’s home, Churchill met William Van Antwerp, Baruch’s friend and a partner at E. F. Hutton. Churchill no longer had the kind of money his parents did; he did not inherit significant sums and he wasn’t an heir to the family estate at Blenheim Palace, which belonged to his cousin.

Desperate to achieve the wealth of those around him, he quickly opened a new trading account, intent on reserving his funds, valued at about £20,000, for speculation. “This ‘mass of manoeuvre’ is of the utmost importance,” he told his wife, “and must not be frittered away.”

In Hollywood, Hearst hosted a party for Churchill, with performances by Charlie Chaplin (Livermore’s neighbor) and Marion Davies, Hearst’s mistress. (When he had described Hearst as having “two charming wives” in his letter to Clementine, he was referring to Davies.) Every event felt like an ascending display of wealth and, to the discerning, a suggestion that the party may have been the apex.

After completing a set of impersonations on stage, Chaplin took a seat by Churchill, who asked about his next film role.

“Jesus Christ,” Chaplin said with a mischievous look.

Churchill waited a beat, then asked, “Have you cleared the rights?”

Churchill’s mind remained on money. He was fascinated with the American way of investing. He gave his new friend at E. F. Hutton control over his share account while he was traveling. “His firm has the best information about the American market,” he told his wife. “All this looks very confiding—but I am sure it will prove wise.”

Schwab provided the private train car for their trip to Chicago. However, Churchill got his first lesson that the stock market doesn’t only go up while on board when he received a telegram: “Market heavy. Liquidating becoming more urgent.” But it was temporary; the market was soon heading upward again.

Baruch met Churchill’s train car in Chicago on October 5 and escorted their party to New York on his personal railroad car.

During the journey, Churchill urged Baruch to tell the younger members of the party how he had made his first fortune.

Baruch told them how, after graduating from college and getting a job on Wall Street, he had entered into a speculative venture involving a copper company when his mother sent him a message: “I hope you will observe the Day of Atonement.”

Though he was Jewish, Baruch wasn’t particularly observant, but he never traded on High Holy Days. Obeying his mother, he did not go into his office that day and put the market out of his mind.

“But Jehovah did not betray his servant!” Churchill burst out.

“No, sir,” Baruch said. “The stock broke forty points. Of course, if I’d been there we’d have taken our profits after ten points. As it was, all I had to do the following morning was to get down there and take the shirts off their backs. I found myself at the age of twenty-six, having made seven hundred thousand dollars in one day.” That story of financial providence delighted Churchill.

Inspired by such tales and the confidence “Barney” had in the current market, Churchill began to play the market even more heavily. His account had a trading volume in stocks—buying and selling—of more than £400,000 in a week, much of it on margin.

On their first night in New York, the Churchills could feel the new riches of the city coursing through its veins: Joined by Baruch, they attended an elaborate party hosted by publisher Condé Nast and his wife, Leslie, at their Park Avenue penthouse. The 225 guests included such well-known artists and performers as Fred Astaire and Gloria Swanson.

Churchill would later write that the “old antagonism between the millions and the millionaire had become obsolete.” Rather than resent millionaires, the masses aspired to be like them. The capitalist in the United States, Churchill wrote, “advances under the banner of ‘High wages, enough leisure to spend them in, and better times for all’: and the masses follow, confident that in one way or the other they will all win through.”

Unlike in Europe, Churchill observed, “the social life of the United States is built around business.”

Schwab loaned him another private train car for a trip to Washington, DC, to pay his respects to Hoover. The trip was merely a diplomatic obligation: Churchill was no fan of the president, having called him a “son of a bitch for his callous disregard of British military interests” during the Great War when Hoover, as chairman of the Commission for Relief in Belgium, organized massive food-relief efforts for areas occupied by Germany.

After his time with Hoover, he would travel to Virginia, then return to New York for the final two weeks of October. Baruch had promised a farewell dinner in his honor, with Wall Street’s most influential figures in attendance—a crowning moment of his dazzling tour of American capitalism. It would be his final chance to sit among the titans of finance who had come to fascinate him.

EIGHTEEN

OCTOBER 10, 1929

As a measure of social currency within New York’s high-finance set, holding a dinner for a politician or dignitary at your home was a sign of status. If you could persuade a head of state to be your honoree for the evening, it was an expression of your own influence. It was a subtle competition among men for a kind of power that their money couldn’t buy directly. To them, proximity to power was power.

That was why Thomas Lamont was so overjoyed when his old friend, the newly reappointed British prime minister Ramsay MacDonald, who had pushed out Churchill as chancellor of the exchequer just four months earlier, accepted his invitation to a black-tie dinner in his honor on October 10. Lamont carefully curated the guest list to sixteen men, a who’s who of New York’s elite, sending out the invitations personally: Judge Learned Hand; John D. Rockefeller Jr.; GE’s Owen Young; statesman Elihu Root; George L. Harrison, governor of the Federal Reserve Bank of New York; Myron C. Taylor, chairman of U.S. Steel; Russell Cornell Leffingwell, Morgan partner; and others.

For the politicians, these dinners were just as important; they gave them access to moneymen. Several weeks before Lamont’s dinner, MacDonald’s chief of staff specifically asked if Lamont would invite John D. Rockefeller Jr. And when MacDonald was in Philadelphia earlier in the day, his first instinct when he met a reporter was to say, “Come on over here. I want to introduce you to one of the richest men in America,” and MacDonald proceeded to shake hands with E. T. Stotesbury, a Philadelphia financier.

At the dinner, MacDonald held forth on his enthusiasm for the Kellogg–Briand Pact, the peace treaty that fifteen nations had signed in Paris in the summer of 1928 that was supposed to outlaw war as a means of resolving disputes between nations. War, the leaders had all agreed, was henceforth against the law. Never again would the major powers of the world seek to resolve their disputes by sending young men to die on the battlefield. Florence Lamont was not impressed. “It seemed too good to be true,” she wrote to her son about how she had eavesdropped (women were not invited to sit at the table) and heard MacDonald voice his support for the Kellogg–Briand Pact. “Too amazing that Ramsay could in all seriousness be saying that a new day had dawned, that war must go, and that sixteen of the leading men in America were listening and agreeing.”

But in the moment, she kept that thought to herself. Florence and Thomas Lamont were in their element on these occasions; they believed that dining with international statesmen, encouraging their best instincts, would pay dividends in the future.

While Lamont put on a happy face, he and his protégé, Leffingwell, had been privately debating the real state of the economy and world.

Lamont had been working with Leffingwell on a lengthy memorandum on the stock market at the request of President Hoover, who would have preferred to leave Wall Street to its own devices but was coming to understand that it was politically untenable to do so.

Leffingwell, a natural skeptic, had a keen eye for the downside. “The protracted bull market in stocks seems to have passed all bounds. I think it is diverting too much credit from business but above all it is diverting the attention of the people from their work to gambling.” Leffingwell proposed that Lamont share those impressions with Hoover.

Lamont, however, felt such an assessment was too harsh—“in such unqualified terms seems a dangerous one”—and might inspire one of Hoover’s big ideas that could involve new regulations, something Lamont wanted badly to avoid.

On October 15, Yale’s Irving Fisher, a man whose white trimmed mustache and goatee made him look even more like a professor of significance than he already was, stood behind a podium hoping to reassure an unsettled market, which, despite his bullish claims, had fallen about 7 percent in the past month. He was there to defend the advent of speculative investment trusts in a speech over dinner to members of the Purchasing Agents Association at the Builders Exchange Club on Park Avenue.

“Largely through the influence of the investment trust movement, the public has been waking up to the superior attraction of stocks over bonds,” he said. “And I believe the operation of the investment trusts, as a whole, has acted to stabilize the stock market rather than to make its fluctuations more violent.”

During the question-and-answer period after his talk, Fisher carried on with unbridled optimism.

“Stock prices have reached what looks like a permanently high plateau…I do not feel there will be soon, if ever be, a 50 or 60 point break from present levels, such as [bears] have predicted. I expect to see the stock market a good deal higher within a few months.”

A few days later, Fisher expanded on that belief. “Even in the present high markets, the price of stocks have not yet caught up with their real values,” nor had the market “yet reflected the beneficent effects of Prohibition, which had made American workers more productive and dependable,” he said in another speech.

Hoover’s secretary of commerce, Robert P. Lamont (no relation to Thomas), also remained resolutely positive. “Industrial and commercial activity during the first nine months of 1929 continued on the same high level which has characterized American business during the past five years,” he said in a statement. “The output of pig iron and steel ingots, usually regarded as an accurate reflector of industrial conditions, was more than 17 percent greater than in the corresponding period of the preceding year…Automobile production, often used as a measure of consumer purchasing power, was greater than any other similar period. Industrial employment was larger than in the same period of last year, while industrial payroll totals showed considerable expansion.”

In every measure the economy was showing remarkable stability, asserted Secretary Lamont. Like Fisher, he expressed no doubts about the state of America’s financial health.

The same day, October 15, as Mitchell boarded an ocean liner for the trip back to the United States after his tour of European financial centers, he saw no justification for the slump that Roger Babson, still the market’s most vocal bear, was predicting. Mitchell’s time abroad had not shaken his faith in the American financial markets. He was in complete agreement with Professor Fisher’s assessment. “Although in some cases, speculation has gone too far in the United States,” he stated, “the markets generally are now in a healthy condition. The last six weeks have done an immense good at shaking down prices. Many leading industrial securities are now at levels which would have been considered perfectly sound and conservative even by the standards of ten years ago.”

Hoover, however, was not reassured. As the first president to put a phone on his desk—prior presidents had to go to a booth or to the study off the Oval Office to use the phone—he often spoke to Thomas Lamont as he got ready for the day, even prior to eating breakfast in the White House residence, to get his take on Wall Street matters. But rattled by the roller-coaster stock market, and confused by conflicting comments from Babson, Fisher, and Mitchell, the president dispatched an envoy, led by his friend the industrialist Henry M. Robinson, to have a more in-depth conversation with Lamont.

Hoover continued to rely on Lamont but perhaps somewhat skeptically, knowing full well that the House of Morgan hadn’t lent its support to his campaign in 1928. In the heat of the election, a disparaging memo that Morgan partner Leffingwell had written years earlier, when he had worked at the Treasury Department, was leaked by the Democrats: “Hoover knows nothing about finance, nothing about exchange, and nothing about economics,” it read. “Hoover…has never failed to be wrong whenever his duties confronted him with problems of that nature.” Morgan partner Parker Gilbert, meanwhile, had dubbed Hoover “Secretary of Commerce and Under-Secretary of all the other departments.” The man, he believed, simply didn’t know his place. Other Morgan partners privately dismissed Hoover as icy, pretentious, and hopelessly stubborn.

When Robinson met Lamont, he relayed Hoover’s concerns: Were the increasing number of stock mergers and consolidations a problem? And should his administration do something to stop speculation before it was too late?

On Saturday, October 19, Lamont sent Hoover an eighteen-page letter on trends in the American economy that was overwhelmingly positive, almost Pollyannaish. Lamont described the letter’s tone in a memo to Leffingwell as “far less bearish than you are, but of course arriving at a conclusion that there is nothing to be done either at Washington or at 23 [Wall Street].”

“We must remember that there is a great deal of exaggeration in current gossip about speculation,” he wrote to Hoover. Lamont defended mergers and the holding companies dominating the railroad and utilities markets—including Morgan creations United Corporation and Alleghany—and was effusive about the newcomers to stock trading, the middle class.

“Is it not just possible that the improved machinery of the stock exchanges and the new investments trusts are attracting the savings of small investors all over the country who, induced in the first instance perhaps by merely the hope of a quick speculative profit or by stories of others’ winnings, may become in time investors in the best stocks of the best companies?”

He did not, of course, answer this rhetorical question.

“If it should turn out that the speculative interest in stocks and the investment trusts are drawing the savings of the American people into partnership in the great and successful American industries, then the problem of waste of capital through the issue of fraudulent securities is being solved by making good stocks available to everyone. The wide distribution of the ownership of our greater industries among tens or hundreds of thousands of stockholders, should go a long way to solve the problem of social unrest and of conflict or imagined conflict between the corporations and the people.”

It certainly would be ill-advised “by premature action of any kind, to throw a monkey wrench into financial and economic machinery which appears to be functioning, on the whole, for the greater good of the people.”

America’s future, Lamont continued, “appears brilliant…we have the greatest and soundest prosperity, and the best material resources…our great domestic market, our efficiency and our capital supplies make our securities the most desirable in the world.”

His conclusion to the president: “Corrective action on the part of public authorities or individuals need not at this time be contemplated.”

Hoover so eagerly awaited Lamont’s advice that when his letter was delivered to the White House by Martin Egan, the publicist for Morgan, the president held up an official procession for several minutes to read and discuss it. One of the most brilliant bankers in the world was urging him not to be alarmed.

Among Wall Street insiders, Leffingwell was more apprehensive than most. The extended bull market was dependent in many ways on unsound and unethical practices, such as pools and investment trusts, which were by design not transparent. Though it was certainly true that new issues of stock were financing industry and new technologies, those stocks weren’t the ones to drive the market upward. Rather, most speculators were driving prices to unprecedented highs by trading existing securities—the most popular stocks of the day like RCA. All built on easy credit.

But Lamont, always an optimist, hoped that Hoover would pursue the Coolidge philosophy and leave the market to its own devices.

In a note to Jack Morgan in which he shared the letter he sent to Hoover, he described its content by saying, “almost all that it contains is essentially obvious.”

October 19 was a Saturday, which meant that the stock exchange was only open until noon. The session ended badly with a sharp, unexpected break in the market—the Dow ended the day at 323.87, down 8 percent for the week—prompting brokers to issue margin calls to customers. Many bankers and brokers had already raised their margin requirements to 50 percent, up from the 10 percent that many of their regular clients were accustomed to. Investors who were short on cash found themselves in a very uncomfortable spot, watching helplessly as brokers sold off their positions to recover debts. This set a self-perpetuating cycle in motion. As brokers liquidated accounts, selling shares for whatever they could get, their actions drove stock prices even lower, triggering yet more margin calls, and yet more liquidation. In a matter of hours, $1 billion in equity vanished. That very morning Hoover had received Lamont’s upbeat letter.

On Sunday, October 20, following the carnage of Saturday, The New York Times reported that Jesse Livermore was leading a bear clique that included Walter Chrysler against a bull clique led by archrival Arthur Cutten for “market supremacy.” Its headline read: “J. L. Livermore Reported to Be Heading Group Hammering High-Priced Securities.” The “Boy Plunger”—Livermore—was now, according to The New York Times, “the best man on the stock market tape the speculative world has ever known.”

Livermore was first stunned, then flattered, then furious at the implication that he was the ringleader of a group undermining the market.

After he calmed down, Livermore realized he could use the story to his advantage. At 10 a.m. on Monday, October 21, Livermore was at his massive mahogany desk when a clerk escorted in a New York Times reporter whom he had invited to the office.

For a few moments Livermore pointedly ignored his guest, allowing him to scribble notes about Livermore’s demeanor, his office, the ambiance. Journalists love those little details. Then Livermore smiled and gestured to him to take a seat.

When the reporter began the interview by asking if he was indeed the leader of a massive bear consortium rampaging Wall Street, Livermore handed him a typewritten statement. He had still not said a word.

The reporter repeated the question.

“Read my typed statement,” Livermore said. The document denied the allegations made by The New York Times the day before.

The reporter ventured another question. “Why are stocks declining?”

The market, Livermore declared, was overpriced, and stocks were at “ridiculously high prices.”

The writer countered that, according to Professor Irving Fisher, stocks were still relatively inexpensive.

“What can a professor know about speculation or stock markets?” Livermore replied. “Did he ever trade on margin? Does he have a single cent in any of these bubbles he thinks are cheap? You must beware of inside information—all inside information…How can the public possibly rely on information coming from a classroom? I tell you the market never stands still. It acts like the ocean. There are waves of accumulation and distribution. The market always tells you when you are wrong. So let’s leave it to the market to tell its own story—with or without help from college professors.”

Confident that he was getting a great story, the New York Times reporter pressed on, asking if Livermore was not “on the short side since you believe the market will break?”

Livermore picked up his prepared statement and read aloud with deliberation.

“What little business I do in the stock market has always been as an individual and will continue to be done on such a basis. It is very foolish to think that any individual or combination of individuals could artificially bring about a decline in the stock market in a country so large and prosperous as the United States.”

On Tuesday, October 22, Mitchell arrived back in New York from his latest vacation abroad. On the dock, as he was disembarking the ocean liner, he was immediately pressed by reporters to comment on the worries that permeated throughout Wall Street and, increasingly, the nation. “The present market decline is a healthy reaction which has probably overrun itself and there is nothing alarming about it,” he said. “In a market like this, fundamentals are the thing to look for and if you could show me anything wrong with the situation generally, then I would be concerned.” That day, the markets seemed to listen to him: The Dow went up slightly for the first time in nearly two weeks.

The Federal Reserve Board of New York was scheduled to meet the next day. Mitchell had not spoken with the other directors in over a month. The Fed had only recently raised the discount rate from 5 to 6 percent, but in Mitchell’s opinion it was time to consider reducing it again. “Certainly lowering the present rate is desirable. It would help business, aid the bond and mortgage market and help generally to return to full prosperity,” he said.

His statement was regarded as a sign of encouragement by many. But his remarks were contradictory. In one breath Mitchell maintained there was nothing wrong with the market and in the next argued that a lower interest rate was necessary to help business and return the United States to “full prosperity.”

That day, a far less sanguine Hoover dispatched an alarmed message to Lamont regarding the “speculative situation which seemed to him to be running very wild.” Lamont did not immediately respond but forwarded the message to Jack Morgan—a demonstration to his boss of just how close he was to the president.

Then came Wednesday, October 23. The market had only been open an hour before panic selling hit blue-chip stocks. Westinghouse was down 35, and GE, 20. It was the “most sweeping and far-reaching decline of the year,” according to The New York Times, effected not only on the big board at the Exchange but on the curb and the over-the-counter market, leading to even more margin calls.

In the final hour on the Exchange, frenetic trading wiped out $1 billion in paper values, with 2.6 million shares sold. The final quotation was not printed by the ticker until an hour and forty-five minutes after the market’s close. The Dow closed at 305.85, down 7 percent for the day.

Certainly some investors had taken their profits, but others were wiped out. A somewhat callous banker predicted that the abrupt deterioration of the market had a silver lining.

“It will send back to work many people who have been sitting around brokerage offices for a year or so on the trail of easy money,” he said. “I have heard thousands of reports of merchants, farmers, and men and women in all walks of life literally giving up their businesses to watch the stock market. Most of them will, by necessity, have to go back to earning their living in normal ways.”

One group cheered by the developments in the market was bond dealers. For years, their customers had been lured away by stockbrokers promising higher returns. But in the past days and hours, bonds had been steadily advancing.

The indefatigable Irving Fisher gave yet another speech, this one to the District of Columbia Bankers Association. He continued to dismiss Babson’s prediction of a “60 to 80 points” drop-off of the Dow Jones Industrial Average, but now, even the great bull started to concede a fall was possible, but, in his view, only if it occurred in small declines of 5 to 12 percent at a time.

“These will probably be required,” he said, “as thousands of small and inexperienced investors try to scramble aboard the stock market bandwagon from time to time, hanging on by their eyelids, that is, inadequate margins and lacking needed specific knowledge of the stock they thus overbuy.”

NINETEEN

OCTOBER 24, 1929

As dawn broke on Thursday, October 24, the first rays of morning sunlight cast an angled glow across the façade of the New York Stock Exchange, briefly catching its white marble columns before slipping into shadow. The statue of George Washington, installed on the steps of the old Sub-Treasury Building to commemorate the spot where he took the oath of office in 1789, was nearly in silhouette—backlit by the dawn and casting a long shadow toward the Exchange. For a few fleeting minutes, the thousands of men filling the street—some already seated on the Sub-Treasury steps—had to squint against the glare. They waited in near silence, collars turned up against the cold, watching the building where their fortunes—and perhaps the country’s—would rise or fall with the opening bell.

Lamont was astonished when he arrived at his office to see the throngs gathered, their faces etched with anxiety. He made his way into the entrance of 23 Wall Street, picking his way through the crowd of men wearing rumpled clothes from sleeping in hotel lobbies or on park benches the night before, not a few still drunk from making the rounds at the city’s many speakeasies. Safe inside the secured door, Lamont heard the thrum of a thousand conversations, people trading rumors.

Police wagons began to arrive at the scene, parking across the entrance to Wall from Broadway, blocking all vehicles from entering. Officers wielding clubs piled from the paddy wagons. One of the Street’s messenger boys asked a beat cop why he was there. “In case there’s trouble,” came the reply.

After the rout of Wednesday, Michael Levine, who oversaw the Street’s vast flock of young messenger boys, had posted a sign: “Nobody Goes Home Until I Say So.” Levine knew that if the previous day’s collapse was repeated, up to one hundred thousand men and women who worked in and around the stock market would need to be fed and housed overnight. Every hotel room in the Financial District had already been booked, and restaurants had been notified to expect big crowds. Foldable cots had been located and stacked in brokerage rooms.

Just before the market opened at 10 a.m., Lamont and his partners crowded around the office’s ticker, waiting, almost without taking a breath, for the first trade and what it would portend for the day. Out on the sidewalk Pat Bologna, a Wall Street bootblack who had made a reputation as a tipster, turned his attention to the crowds as a sudden quiet fell among them as well. “People just stood there, stopped talking and looked toward the stock exchange. It was like the silence before the off at a big race,” he later recalled.

Bologna had a lot riding on the day—$5,000, his life savings, much of it invested in Mitchell’s National City Bank stocks. He remembered Mitchell’s advice after he’d shined the great man’s shoes. “A wise man never sells out at the first sign of trouble,” Mitchell had said, handing him a dollar tip. “That’s for the pikers.”

Exchange superintendent William Crawford made his way across the trading floor toward the podium to take his position at the bell. The one-acre space, with paneled Georgian marble walls, huge windows, and a skylight four stories overhead, nonetheless seemed too small. The room appeared to be more congested and the traders more dejected and apprehensive than he had ever witnessed.

As the clock counted down, specialists and their clerks manned their stockade-like posts, numbered from 1 to 16. Female telephone operators were seated around the periphery of the room, headsets at the ready. Above the trading floor, the visitors’ gallery began filling up.

As Crawford looked around, he could almost feel the “electricity in the air so thick you could cut it.” The excitement was palpable; he had gotten a note that Winston Churchill would likely be arriving later in the day to watch the action from the gallery.

Making his way through the pile of traders, Crawford saw an unusual sight at the bell: Richard Whitney. Above the din of the traders, Whitney, the acting president of the Exchange, instructed Crawford that he was not to leave the area near the podium for the entire day. Crawford knew there was only one reason he’d be given that order: to halt trading in case Whitney decided to close the Exchange.

Crawford watched the chronometer tick. At exactly 10 a.m. he punched the bell to signal the opening of trading. Men began yelling and gesticulating. Phones started ringing incessantly. The bloodbath had begun.

Montgomery Ward immediately plummeted, with six thousand shares changing hands; other blue chips plunged with the same astonishing momentum as a blizzard of sell orders from around the country blanketed the market. At first the sell-off was driven by brokers liquidating the accounts of customers who couldn’t meet their margin calls. But the panic became so pervasive that brokers were willing to sell at any price. Soon many stocks had no bids at all, at any price. Brokers, still behind from processing the previous night’s paperwork, struggled to keep up.

Bologna, the bootblack, managed to wriggle into a customer room at a brokerage office near his corner to keep an eye on his investments. It was pandemonium.

“In the crowd,” he later described, “there’s a Chinaman wearing a hat which rests on his ears. He’s got a dead cigar in a mouth of dead teeth. He’s standing on tip-toe to see over the shoulders of a woman wearing a big fancy hat. She’s holding out her wedding ring and shouting ‘you want more margin—you can’t have more margin.’ He’s as drunk as a lord. Everybody is shouting. They’re all trying to reach the glass booth where the clerks are. Everybody wants to sell out. The boy at the quotation board is running scared. He can’t keep up with the speed of the way stocks are dropping. The board’s painted green. The guy who runs it is Irish. He’s standing at the back of the booth, on the telephone. I can’t hear what he’s saying. But a guy near me shouts, ‘the sonofabitch has sold me out!’ ”

Unable to decide whether to cash out or not, Bologna left, pushing his way through the fracas to the fresh air outside.

The rules of the Exchange, typically a staid operation, stated that traders should not “run, curse, push or go coatless.” The opening bell had barely echoed when every convention of decorum was instantly forgotten.

Tickers continued to run ever further behind, but Crawford could not leave his podium. He phoned or sent messengers to the engineers in the basement to try to speed up the tickers. On the floor of the Exchange, between post 1 and post 4, hysteria was taking hold as traders were pushed against the counters by their feverish colleagues trying to get nearer to them.

At post 2, “a kind of madness” took hold. General Oliver Bridgeman, a U.S. Steel specialist, was surrounded by men waving and yelling, and one “bellowing like a lunatic.” Bridgeman would try to take down the orders as quickly as he could, screaming out which orders he had confirmed back to the traders, even as he watched U.S. Steel—the mighty mountain of Wall Street—dissolve like a sand castle in the rain. Crawford knew that if Steel continued its descent, it could “carry everything else down the chute with it.”

At post 4, a comparable frenzy erupted. This was the home of some of the most iconic companies in America: General Motors, Caterpillar Tractor, and Anaconda Copper, among others. Crawford saw “a fat, perspiring man become almost hysterical, yelling orders that made no sense until some friends seized him by the arm and led him away.” The ticker was running almost an hour late.

Following the events from his office with rising alarm, Lamont knew he had to do something about the calamity unfolding across the street. Jack Morgan was in England. As the senior Morgan man, Lamont had inherited the mantle of Wall Street savior.

He ordered his secretary to call a handful of top bankers, asking them to come to a meeting at 23 Wall Street at noon. But phone lines were so overwhelmed that it took Lamont’s aide ten minutes to reach Charles Mitchell, whose office was just one block away at 55 Wall Street. Lamont realized that the situation was spinning out of control. He remembered the Panic of 1907 and tried to think: What would J. Pierpont Morgan do?

Claud Cockburn, a British journalist working for The Times of London, was on the street trying to gather copy. A co-worker had advised him not to use the word “panic” in his story that day. Everybody was on edge. That morning Cockburn had breakfast with an American friend at a hotel café in Greenwich Village. The preoccupied friend kept jumping up to check the hotel’s ticker tape machine, even though the Exchange had not yet opened.

After finishing their meal Cockburn walked toward Wall Street and “found himself part of a sort of an eerie silent army streaming in the same direction,” all with the same dazed expression.

At the corner of Wall and Broad Streets, Cockburn found “an enormous murmuring crowd, and the people pressed close around us were talking, when one listened to them, almost in whispers. Every now and then you could hear quite distinctly a hysterical laugh. As time passed the crowd grew thicker and noisier, and then there was an eddy in the middle of it and a man in shirtsleeves was pushing his way across the street in the direction of the Morgan offices.”

It was Charles Mitchell, making his way toward the bankers’ meeting called by Lamont at 23 Wall Street, shoving people on the sidewalks aside with his imposing frame.

After watching the tape all morning, Albert Wiggin, the chairman of Chase, had formed an opinion: “This is no bear market, it’s a panic—and we have got to do something.” After receiving Lamont’s summons, Wiggin put on his hat and, like Mitchell, set out for the Morgan bank. Richard Whitney, meanwhile, left the Exchange and walked over to the Morgan offices to report to the bankers what was taking place. He had been appointed acting president of the Exchange while his superior, E. H. H. Simmons, was on a two-month honeymoon in Hawaii following his wedding on October 4.

As the crowd grew denser and rowdier, the doormen who had been preventing the public from entering the Morgan bank were joined by policemen. When Mitchell and the other bankers arrived, the doormen allowed them entry, then shut the doors tight and guarded the entrance.

Mitchell, Wiggin, William C. Potter of Guaranty Trust, Seward Prosser of the Bankers Trust, and Richard Whitney gathered around Lamont’s rolltop desk. Richard’s older brother George, who was a Morgan partner, also joined the impromptu meeting. They all grasped the gravity of the situation; each had an institution at risk of being caught up in the panic, however solid their own balance sheets. The Wall Street Journal later estimated that the group “represented more than $6 billion of massed banking resources,” not including the vast, unknown wealth of the private partnership that was J.P. Morgan.

Lamont asked each man to contribute his thoughts. Speaking quietly, so as not to be overheard, with no notes taken, the men offered their assessments. They eventually agreed on a plan of attack: Each of the five banks represented would commit $20 million to plow into the market in hopes of stabilizing it; they were later joined by George F. Baker Jr. of the First National Bank. The initial commitment of $120 million was later more than doubled to $250 million, with a few other banks and the Guggenheims joining in. The idea was to use the money to buy up shares in thirty-seven of the most active stocks that had been hardest hit by the panic selling.

Bernard Baruch declined Lamont’s urgent request to participate—a stinging rejection from one of Wall Street’s most prominent investors. Baruch had no illusions about the plan’s chances—he believed it was throwing good money after bad. With the market now having so many participants, no group, even powerful banks, could ensure the markets wouldn’t continue to collapse. “The day was past when the House of Morgan could rally Wall Street in such a crisis,” Baruch later explained.

Within twenty minutes the bankers ended their consultation. Lamont escorted them to the door, and everyone shook hands in agreement about their grave mission.

Before leaving for the meeting, Richard Whitney had ordered Crawford to clear out the visitors’ gallery. The sight of aides shooing people from their seats only served to trigger a wave of rumors that the Exchange was about to close. By early afternoon an even larger crowd began to congregate on the corner. Reporting for The Saturday Evening Post, Edwin Lefèvre—who had written Reminiscences of a Stock Operator—described the scene as a sea of shocked and almost paralyzed humans: “The white faces were growing slimmer and the faces growing whiter. But they stood there, hour after hour, unable to go away—dying men counting their own last pulse beats.”

Head held high, affecting a relaxed demeanor, Mitchell led his colleagues out to return to their banks. His confidence had a soothing effect, as the crowd drew breaths of relief, and cries were heard of “It’s going to be all right.” Rumors spread that the bankers had established a pool to steady the market—just like in 1907.

Lamont invited a handful of reporters into the bank for a short press conference. With a calm but somber visage, he was an imposing figure standing next to a window covered in steel netting that had been installed after a bomb had been detonated next to the building in 1920.

Cockburn described Lamont as being like “a man who comes on the stage of a burning theater and urges everyone to keep perfectly cool, stating there is no cause for alarm.”

“There has been a little distress selling on the stock exchange this morning,” Lamont dryly acknowledged to a disappointed reporter who appeared to be trying to goad him into providing a headline-grabbing quote. “We have held a meeting of financial institutions to discuss the financial situation. We have found that there are no Houses in difficulty and reports as to the maintenance of margin are very satisfactory.”

Cockburn sat listening, astonished. “We consider the situation on the floor of the stock exchange this morning a technical one rather than fundamental,” Lamont continued, adding the market was “susceptible to betterment.”

Reflecting later on the moment, Cockburn wrote: “Since becoming a journalist I had often heard the advice ‘to believe nothing until it has officially been denied.’ But despite this, even the ominous blandness of Mr. Lamont did not shake me into full awareness of what was going on.”

Cockburn left for a lunch appointment at the home of Edgar Speyer, once “Sir Edgar and a Privy Councilor” in England, now a partner in Speyer & Co., one of the most prestigious German-Jewish banking houses. Speyer and his wife lived on what was known among New York’s moneyed class as “The Row,” in one of thirteen Greek Revival homes, “built of red brick in Flemish bond, with entrances flanked by Ionic and Doric columns, and marble balustrades,” that lined the north side of Washington Square with every aristocratic amenity. A young houseman served lunch as Cockburn, the Speyers, and other guests discussed poetry, as if the stock market’s convulsions were irrelevant.

In the course of the meal Cockburn noticed sounds of scuffling and raised voices behind the door that led to the kitchen. Just as a saddle of lamb was being placed on the table, Cockburn glimpsed various servants down the hall, their faces angry and agitated. One of the menservants was shaking his fist and then a woman’s voice could be heard bellowing, “Go on, or else.”

Cockburn described the scene: Speyer “begged us to excuse him. The staff, he explained, had of course their own ticker-tape in the kitchen premises and they were all heavily engaged in the stock market…The staff saw their savings going down in chaos; since they were certainly operating on margin, they might at this moment already have been wiped out. They all held shares in Montgomery Ward, which had dropped from an opening price of 83 to around 50 before noon. And all this was going on before their eyes while their employer, reputedly one of the shrewdest financiers in New York, was calmly sitting upstairs eating pompano and saddle of lamb. They absolutely insisted that he go at once with them to the kitchen, study the situation, make telephone calls if necessary, and advise them what to do for the best.”

Speyer never made it back to the table. When the disastrous luncheon was over, Cockburn returned to the Financial District wondering what would become of the household staff’s hard-earned savings.

Richard Whitney returned to his office six stories above the New York Stock Exchange’s trading floor with his marching orders. He had long been overshadowed by his more successful brother, George, who had quickly climbed the rungs of the House of Morgan, but now Richard, in his temporary role atop the Exchange, had an opportunity to prove himself on the public stage.

At heart a gambler, subject to self-delusion and wishful thinking, Richard Whitney was not a wealthy man; in fact, unlike his brother, he was deep in debt. He had lost too much money on ill-advised speculation and gambling, a secret he kept to himself. Ever the optimist, Whitney was not unduly alarmed at the events of the day, as he believed that while the market might crash, it would then stabilize. So confident was Whitney that a true disaster would be avoided that on the previous day, despite the nascent crisis, he had attended a horse race, serving as the steward of the running of the fourteenth annual meeting of the Essex Fox Hounds in Far Hills, New Jersey.

Whitney had expected this day to be no different than the previous one, but now he had a special job to do—a performance that would take all the acting skill he had perfected from years of concealing his gambling losses, which had left him and his wife, an heiress, with debts of more than $2 million. It was he who would be using the bankers’ pool to prop up stocks. And he would make sure that everyone could see him doing it.

At 1:30 p.m. the tall, supercilious Whitney strode onto the trading floor with a smile and an air of self-assurance. Alarmed, superintendent Crawford waited for the signal to climb the podium and halt all trading. But Whitney maneuvered quickly past him to post 2, where, in a loud, booming voice, he asked the nerve-racked Bridgeman what the last bid for U.S. Steel had been.

“One-ninety-five,” the specialist said.

“Ten thousand at two-oh-five,” Whitney announced. That amounted to $5 million in Steel stock, a Morgan client. For a split second there was silence around post 2, while people grappled with what had just happened. Then a shout of elation went up and spread across the room. All eyes turned to watch Whitney, who beamed at the response and continued to the next post. In all, he stopped at fifteen or twenty posts, loudly buying shares in agreed-upon amounts of the bankers’ list of stocks to support. Within minutes he had deployed the $20 million. The rout was halted. Steel would end the day up $2. Whitney was hailed as a hero, earning the sobriquet “Wall Street’s White Knight.”

After the closing bell sounded, people on the trading floor howled, booed, groaned, and collapsed with exhaustion. Men drenched in sweat leaned against posts or sat on the floor, their heads in their hands, surrounded by so many scraps of paper that the premises looked like the aftermath of a ticker-tape parade.

Outside the House of Morgan, the number of reporters and newsreel crews had swelled, all shouting questions as the members of the bankers’ pool arrived for another meeting. Lamont stepped forward as the acknowledged leader of the group. The Morgan man who had spent his career courting journalists was now seeking to calm their fears in hopes they could calm the public.

Dangling his pince-nez with nonchalance, he reassured the journalists that overall conditions were essentially sound. He avoided any discussion of the bankers’ group or forecasting the outlook for the next day.

The pool winnowed their list of stocks for “organized support” the following day down to twenty-five. The House of Morgan would control the operation on Friday, led by George Whitney and Frank Bartow, who would report to Lamont.

Again Mitchell exited the Morgan bank exuding conviction. “I am still of the opinion,” Mitchell told the press, “that this reaction has badly overrun itself.”

Rumors circulated that the bankers had conferred by phone with the Fed, clearing the way for cutting the rediscount rate and easing access to money. But it was untrue. Even the press misinterpreted what had happened, making some of Lamont’s comments appear as if the group of bankers expected the Federal Reserve Board to act in response to the market turmoil.

In response, Lamont and his team reconvened for the third time that day in his private office and decided they needed to clean up the news—if they didn’t, the markets might be surprised all over again. As they emerged with somber faces from the elevator shortly after 6 p.m., Lamont again reassured the journalists that no member of the Exchange was in trouble. They were handling the matter with seriousness of purpose.

But he did not explain in detail what steps the bankers had taken. To him, it was imperative that it remain a secret that the Big Six, as they were called, on behalf of their subsidiary investment trusts, pledged $40 million each that day to “fill the air pockets”—creating a market for stocks that had been offered and received no bids, and to bid up stocks that had dropped below their lending value. If the public knew exactly what they were doing, it wasn’t clear whether it would instill confidence or undermine it—or whether it would allow speculators to know how to shadow their moves for profit.

Lamont informed the stock exchange board of governors about the pool but added that “no man nor group of men can buy all the stocks that the American public can sell.” The Federal Reserve Board had met twice that day, with Treasury Secretary Mellon attending the afternoon meeting. But a spokesman for the Fed emerged after the meetings to proclaim the feared words: “No announcement.”

By the time it ended, the turmoil of Thursday, October 24, broke records. It was the heaviest trading day in the history of the New York Stock Exchange, with brokers handling transactions of 974 different stocks, with 12,894,650 shares changing hands. The stock ticker recorded the day’s final trades at 7:08 p.m., more than four hours late. There were big losses in stock value, but thanks to the Big Six, the morning’s plunge of $6 billion in losses had been cut in half. The Dow landed at 299.47, wiping out every gain for the year.

A short news item followed the last stock quote on the Dow Jones tape. Agents of thirty-five of the largest brokerages issued a statement affirming the market as “fundamentally sound” and “technically in better condition than it has been in months. The worst has passed.”

For some, however, the worst was just beginning.

Charles Merrill of Merrill Lynch called the young man who was his only floor broker into his office that night and handed him a list of ten stocks. Customers had ordered twenty thousand shares of each of those stocks to be sold—and in the chaos, the broker had failed to execute the orders. However, if the shares were sold the next morning when the market opened, Merrill Lynch would lose $500,000 and possibly go bankrupt. The two men looked at each other. What was the right thing to do? The floor broker agreed that he would wait for the right opening to sell.

Aboard a cruise liner traveling from New York to Southampton, England, the Berengaria, a new brokerage office run by Michael Meehan’s company was overrun. A large number of the 1,414 passengers aboard had been playing the market, rushing in and out of the brokerage office on the ship. The passengers, crammed in the small office, waited for updates on stock prices by radio, which were posted by a “quotation board boy” in chalk; some twenty thousand shares were traded from the ocean liner, with one passenger losing $160,000 at one point. A passenger described the experience as a “death watch.”

It was as if every major player were trying to will the market to go back up. “My son and I have for some days past been purchasing sound common stocks,” John D. Rockefeller Sr., who at ninety years old had decamped to his home at Pocantico Hills on the Hudson River, said in a statement.

The highly respected Lewis Pierson, head of Irving Trust, offered his view: “Severe disturbances in the stock market are nothing new in the American experience. The pendulum always swings widely and it would seem as though the long-expected break should bring about an equilibrium. The position of the Federal Reserve Bank is unusually strong and the borrowings of member banks are moderate. Considering the record-breaking earnings in many industries, we may well remember that whenever fundamental values are lost sight of by the unthinking majority it is time for courage on the part of those investors who have a real sense of basic worth.”

Unfortunately, most market participants had lost sight of “fundamental values” long before October 1929—and that couldn’t be blamed solely on the dishwashers and shoe salesmen and scullery maids who’d thrown their caps and bonnets into the ring.

For his part, Carter Glass, back in Washington, seemed almost gleeful, congratulating himself about his longtime contention that the market was being perverted by speculators. “I expected it long ago,” he told reporters about the stock market’s fall that day. “It is just the result of Mitchellism,” he said, taking a shot at Charles Mitchell, again. “It was inevitable.” He continued, “It is a sign the gamblers have reached their limit and they can thank Mr. Mitchell.”

With the markets in a full-on meltdown, astrologer Evangeline Adams hosted a larger group session that Thursday night to counsel apprehensive small investors rather than conduct private sessions. She held the meeting in her waiting room. There were just too many people who sought her advice.

Adams understood human nature perhaps better than many of the bankers and as such provided hope. The seer reassured her clients that the movement of the planets had generated “spheres of influence over susceptible groups, who in turn will continue to influence the market,” at least as far as Friday and Saturday were concerned.

As people left her office late that night, Adams contacted her own broker, who delivered the bad news: The seer’s portfolio had lost $100,000. Whatever the stars and planets had whispered in her ear, she now ordered him to sell everything as soon as trading began the next day.

In the weeks before October 24, Jesse Livermore had been plotting. Six men worked the catwalk with chalkboards in hand, collecting a steady flow of updates from London, Paris, and the Chicago commodities markets. He made several small trades, testing the market’s temperature, but he had started too early: He lost over $250,000 covering short positions. The same happened with a second set of trades that he considered “probes.”

The third time, his probes held. The time to short the market was near. His gut instinct, which had served him both well and badly, took over. But timing was everything.

At night he battled insomnia as his subconscious tried to work out the signals he was receiving.

Livermore spent long days sitting at the mahogany conference table in the big room, watching in complete silence as the markers wielded their chalk. The music he heard when looking at the chalkboard had become discordant, wild, moving at an ever-faster tempo.

Occasionally he made a trade. But mostly he waited.

He watched the carnage of Thursday and remained calm, almost excited it would get worse.

Richard Whitney’s theatrical stock-buying spree rescued William Durant, whose $18 million paper fortune recovered on Friday most of the losses it had suffered the previous day. Durant had hoped the market would rebound, but he had become so anxious about the market’s downdraft that, as a safety net, he placed $6 million of bonds in a safe deposit box, assuring he and Catherine would have money to live on in the future—in the event of a calamity.

Durant, convinced the Federal Reserve in Washington was responsible for the market collapse, called for Congress to regulate the members of the Fed board in Washington.

On Friday, October 25, President Hoover issued a public statement. “The fundamental business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis.” If the sentiment wasn’t inspirational, it was at least somewhat reassuring. In fact, that morning, Hoover had met with Henry M. Robinson, who in his report on his latest reconnaissance mission to Wall Street noted that there were “greater dangers and greater troubles in this situation” than Lamont had earlier indicated.

Though he told the president that there was not any immediate indication of serious failure, Robinson said, “Yesterday’s happenings will be followed undoubtedly by a very great number of individual firms and corporation failures, where the funds have been used in the speculative market in a marginal game. There will doubtless be great bitterness against ‘Wall Street’ (so-called) when each individual is explaining to his wife how he lost the family funds or to partners the disappearance of the concern’s assets. The blame, of course, must be placed on someone and, as Will Rogers said, ‘It might be on Hoover’s fedora hat.’ ”

Hoover continued his public reticence on the topic. He believed the country had “gone through a crisis in the stock market, but for the first time in history the crisis has been isolated to the stock market itself. It has not extended into either the production activities of the country or the financial fabric of the country.”

The market weathered Friday the 25th and the half-day Saturday session without serious calamity. Lamont met again with Mitchell and the other bankers in their pool after the close of the half session.

About $100 million of the bankers’ fund had been spent on Thursday afternoon. Whitney was applauded by stock exchange members. White Knight Whitney and the Big Six had saved Wall Street.

During their Saturday meeting, after assessing the state of the Street and his cohorts, Lamont sensed the worst had passed. The tidal wave of losses had ebbed, and the damage was being assessed. After the subdued session on Saturday, The New York Times wrote, “The day’s developments furnished additional proof that the market situation is firmly in hand, that the wave of financial hysteria has definitely passed and that stocks once again are selling on their earning merits, rather than at fictitious levels, both much higher and much lower, created by the haste of thousands of speculators to get in or get out of the market.”

Limousines lined the streets near the stock exchange over the weekend, an unusual sight and a sign that bank executives and investors were working overtime to ascertain just what had happened. Many of the banks had rented hotel rooms for their employees so they could work into the night to help tally all the trades they had fallen behind on during the avalanche of trading during the week.

Ever the master of understatement, Lamont wrote to his daughter Eleanor at Smith College: “I was a little tired at the end of the week because we had such a hectic time.”

TWENTY

OCTOBER 27, 1929

On Sunday, tour buses rumbled onto Wall Street, unloading rubberneckers on grim pilgrimages through the Financial District—morbidly curious to see the site of the financial bloodletting, as if they might find shell casings or shattered glass still scattered on the cobblestones.

High above the scene, a carved robed female figure—Integrity—gazed down from the pediment of the New York Stock Exchange. Arms outstretched and fists clenched in defiance, she stood sentinel over ten surrounding carvings that symbolize the “works of man”: science, industry, agriculture, mining, and so on.

That morning, Integrity kept watch as dazed figures wandered below, still struggling to comprehend the chaos that had unfolded in the days before.

On Monday morning, October 28, Mitchell arrived at the office perspiring—it was an unusually warm seventy-four degrees—after taking his usual walk from his home to the National City Bank. Mitchell was hoping the market would stabilize as soon as it opened, that the panic would be truly over. The public, he hoped, would have faith in the pool the bankers had set up.

Just before 10 a.m. Mitchell walked over to the trading department on the second floor of 55 Wall Street to watch the market opening on the ticker tape. To his great surprise, frantic selling began as soon as the bell sounded. He immediately knew that Monday was destined to be another bad day. Anxiety, which he had thus far kept at bay thanks to his overweening optimism, began to invade his thoughts.

At about 10:30 a.m., with the market in free fall, Mitchell got a call to attend another meeting of the Big Six bankers at the Exchange to see what they could do to stabilize the situation.

As he walked from the trading floor to the elevator to get to the meeting, he gave some important instructions to Hugh Baker, the firm’s head of trading. He told Baker that he hoped “City Bank stock would be held to its parity”—in other words, he hoped Baker’s traders would buy the bank’s shares if they fell too much, to try to keep them at the current price, an absolutely necessary condition for the still-pending merger with the Corn Exchange Bank to go through. With that directive, Mitchell stepped into the elevator to leave.

Meanwhile, on the floor of the Exchange, U.S. Steel opened at 207, then skidded down to 186. Whitney again appeared on the floor and hovered around post 2, this time without placing a bid, as if his mere presence might summon a herd of buyers. He had no such luck. All the blue chips took a beating: AT&T, down 24; Columbian Carbon, 61; Consolidated Gas, 20; GE, 47; Eastman Kodak, 41; Otis Elevator, 60; and on and on.

The bankers, joined by Owen Young of GE, decided that they could not realistically support the price of so many threatened stocks. All they could do was continue to plug “air pockets” for stocks on their list, the ones for which there were no bids whatsoever. Of course, that also had the effect of increasing their exposure.

Mitchell, stunned by the market’s violent descent, headed to the Federal Reserve Bank of New York for a meeting of the executive committee as they tried to decide what steps, if any, to take.

The meeting, which started at 2 p.m., was short, ending at 3:05 p.m. They reviewed reports about the state of the money market, a report on banks “borrowing in excess of capital and surplus” and “banks on our special list.” But it quickly became clear that no one on the board had any big ideas. As a sign of just how worrisome the market panic had become, the committee was told that 163 banks had asked for and received $148 million in advances and rediscounts—nearly double the amount just a week prior. Mitchell and the other board members departed without making any decisions.

Mitchell then made his way over to the House of Morgan just before 5 p.m., where many of the bank CEOs had assembled to discuss what action they might take. This time, they decided that no decisive move was warranted. They issued no formal statement, though individual members of the Big Six talked to several reporters, reiterating that they would not try to support price levels but would do everything they could to maintain an orderly market.

By the time the ticker caught up to the close of market, nine million shares had been traded that day, more than double the daily average. The decline had been calamitous; the Dow dropped more than 38 points, or 13 percent.

Mitchell finally headed back to his own office. The adrenaline rushes that had kept him going all day now sapped his energy. All he wanted to do was collapse. He went looking for Hugh Baker to get an update on National City’s stock—he had been frustrated that he had not been able to follow it while he was away from the bank.

That is the moment when Baker gave him the calamitous news: National City had bought seventy-one thousand shares of the bank’s own stock, beginning in the morning and accelerating as the day went on, at a price of $450 a share, for a total cost of $32 million.

Baker knew the severity of the problem as he said it aloud. Mitchell knew it, too. The bank had bought far too many shares—and couldn’t afford them. Mitchell was stunned, “astounded” and “deeply concerned.” This was, Mitchell said, a “very dangerous situation.” It could ruin the bank.

When Mitchell asked Gordon Rentschler, the firm’s president, if he “had heard what had been done,” Rentschler insisted he knew nothing about it and said he was “amazed” he hadn’t known about the share-buying spree because he had been in the office all day.

Mitchell did not fear many things. But in this particular moment, fear is what he felt. Everything he had worked for was at stake. At the same time, he couldn’t let anyone see his fear, even his closest colleagues. He had to make it seem as if this were just another challenge to overcome. And he did: Always seeing the glass as half full, he convinced himself that they would find an answer. He began batting around ideas with Baker and Rentschler as they headed home. Mitchell needed to be on time for a long-planned dinner party at the home of Bernard Baruch where he knew the guests would all be gossiping about the day’s turn of events.

Mitchell arrived at Baruch’s home on Fifth Avenue, just twelve blocks north of his own, and made his way through its large ballroom toward an enormous oval-shaped dining room. This was the dinner Baruch had promised to throw for Winston Churchill, the guest of honor. The six-story home, with thirty-two rooms and ten baths, was filled that evening with the city’s most prominent executives—some of whom Mitchell had been in anxious meetings with that afternoon: Thomas Lamont; Albert Wiggin; Charles Schwab; John D. Ryan, president of Anaconda Copper; Eugene Meyer, a wealthy banker and financier; and the Swope brothers, Gerard, the president of GE, and Herbert, former editor of The New York World.

Mitchell tried to keep his composure, disguising the existential crisis that was racing through his mind.

After everyone had been seated, in an effort to add some levity to the night, Mitchell stood up from his seat, with a glass of champagne lifted, and offered a toast to Churchill.

“To my fellow former millionaires,” Mitchell began, his usual ebullience touched by sarcasm.

When it was his turn to speak, Churchill regaled his dining companions with his own introduction to the mania on Wall Street, which he encountered the prior week after an early lunch with Baruch.

He “happened to be walking down Wall Street,” as he later described it, and was recognized by a “complete stranger”—an aide whom William Crawford had sent to be on the lookout for a short man wearing a bowler and a topcoat. Churchill was escorted into the gallery of the Exchange.

Churchill saw a setting that was nothing like what he anticipated. “I expected to see pandemonium; but the spectacle that met my eyes was one of surprising calm and orderliness.” In Churchill’s view, the 1,200 members of the Exchange were “walking to and fro like a slow-motion picture of a disturbed ant heap, offering each other enormous blocks of securities at a third of their old prices and half their present value, and for many minutes together finding no one strong enough to pick up the sure fortunes they were compelled to offer.”

The mood at the dinner gathering was upbeat. Individuals as wealthy and powerful as those at Baruch’s table would survive and would certainly reap great profits when the dust cleared and good stocks could be scooped up at prices far below their true values.

Successful financiers were, after all, professional optimists. “You don’t see any Fifth Avenue mansions built by bears,” Baruch’s friend James R. Keene liked to tell him.

Still, Baruch himself had been wary of the ebullience in the prior months. After getting Charles Mitchell’s optimistic cable back in August in Scotland, he had bought several stocks. But he had read the book Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay, and it weighed on him. The ship he took back to New York had a brokerage firm on board, and he put some sell orders in. By the time he reached Manhattan, his conviction had solidified and “I decided to sell everything I could,” he later wrote.

He didn’t tell anyone what he had done. Baruch’s friend George F. Baker Sr., chairman of First National Bank, had been crushed in the panic. He lost an estimated $14,737,000 in the declines of just three stocks: First National, AT&T, and U.S. Steel.

After the dinner, Herbert Swope cabled a fellow speculator with a briefing about the attitude of the rich men sipping brandy and smoking cigars as the meal ended.

“Think I am able to see change in situation for better so am making determined effort to hold on stocks believe you should too. Consensus of opinion of meetings at Baruch’s…was that those who stand pressure…would be conferring big favor upon themselves with certainty of recovery of stocks whose values undoubtedly far greater than today’s market regardless of high or low quotations in past. Arrangements made for big pool to [o]perate. Here is something important: Tomorrow may see beginning of real operation in Western Union. Plans being made tonight or tomorrow to organize buying power. Because of all this and taking advantage of your willingness to do so am leaving my Western Union intact at Harris Winthrop. I discovered distinct change for better tonight in that men were talking about making money instead of merely losing money.”

The next morning, Tuesday, October 29, as Mitchell and Rentschler walked to work, Mitchell explained that his “overnight cogitations” had led him to the conclusion that he had to step in.

As soon as the market opened, Mitchell expected a great deal of selling, and this time, he decided it was up to him to stanch the bleeding and save his bank.

“I simply made up my mind that I must come to the relief of the situation myself,” he later said about that morning. “I knew that the time was very brief and there was no opportunity to get any group together.

“Something must be done that morning in the way of cushioning that market in its fall,” he told Rentschler. “I must throw my personal resources into the situation to protect the institution.”

Upon arriving at the office, he summoned Hugh Baker to his office. Mitchell explained his plan: He would use his own money to buy back National City shares and seek a loan from another bank to help pay for it. He told Baker to start buying shares of National City for his personal account the moment the market opened and that he would “arrange some way to carry it.”

Mitchell left immediately to walk three hundred feet along Wall Street from his office to J.P. Morgan, where he stepped up the building’s five steps, through its bronze and glass door, and into the anteroom that led to the stairs and elevator to the partners’ offices.

There he met Lamont and George Whitney and took them into his confidence. “National City Company was not in a position to buy any additional stock,” he told them.

Could he use his personal credit to “to arrange a loan in a substantial amount?”

He was putting his pride on the line as well as his family’s wealth. It was clear what was at stake.

Lamont had a complicated view of Mitchell. He was a competitor, of course, and to Lamont’s thinking a somewhat reckless one, certainly less genteel than Morgan men. Nearly a decade earlier, Lamont had been informed by a reporter from The New York Sun that Mitchell’s National City was leaking information about a deal that they both were working on. Mitchell professed to be “extremely embarrassed by this situation” and told Lamont that he had fired “the man whose guilt was most clear and have severely rebuked the others.” Lamont generally tried to avoid Mitchell; once, when he was invited to Mitchell’s home to have dinner with George Harrison of the Fed, an invitation he would normally jump at, he chose to have dinner with his daughter instead. Still, Mitchell never stopped trying to be helpful to Lamont, even sending him telegrams in Paris during the reparations negotiations about his own efforts to backchannel with the Germans to help Lamont’s team.

But very little of that mattered in this moment. The most salient fact was that Mitchell had power, given National City’s size—or at least the power to inflict enormous damage on virtually every bank, including the House of Morgan. Lamont knew that would be the result if National City were to topple.

Lamont and Whitney agreed to Mitchell’s loan.

Mitchell requested a total of $12 million, which he used to purchase three lots of stock: one of 30,000 shares, another of 10,000 shares, and a third of 18,300 shares, which was delivered to Morgan as collateral. Against the total of 58,300 shares, Morgan paid out $10,386,179.50.

All morning long, the Exchange was engulfed in another wave of selling as share prices of every stock plunged deeply and quickly. Buyers had disappeared.

A cryptic invitation was extended by phone to Thomas Lamont and his fellow Morgan partner, George Whitney, just before noon. It came from the forty-member governing board of the New York Stock Exchange, which had set a secret emergency meeting.

It did not take place in its regular conference room but in a small cellar space tucked under the trading floor. As representatives of the bankers’ pool, Lamont and Whitney were summoned to offer input, but they were asked to draw as little attention to themselves as possible. The board didn’t want to encourage rumors that the Exchange was closing, though that was exactly what they were contemplating.

The two partners slipped out of 23 Wall Street as unobtrusively as possible and attempted to enter the stock exchange unnoticed at the designated entrance when they were stopped by a guard who adamantly refused to let them pass. Security had been tightened in response to the crowds, and no one without a valid reason to be in the building was to be allowed inside.

Even from the entrance, though, Lamont and Whitney could hear that the trading floor was in chaos. Finally the impasse was resolved, and they were permitted to descend a staircase to the narrow meeting space.

Lamont stepped into a blue haze of cigarette smoke and saw a large group of anxious men standing in every available spot or sitting on tables, their voices low, sharing their opinions about what ought to be done. They had crept out of the trading floor in twos and threes in order not to draw attention to themselves. Lamont surveyed the fearful, dog-tired faces of the governors, who had purchased seats on the Exchange for large sums of money and were all now contemplating the destruction of businesses they had worked hard to build. The extreme collapse of share prices was also putting the entire banking system at risk. Every few minutes, the latest drop in prices was announced, adding to the feeling of despair.

The haze grew thicker in the poorly ventilated room. Tickers were running an hour or more behind, and telephone lines were jammed. The pneumatic tube system that whisked stock orders, quotations, and messages across the trading floor was congested. Brokers exhausted by day after day of wild trading were unable to keep up with the paperwork.

Wooden boxes in which orders were placed had so quickly overflowed that large wastepaper baskets were substituted. One clerk had stuffed orders to be executed into one of these containers and put it into a corner for safekeeping but had then forgotten about it completely. Brokers, telephone operators, clerks, and messenger boys had by now taken to sleeping on cots or in crowded hotel rooms. They hadn’t been home in days.

Outside the building thousands of small investors—despondent, fearful, angry—had returned to the Financial District to learn whether they had lost it all. Police had been summoned to manage the crowds, but their ability to control so many distraught people was limited.

Richard Whitney reminded the roomful of bankers and traders in the basement that closing the stock market could trigger “gutter” markets to spring in the public streets—makeshift markets literally in the gutters of New York. That is precisely what had happened in 1873 and 1914, the only two previous times when the Exchange had been suspended, which only exacerbated the panic. Closing would also mean freezing bank loans that had been made using stock as collateral. And closing in response to declining prices would inflame public sentiment, prompting even more panic selling.

Lamont explained that the Big Six bankers had given up; the estimated $240 million they had contributed to support the market had had little effect. He even had to fend off accusations that the consortium had turned bearish and was now shorting stocks.

Unable to come up with any satisfactory solutions, the governors decided to wait until the end of Tuesday and then call several “special holidays” and shortened trading sessions to enable the Exchange workers to catch up. Framing the closures as “humanitarian,” out of concern for their employees, would ease tensions. They left the room in small groups, having agreed to continue to meet there each day until the crisis was over. Despite their secrecy, a rumor later spread that Lamont and George Whitney were huddled beneath the trading floor using a periscope to spy on the trading in Morgan stocks at the posts above.

Tuesday’s final tally: Billions were wiped out as the Dow continued its drop, and over 16 million shares were traded. The New York Times reported the next day that “the day was the most disastrous in Wall Street’s history…efforts to estimate yesterday’s market losses in dollars are futile.”

After the closing bell, the bankers held a late-afternoon meeting. Lamont was unusually circumspect. He told the press that the bankers’ pool would “continue in a cooperative way to support the market and has not been a seller of stocks.” There would be no J. Pierpont Morgan to come to the rescue, as in 1907. The financial world had fundamentally changed since then.

One stoic banker continued his paperwork into the night, authorizing takeovers of loan after loan, until one of his underlings finally told him the dreadful news; the bank had gone bust.

After the close of the market on October 29, industrialist and financier Arthur A. Robertson got a call from a company president asking for a loan of $200 million. He recalled that he refused “because at the time I had to protect my own fences, including those of my closest friends. His $115 stock dropped to $2 and he jumped out of the window of his Wall Street office…I must have gotten calls from a dozen and a half friends who were desperate. In each case, there was no sense in loaning them the money that they would give the broker. Tomorrow they’d be worse off than yesterday…On Wall Street, the people walked around like zombies. It was like [the play] Death Takes a Holiday. It was very dark.”

Sidney J. Weinberg, a senior partner at Goldman Sachs, waited in his office until about 11 p.m. to get a final tally of the firm’s losses for the day. The firm’s public fund had fallen from a high of more than $220 a share just months earlier to $3 that day. “It was like a thunder clap,” he recalled. “Everybody was stunned.”

As midnight approached, a young journalist took the elevator to the penthouse of New York’s Sherry-Netherland Hotel. Despite the day’s grim news, someone was throwing a celebration. The festive crowd in the elevator made way for a somber, well-dressed man in a tuxedo. As the car rose, clicking off floor after floor, he grimly declared, “This is the darkest day in America’s history.”

When the doors opened, the occupants spilled out into a high-spirited party. Jazz blared, champagne flutes were filled, and toasts were made. Such revelry would continue for some, while many others were only just beginning to realize the magnitude of their losses.

That same evening an exhausted Jesse Livermore climbed into the back seat of his Rolls-Royce and asked his chauffeur to take him home to Kings Point. He looked at the numbers on a small piece of paper in his hand, trying to grasp what they meant.

When he stepped out of the vehicle and opened his front door, he realized that something was amiss. Several paintings, Persian rugs, and valuable antiques were gone. He called out for Dorothy and got no answer. His children, his mother-in-law, everyone was gone.

Panicked, he opened the safe where his wife kept her gems: her favorite pearls, diamonds, and sapphires, a collection mostly from Harry Winston worth nearly $4 million. The safe was empty. His heart started pounding. Had she and the boys been abducted?

Downstairs, the kitchen staff was getting ready for that evening’s meal.

“Where are Mrs. Livermore and the boys?” he asked frantically.

“They have moved into the chauffeurs’ apartments, sir,” a butler told him. “We have all heard about the great crash. We are very sorry, Mr. Livermore.”

Livermore could make no sense of it.

Above the garage, in the chauffeurs’ living area, he found the missing paintings and rugs—and his wife perched on a couch. “Mousie, what the hell is happening here?” Livermore asked. “What are you doing?”

Tears in her eyes, Dorothy explained that she had learned of the terrible news on the radio. Investors had lost everything. She had assumed that they, too, were broke. Perhaps wisely, she had picked out important valuables to protect from creditors and scooped up her jewelry, remembering he had pawned her gems in the past when he had needed to raise a stake.

He smiled and told her to come to dinner, and bring the jewelry.

“Oh, J.L., you need them again?” she asked.

“No. Today was the best day I ever had in the market,” he said.

Because he had been shorting stocks, he was the one person who made money when they fell—a lot of money. His total profits plus equity over the last few days amounted to $100 million.

“We’re going to be fine. I certainly won’t be needing those jewels.”

Churchill lost money in the market, too, of course. That night, as he was calculating his losses and getting ready to return to Britain the next morning, he noticed something from his room at The Plaza Hotel.

“Under my very window, a gentleman cast himself down fifteen storeys and was dashed to pieces, causing a wild commotion and the arrival of the fire brigade,” he wrote.

Churchill did not consider this one man’s distress emblematic of the moment. What impressed Churchill during his trip was a quality of resilience, an “unshakeable faith in a golden future,” that he did not see at home. Unlike the English, Americans were not deathly afraid of making mistakes with their money because they believed that even if they were wiped out, opportunities to make it all back, and more, would continue to present themselves. “Before disparaging American methods,” he wrote, “the English critic would do well to acquaint himself with the inherent probity and strength of the American speculative machine. It is not built to prevent crises, but to survive them.”

His optimism about American capitalism was unbowed. “No one could doubt that this financial disaster, huge as it is, cruel as it is to thousands, is only a passing episode in the march of a valiant and serviceable people who by fierce experiment are hewing new paths for man, and showing to all nations much that they should attempt and much that they should avoid.”

TWENTY-ONE

NOVEMBER 6, 1929

On the evening of November 6, Lamont and his team dictated a memo to Jack Morgan, who was still in Europe. Lamont was exhausted and angry. He had just spent forty-eight hours trying to save the merger between Charles Mitchell’s National City Bank and the Corn Exchange Bank, after National City’s stock had fallen so much that it no longer made sense for shareholders of the Corn Exchange Bank to accept National City shares.

The deal, Lamont dictated in his note to Morgan, was officially off. And Lamont was furious with Mitchell, who he believed had acted in bad faith and was duplicitous. Lamont had loaned Mitchell millions of dollars the week earlier, in part because he was hoping to keep the deal from cratering—something he worried could destabilize the stock market.

Lamont explained to Morgan how, on Monday night, Mitchell had notified Walter E. Frew, president of the Corn Exchange Bank, that he was not going to move forward with the merger, to the surprise and dismay of his counterpart.

“Charles E. Mitchell had assured us no less than three times within the previous ten days that the situation was satisfactory and that he would carry out the merger terms without question. To tell the truth we had made specific inquiries from him on this point because of the large commitments involved. But he said that he had the situation in hand, and so we had dropped the matter,” Lamont wrote.

Mitchell, he said, never genuinely planned to go through with the deal if he had to pay in cash rather than just exchange shares. Mitchell, Lamont wrote, had told him “that while they had cheerfully entered into the cash commitment which amounts to $217,000,000 they had no contemplation they would be required to fulfill it.” With National City’s stock trading at $250, far below the $450 a share that would have been needed, Corn shareholders were entitled to get paid $360 a share in cash.

Lamont said that the Corn Exchange Bank CEO was “indignant” and at one point Mitchell suggested they try to renegotiate the deal on an all-stock basis. Lamont tried to convince Mitchell he needed to go through with the transaction or “the public would regard the National City Bank as having repudiated its engagements.” A group of bankers met privately about the failed deal, worried it could roil the markets, and were “unanimous in condemnation of the proposed throw-down.”

“We cannot help feeling that the action of National City Bank will greatly impair its prestige,” Lamont told Morgan. “Perhaps it will also throw a little cold water upon bank mergers on an inflated basis. That is about the only blessing we can see likely to come out of the situation.”

Later that afternoon, Morgan replied from London: “Rather horrified by your previous cable. Cannot myself estimate immediate effect of action you say will probably be taken but should think the long result would be very serious for C.E. Mitchell and his directors and the National City Bank.”

He continued: “As you know I have never been much in favor of these great bank mergers but it is evident from this case that they should not be undertaken except upon a basis of exchange of stock. Shall be immensely interested to hear as soon as possible how the public and the markets view this event.”

TWENTY-TWO

NOVEMBER 8, 1929

Two days later, in the evening, John Raskob got a panicked call. He rushed to the Greenwich Village home of his friend James Riordan, the president of the County Trust Company.

Around 4 p.m., at his home on West Twelfth Street, Riordan had sat down in an overstuffed armchair in the corner of his bedroom, pulled out a pistol he had taken from the bank’s cashier desk, and shot himself in his right temple.

Raskob was beside himself. Riordan was not merely a close business associate; Raskob had grown close to his family. Raskob especially admired how Riordan had cared for his four children after his wife’s death in 1917. A devout Catholic like Raskob, Riordan was a member of Al Smith’s “Golfing Cabinet” and had drawn Raskob into the governor’s inner circle, where friendship, business, and politics were closely intertwined. It was at the urging of Raskob that Riordan had extended a loan worth more than $1 million to the DNC in 1928 for Smith’s presidential run.

Riordan was a self-made man who got his start as a bank teller, using his congeniality and gift for personal relationships to make an improbable leap into the upper ranks of the banking industry. Catering to members of the Irish business community, primarily beef and poultry dealers, he had built the County Trust Company into a Wall Street darling; its stock had once traded as high as $1,000 a share. But all that stood behind that sky-high stock price was a relatively modest enterprise whose leader happened to have friends in high places. Riordan’s own personal accounts were a mess. Like many others on the Street, he had borrowed recklessly to buy RCA stock and had been forced to come up with $200,000 to cover margin calls during the crash. Cash had suddenly gotten so tight that he had to lay off his butler.

As the effects of the crash rippled through the banking industry, depositors began pulling cash from the County Trust Company. Now the political connections that had helped him build his business were suddenly a liability. Riordan realized he had to quickly call in loans to save the bank, but doing so would wipe out many customers he regarded as friends.

In the hours before Riordan took his life, Al Smith and another friend, Bill Kenny, had been anxiously trying to locate him, after being alerted that the gun was missing from the bank office.

When Riordan was found dead, Raskob, Smith, and Kenny made an unusual request of the coroner: They asked him to delay reporting the incident to the police or the press until County Trust closed for business the following afternoon. They were worried that when news of Riordan’s suicide hit the papers, customers would rush to County Trust branches and demand their money, creating a full-blown run on the bank. They needed time to get the bank’s house in order.

Raskob knew he could ill afford to get tied up in a bank failure. Just a week earlier, he had been chastised on the floor of the Senate for encouraging speculation in the stock market. He was called a “stock plunger” and a booster by Senator Arthur Robinson of Indiana. The criticism was so stinging he wrote a letter to Senator Pat Harrison of Mississippi responding to the accusations, saying, “I do not gamble in the stock market. I have always purchased stocks outright,” suggesting he never used leverage. He insisted in interviews that the company he planned to start would be “no invitation to speculate.”

Raskob called for an emergency meeting of the bank’s board of directors, which elected him temporary chairman, and arranged for an immediate audit of the bank’s records in hopes it would instill public confidence.

On Saturday night, Raskob finally made Riordan’s death public; he simultaneously revealed the result of the audit, affirming that the bank’s balance sheet was “unusually strong.”

Hoping to quell all the rumormongering, he invited the press to his apartment at 7 p.m. to explain what had happened. But within minutes, the questions started: Did any of the directors put up money in the past twenty-four hours to help the bank pass the audit?

“None of us put up anything,” Raskob declared, somewhat annoyed. “The bank is in the condition it was in when he died yesterday, except for the routine transactions today.”

The reporters were not convinced. Did the board try to delay the disclosure of his death on purpose?

“The directors had nothing to do with it,” Raskob said.

Al Smith, who was a board member, said, “I don’t know what took place. I was dazed myself.” However, Raskob then tried to offer an explanation: “I suppose it was a natural instinct to try to hide the fact that it was a suicide.”

Then the questions started about why Riordan had taken his life. Did he overextend himself in the market? Did he ever ask his friends for money?

“Never said a word to me,” Smith said.

“Nor to me,” Raskob said.

William H. English, another bank director, offered: “It is very understandable. Every man in charge of a financial institution at present is depressed. He sees people coming in attempting to extend their loans; and instead, he must require them to cover them. It is very hard to have to deal, day after day, with your friends, as bankers have had to do during the past weeks.”

The next day, Raskob, worried about a panic that could spread throughout the city, asked the Federal Reserve to bolster County Trust with a significant infusion of cash. Other wealthy friends of Raskob and Riordan also pledged to provide a safety net to cover withdrawals.

The bank was saved.

Raskob’s troubles, however, were not over. The bank’s directors demanded he repay the $1 million loan Riordan had made to the DNC. They needed the cash, and after all, Riordan had assured them that the bank’s guarantee of the loan was simply a technicality.

Raskob was blunt; the loan was their problem, not his. But they couldn’t cover it, either; the market had devastated their personal portfolios. Reluctantly, Raskob covered the debt.

Jesse Livermore’s reputation as a successful bear hammering the stock market down had put a target on his back. He had been receiving threatening calls and messages for over a week.

“Livermore, you goddamn liar…”

“You think you can crush the little man, destroy my family and me with your illegal operation…”

“I lost my house today, Mr. Livermore, what do you think about that?”

An inherent problem of being a short seller was the public perception that they were vultures profiting from other people’s misery. That was why they tended to avoid the press and stay out of the limelight. But Livermore had often courted the press when it suited him, and now there was no place for him to hide. Worried about his family’s safety, he hired Frank Gorman, an old friend and former police officer, as a security guard. Gorman moved into the Livermore mansion, accompanied the children to school, and shadowed Dorothy whenever she left the house. The family felt besieged by threats they didn’t understand.

By the middle of November, Livermore began to suspect the stock market was oversold. And given all the bad publicity he was getting, he started to think he could be a hero like the mythic J. Pierpont Morgan if he publicly proclaimed that he was bullish on stocks and was diving back into the market. So once again, he called the newspapers to make a proclamation.

“Jesse L. Livermore, who for many weeks past has been enlisted on the bear side of the market and is credited with having sold more stocks than any other single individual, announced to The New York Times last night his conviction that leading and standard stocks had been driven down too far,” The New York Times wrote on November 13.

There “is no reason why first-class securities should be ruthlessly thrown into the market in such fashion as we have seen in the last few trading days,” Livermore decreed. “We have seen within the last few days large blocks of these securities thrown on the open market by sellers, many of whom had no other reason than they had been gripped by fear.”

The day the article appeared, the Dow Jones Industrial Average fell to 198, its low point of the year. Even Livermore’s confidence could not breathe life into the market. In the space of just two months, the market had fallen by half, wiping out $50 billion, which represented about half the U.S. gross national product.

TWENTY-THREE

NOVEMBER 13, 1929

Herbert Hoover did not like to take meetings before 10:30 a.m. That was why it was so startling for staff members to see Secretary of the Treasury Andrew Mellon traipsing through the White House garden and slipping in a side door to meet with the president just after 9 a.m.

Inside the Oval Office, Mellon, along with Roy A. Young, governor of the Federal Reserve, and Under Secretary of the Treasury Ogden L. Mills, briefed Hoover on the collapse of the stock market and the possible economic ramifications.

Up until this moment, Hoover had not been particularly worried about the crisis. He considered it to be “purely psychological” and was concerned that anything he said could exacerbate worries. “I see no particular reasons for making any public statements about it,” he had said in an earlier press conference. He also believed that “there has been a complete isolation of the stock market phenomenon from the rest of the business phenomena in the country.”

With the stock market hitting new lows each trading session and concerns emerging that it could affect the nation more broadly—since the end of October, the Dow Jones average had fallen 23 percent, closing the prior day at 209.74—the four men huddled that morning to determine what should, or could, be done.

Mills had long been an advocate of trying to intervene—or at least making a public statement.

Mellon, on the other hand, was reluctant, believing the panic would naturally reverse. In fact, Mellon felt the panic might be considered a necessary and overdue correction that would ultimately strengthen the economy. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” he declared. The downward market was just tough medicine.

“It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people,” he told Hoover.

With nothing decided, Mellon and Mills left the White House, again through the side entrance, and headed across the lawn back to the Treasury building.

The next morning, after the market had dropped another 5 percent, Hoover received a nerve-racking letter from his own commerce secretary, Robert P. Lamont, who wrote to him that “the situation is fraught with danger” and cited a “fear of runs on the banks” in the country’s heartland.

Lamont wrote: “Substantial and conservative businessmen suggest a statement from you is needed at this time to reassure the people as to the soundness of our banking and business institutions…and to prevent an already critical condition from becoming disastrous.”

Hoover opened another letter, this one from his friend William Randolph Hearst, who also implored him to make a statement: “Lack of confidence is contagious; but, on the other hand, so is confidence contagious. And, in the opinion of many of your earnest friends, some reassuring utterance by the President of the United States…would do much to restore the confidence of the public.”

Hoover could hardly ignore the economic tremors any longer. Though he had long anticipated a Wall Street pullback and even desired it to some degree—how else would speculators ever be reined in?—this was far beyond his wildest imaginings. Black Tuesday, as it would later be named for the 11.7 percent plunge in the market, sent shockwaves across the world.

Previous market crashes, like the one in 1920, had been followed almost immediately by sharp drops in business activity—bankruptcies, layoffs, wage cuts. Was there any reason to believe the same wouldn’t occur this time?

Reluctantly President Hoover held a strictly controlled press conference on November 15, spoon-feeding the press a handful of official quotes, as he liked to do. Reporters hated this dull, lifeless routine. The language was gray, technical, and utterly lacking in empathy or emotion.

“In market booms we develop over-optimism with a corresponding reverse into over-pessimism,” went the statement. “They are equally unjustified but the sad thing is that many unfortunate people are drawn into the vortex of these movements with tragic loss of savings and reserves. Any lack of confidence in the economic future or the basic strength of business in the United States is foolish…My own experience has been, however, that words are not of any great importance in times of economic disturbance. It is action that counts.”

Hoover prided himself on being a man of action, having had a long and impressive track record of dealing pragmatically with large and complex emergencies, from famines across Europe to natural disasters like floods. Crisis was his métier. This one seemed straightforward enough. There was no reason that panic in New York should cause panic elsewhere.

The president cabled governors across the country and advised them to speed up construction of roads and public buildings as a means of solidifying employment, and invited business leaders to the White House to discuss economic issues.

Over the next week, a parade of executives dutifully made their way to Washington for meetings. Publicly, they backed the president, though some weren’t too clear on precisely what he was asking of them. After attending Hoover’s meeting of industrialists, George B. Cortelyou, president of Consolidated Gas, told an acquaintance, “I was never so confused in my life.”

Henry Ford, following a three-hour meeting at the White House on November 21, surprised Hoover by handing out a statement announcing wage hikes at his auto plants, his contribution to keeping the economy humming. Ford loathed Wall Street—to him, such traffickers in paper wealth represented “a serious withdrawal of brains from business”—and he happily seized the chance to upstage the president by playing the heartland hero in Wall Street’s moment of crisis.

Behind the scenes Andrew Mellon continued to quietly lobby for the government to stay out of the mess and let the economy follow its natural course. He proposed a national tax cut and supported the Federal Reserve’s reduction of the discount rate, but that was as far as he was willing to go. The public wasn’t going to be fooled by happy talk, Mellon believed. In fact, it might even have the opposite effect. Mellon had no sympathy for speculators. Those who lost money “deserved it,” in his view, and should bear the full burden of their folly.

Mellon, however, had no sway over the president. Sensing that the country’s spirits were flagging, Hoover became convinced that citizens merely needed to be cajoled out of their pessimism. The problem was that Hoover—“constitutionally gloomy,” in the words of newspaper editor William Allen White—lacked the personality and rhetorical gifts to rally the country’s mood.

“The President has great capacity to convince intellectuals,” White wrote to a friend on December 3, 1929. “He has small capacity to stir people emotionally, and through the emotions one gets to the will, not through the intellect. He can plow the ground, harrow it, plant the seed, cultivate it, but seems to lack the power to harvest it and flail it into a political merchantable product. Probably he would fail terribly if he tried to do the other thing. He must be what he is. What he is is important and necessary, but I don’t think he can sublet the job of emotional appeal.”

By now, though, the forces of public opinion were moving too quickly for Hoover and his allies to counter them.

It didn’t take long for Carter Glass to resume his war against Charles Mitchell. Just days before Thanksgiving, on the floor of the U.S. Senate on November 22, during what was supposed to be a debate over the endlessly argued tariff bill, senators began trading barbs over who had been responsible for the “orgy of speculation” that had crashed the market. An editor at The Washington Post had just published an opinion piece that attributed the blame squarely on the Democrat-dominated Senate, of all places. After a Republican senator entered the editorial into the Congressional Record, Senator Furnifold M. Simmons of North Carolina rose to defend his fellow senators.

“When did Wall Street discover we were responsible?” Simmons asked.

“Not until speculation reached its peak and high prices began to fall. When did the administration discover it? For weeks and months every section of the country has been drained of credit to feed the orgy of speculation. But what was the administration doing? What was the secretary of the treasury doing? Was he doing anything to stop it? On the other hand they were issuing daily statements that everything was safe. But speculation went on until the tumble came. The little fellows were slaughtered like sheep, and not until the slaughter was complete did the administration move. To say the Senate had anything to do with the crash is absurd.”

Glass believed he knew exactly who was to blame.

When Glass had his turn at the Senate podium, he went straight after Mitchell. “He is the man,” Glass said, “more responsible than all others together for the excesses that have resulted in this disaster.” Mitchell, Glass continued, was the “chief offender” for his role in extending money to brokers even as the Federal Reserve was trying to dampen speculation by raising interest rates.

Glass’s attack had the desired effect. The following day Mitchell’s picture appeared on the front pages of hundreds of newspapers around the nation as the culprit for the market collapse.

Back on Wall Street, as the month of December began and the market tried to stabilize, William Durant was nursing his losses. He had never gotten out of the market in October, convinced that “if the stock of 15 to 20 sound corporations could be supported that the great panic could have been prevented,” according to his personal secretary, Aristo Scrobogna. He had tried, in vain, to get his friend Bernard Baruch to remain in the market in hopes of cushioning its fall. Baruch didn’t agree: “I’m sorry you can’t see it my way, Willie,” he said.

Durant was furious about the market’s collapse—and, in his rare introspective moments, with himself. He had helped inflate the boom and now worried he might be cast as one of its villains.

When a young journalist from the New York World-Telegram, Earl Sparling, approached him about an interview, he decided to refocus the blame—on President Hoover.

Up until that day, he had kept his meeting with Hoover back in April a secret. After all, he cared about access to powerful people and the White House was at the top of that list. But he felt that his warnings to Hoover that a financial disaster was imminent should be known—the ultimate “I told you so.”

Sitting in his old office, the five telephones sitting silently on his desk along with a sign that said “Please Do Not Smoke,” he broke down to Sparling.

“We may as well tell the truth and put the blame where it belongs,” he said. “It’s up to Washington now.

“We have stepped aside. The market is leaderless. Eventually we will take control again but not until something is done to limit the Federal Reserve Board to the functions stated in the law that created it. Those functions are to stabilize money rates and prevent panic. It did neither. Call money jumped to 20 percent and the worst crash in history resulted.”

He revealed, in great detail, his failed mission to the White House.

“I told the president how I felt about the situation,” Durant said, “and he listened with interest. I believed that I was doing a service to the country and to the president himself in telling him of what I believed was ahead.”

The journalist asked Durant if he had described to Hoover the kind of crisis that ultimately enveloped the market and the economy.

“I intimated as much to him.”

Despite his losses, Durant seemed wistful about his career. He opened the top drawer of his desk and pulled out the original bank book he had received when he opened his first account forty-three years earlier.

“Am I broke?” he asked. “Well, I’ll tell you. I’m the richest man in America…” he said, taking a moment to pause with a smile on his face, then adding, “in friends.”

TWENTY-FOUR

DECEMBER 19, 1929

Less than a week before Christmas, on the afternoon of Thursday, December 19, Charles Mitchell was at his office ruminating about how to put his finances in order before the end of the year. Like the handful of men he considered peers, he had made millions of dollars in salary, but all those shares of National City he had bought in October—the stock was now trading at $212, down from the average price of $367 he had paid—had saddled him with monumental losses on paper.

Those losses could become uniquely valuable if he were able to sell the shares and use the losses to offset his income—significantly reducing his tax bill, perhaps even wiping it out entirely. Yet for the chairman of National City to unload shares in the very company he led was hardly straightforward; it risked sending precisely the wrong message to the public. Mitchell toyed with the idea of selling his stock to the National City employees fund but decided against it, convinced he “would be strung from a telegraph pole” if his employees knew he was selling his shares to them in order to capture a tax break for himself, especially if the stock were to continue to fall.

That afternoon, he had a brainstorm: What if he sold the shares to his wife, Elizabeth? That way he could capture the loss for tax purposes and keep the sale under wraps. And he wouldn’t lose the upside on the stock, which he was certain would soon rise.

After work that night, Mitchell rushed home to tell his wife about his idea, assuring her that National City was in great shape and that its stock was seriously undervalued. They couldn’t lose.

Mrs. Mitchell’s brother, Joseph Rend, happened to have encouraged her to buy stock in National City a month earlier when they met at the Drake Hotel, saying that he considered them cheap and had bought several thousand shares.

The next morning Mitchell called one of his lawyers, Harry Forbes, into his office. Mitchell told Forbes he needed his legal advice and described the transaction that he wanted to complete before the end of the calendar year. Mitchell said he considered selling the shares in the open market but “to throw on the market a block of stock of that magnitude would certainly bring very much loss to the shareholders of the bank.” If he sold to his wife, on the other hand, there’d be no risk of driving the price down.

Forbes asked Mitchell whether he planned to shift the J.P. Morgan debt to Elizabeth. He told him no: “This was but a part of a large block of stock that I had there as collateral for a loan very much in excess of the purchase price.”

Forbes advised him, “You will have to notify J.P. Morgan & Company so that Mrs. Mitchell will receive these dividends.” Mitchell demurred, as that would necessitate an uncomfortable conversation with Thomas Lamont and George Whitney. “This stock is not in the name of the Morgan firm or a nominee, but it is in the name of the nominee of the National City Company,” Mitchell told Forbes. “Therefore, if I notify them of the transfer of the title to those shares, Mrs. Mitchell will receive the dividends from them, and it will be unnecessary to notify Morgan.”

They agreed that Elizabeth could purchase the 18,300 shares from her husband at a share price of $212, or about $3.8 million total. Rather than draw up formal contracts, they decided the best way to handle the purchase was in letters between them, which they had done before on other transactions. Mitchell dictated the letters—one from his wife to him and another from him to his wife—and brought them home. He telephoned Elizabeth to make sure she would be home when he got there.

That night, in her sitting room on the third floor of their home before dinner, Mitchell assured Elizabeth that Forbes had advised him that this was a “proper sale” and that he could “comfortably carry those shares for her”—meaning pay the interest on the loan held against them—for a period of nine months, with the intention of ultimately buying the shares back.

Elizabeth initially was not eager; she had been advised by Edward Barrett, a vice president at National City who looked after her financial affairs, that she was already giving a bit too much to charity.

When Mitchell first told her of his stock purchase back in October, she had gently chastised him. “Well, I do not see that you have any moral responsibility and it seems to me that you have done a thing that is very altruistic, possibly too altruistic.”

Like a true salesman, Mitchell assured his wife that he was “delighted that she could have the advantage of what I considered profit that would come from the transaction.” She read the letters and signed them, saying that she was hopeful she would profit. “Well, I think you will and I hope you do,” Mitchell told his wife.

TWENTY-FIVE

DECEMBER 21, 1929

Spirits on Wall Street ebbed and flowed through the final weeks of 1929 as the market itself ebbed and flowed. But as Christmas approached, the bright lights of New York City did not so much as flicker. Shoppers, bundled in winter coats, admired the extravagant windows of Saks Fifth Avenue, created for $4,000 by the Ukrainian sculptor Alexander Archipenko, while ignoring a volunteer for the Salvation Army dressed as Santa Claus collecting donations in front of the store. Ringing his bell, Santa declared, “You don’t know conditions among the poor!” On Thirty-Fourth and Fifth Avenue, a giant pit had been dug where John Raskob’s Empire State Building would soon rise. Eight blocks away, the Chrysler Building was also well under construction.

To most New Yorkers, these soaring landmarks seemed better indicators of long-term prosperity than the transitory fluctuations of the stock market. Some sensed in the market sell-off a certain righting of the world, perhaps even a cause for celebration. The madness was over! The society season came and went much as it always had. In fact, it was oversubscribed. A few took perverse pleasure in the comeuppance of friends and acquaintances who’d been insufferable on the subject of the success of their personal investing.

“The collapse of the market, over and above the pain, couldn’t help but be amusing,” E. B. White noted acerbically in The New Yorker. “It is amusing to see a fat land quivering in paunchy fright. The quake, furthermore, verified our suspicion that our wise and talky friends hadn’t known for months what they were talking about when they were discussing stocks.”

Exactly one week after Black Tuesday, Jimmy Walker had been reelected as mayor of the city, gaining 61 percent of the vote to that of 26 percent for his challenger, Fiorello La Guardia, a self-styled man of the people running on the Republican ticket. The Socialist Party candidate came in a distant third with 12 percent. Walker’s easy reelection was a clear indication that voters overwhelmingly opted for a continuation of the status quo.

Walker was as much an idol as a politician. Did he govern? Who knew? And it didn’t matter in any case. Walker was a dazzling, aspirational figure—an Irish street kid from Greenwich Village who had climbed the ladder of success to the highest rung. He was said to change his outfits three times a day. He dated starlets, openly consorted with mobsters, frequented any number of speakeasies, and had the magical ability to stay a half step ahead of the law.

Two days before the end of the year, with the city resting after Christmas, Walker gave himself a hefty raise from $25,000 to $40,000. By the rules it should’ve been noted in the budget he presented in October, before the election, but he hadn’t wanted to take any chances. One of the men who ran against him noted Walker’s application of the “Tammany technique, which is: raise the salaries of city employees a little before the election and your own a lot after the election.”

An essay by John Raskob, overlooked in November during the market tumult, now emerged as a popular topic of conversation. The United States, argued Raskob, should move from a six-day to a five-day workweek. It would not only give Americans a well-deserved break from the daily grind, it would promote a new kind of economic development. “It is only a few years since the general Saturday half holiday was an innovation, stoutly resisted in many quarters,” he wrote in the North American Review. “The mileage travelled by automobiles on American roads any fair Sunday must pretty nearly equal the mileage covered on the other six days of the week. What would happen if to a full Sunday holiday we add a full Saturday holiday? There will be an immediate and tremendous increase in the use, which is to say in the consumption, of automobiles, tires, gasoline, oil and roads.” He added: “With two full play days ahead of them people will start out Friday evening or Saturday morning on longer trips…More hotels and tourist camps will be called for…People moreover will need extra suits and dresses, camping equipment, fishing tackle, sports goods.”

On its financial page, The New York Times wrapped up the year with several concise bits of analysis, including an article headlined “Some Popular Theories Which Prevailed in 1929 and How They Were Tested by Events of the Autumn.” Number one was “That this is a new economic era to which old economic precedent no longer applied.”

The mood of The New York Times’s financial writers was sober and contemplative but not overwhelmingly pessimistic. The takeaway was that while there had been a reckoning, lessons had been learned. There was even a note of optimism in the observation that the crash had not induced “instantaneous shut-downs and unemployment, such as had followed other panics.” None of the big banks had failed, and no major companies had declared bankruptcy. So maybe this time would be different. One could only hope. The stock market crash didn’t even rate as The New York Times’s most important news story of 1929. Instead, editors selected Richard Byrd’s daring eighteen-hour-and-forty-one-minute flight to the South Pole and back, a feat for which Congress made him one of the youngest rear admirals in naval history. The press preferred to celebrate heroes rather than dwell on failure and defeat.

Lamont’s deputy, Martin Egan, in a memo to his counterpart at J.P. Morgan in Paris, captured the prevailing mood on Wall Street:

You will be wondering about causes but I doubt if anyone will ever disclose a specific thing that produced the debacle. It seemed to me that the time came when a sufficient number of people believed the hour to sell had come. Their action started a wave of fear and everybody tried to sell at once. The mere machinery of the exchange and of the brokerage houses could not stand the strain and that added to the panic that ensued.

The air is full of all kinds of stories as to the origin of the panic but as far as I know none of them are true. The air is also full of hard luck stories and estimates of the effect of the panic upon general business. Naturally there have been tremendous individual losses, some of which were partly recouped. And I think it is a little early to get the real effect on business.

Michael Meehan, the pool operator, batted back rumors he would be filing for bankruptcy by telling his bookkeeper: “Jack, I understand I’m broke. Guess we’d better give all the boys in the office a two weeks’ bonus to prove it.”

For the final hour and a half of trading in 1929, the 369th Infantry Band—made up of thirty Black musicians—played on the floor of the New York Stock Exchange. It was an incongruously festive end to what had been a deeply painful year. The galleries overflowed with the families and invited guests of Exchange members. After the giddy heights of summer had given way to the soul-crushing depths of autumn, everybody on the floor felt the need to expel once and for all the demons of 1929.

“At one of the trading posts,” reported The New York Times, “the newspaper record of the trading on October 24, the 16,000,000 share day when the greatest breaks in prices occurred, was burned as an indication of desiring never to be reminded of it again. E. H. H. Simmons, president of the Exchange, personally sounded the gong at 3 o’clock to announce the end of trading for 1929. As the final bell was still reverberating, the members broke into a clamor. The din reverberated through the city, audible as far away as Broadway. The outbreak in celebration of the passing of the year lasted over five minutes, members yelling until they were hoarse.”

The Dow Jones closed 1929 at 248, down just 17 percent for the year. Bankers and traders could look at that number and reasonably say to themselves, “Not so terrible. We’ve seen worse.” And, in fact, many of them had seen worse, and not so very long ago. In 1921, the Dow Jones ended the year down almost 33 percent, and everyone remembered what happened next. Stocks went on a tear, up 12 percent the following year, then 21 percent the year after that. Panics and crashes were a natural occurrence. Even the smartest investors had their bad days, bad weeks, bad years. What defined you was how you responded. The best investors were always looking ahead to the next trade.

At the same time, there was something that felt different about that December. Confidence, real confidence, was hard to find. As much as Wall Street traders were thinking about potential bargains, the common man—who had gotten drawn into the market as he saw it go to dizzying new heights and worried he was missing out on riches, only to lose everything—faced a more precarious future: When would that man return to the stock market? When, in fact, would he have money to spend on much of anything? Stock market losses had cut deeply into household funds and the availability of credit. There was a shift in mindset, not fully realized by the stock market but very real to most Americans, that cast a pall over the whole country.

PART II

By the late spring of 1930, a stock market rally that had, in fits and starts, recovered almost half of the losses from the previous October came to an unceremonious end. There was no replay of spasmodic selling on the floor, and no singular moment of high-stakes drama that people would recount to their grandchildren. The air simply leaked out of the balloon, day after day after day. Those who had scooped up “bargains” in late 1929 held out for as long as they could, then cut their losses. Some got out in time; most didn’t. Afterward, stories circulated about those who had managed to escape early—like Joseph Kennedy, the Boston bootlegger turned movie-studio dealmaker, who claimed he knew it was time to sell when he heard shoeshine boys giving stock tips. Short sellers cleaned up. Stocks ended 1930 down by a third for the year, then fell by half the following year. The collapse was not a moment. It was a relentless unraveling.

Wall Street called it the “Hoover market.” It certainly wasn’t theirs. Ben Smith, a trader nicknamed the Jolly Bear, was said to short the market whenever the president made a statement. No matter what he said, prices always went south.

Reprising the role once held by Sunshine Charlie Mitchell, Richard Whitney, who had become the president of the stock exchange, traversed the country, visiting business groups in major cities and spreading the gospel of an ever-resilient stock market. With each passing day, however, the country had less and less appetite for Wall Street’s self-serving rhetoric. There were bigger problems, like mass unemployment, shanty towns, and breadlines. The Great Depression had begun.

The crash may not have caused the larger business depression, but it certainly had a powerful effect. The sharp decline in asset prices left precious little equity to cover great quantities of debt, eviscerating the credit markets. When there’s no collateral that seems reliable, only the foolish lend. Credit, the lifeblood of the modern economy, was nowhere to be found. Americans didn’t trust banks anymore. Money was pulled out of savings accounts and stuffed into mattresses. That really happened.

New thinking was proposed about how the government could manage the economy through such a crisis. Just that spring, renowned English economist John Maynard Keynes published A Treatise on Money, seven years in the making, which argued that public spending was essential to breaking bad economic cycles. Later he would coin the term “paradox of thrift” to explain how people’s natural impulse to save money during times of economic uncertainty has the effect of worsening the economy because no one is spending. This, he would later contend, is why the government has to step in.

But those lessons weren’t yet widely understood or embraced, not in Washington or on Wall Street. Midway through the summer of 1930, Washington was still running a budget surplus, but Hoover believed that spending it on relief efforts would impede the recovery. The indefatigable Whitney went before a Senate committee and advised that government salaries be cut as a way to spur private investment. Wall Street was fearful of an expansive and assertive Washington.

When Hoover was considering whether to sign the Smoot–Hawley tariff bill, which had been inspired by his own campaign promises to help ailing farmers, Thomas Lamont made an ardent personal appeal for a veto. “I almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley–Smoot tariff,” he said. In its crude rejection of global trade, Smoot–Hawley was a protectionist bonanza, an attack on the worldview Lamont had spent his career refining and promoting—international finance as the fulcrum of prosperity and peace. More than a thousand economists signed a letter condemning it.

For seventeen months, Washington had been debating Smoot–Hawley, which would raise tariffs on imported goods to an average of nearly 60 percent. Many prominent Democrats, including Carter Glass, excoriated it at every opportunity. Hoover had major reservations about the bill, describing it to aides as “vicious, extortionate, and obnoxious.” But in the end, it came down to the heartland versus Wall Street, and he knew which side he owed his political debts to. Hoover signed the bill into law on June 17, 1930. The price of grain collapsed overnight, while trade between the United States and the rest of the world fell by 60 percent within a year.

Throughout 1930, small banks across the country began to fail. Meanwhile, Hoover and Mellon’s conservatism was reinforced by their insistence on maintaining the gold standard. Because the U.S. currency was convertible to gold, any big moves—to boost government spending, loosen credit, or otherwise expand the money supply—could cause people to start turning in their U.S. greenbacks for gold, as they were allowed to do. In the worst-case scenario, it might start to look like a run not just on the banks but on the U.S. government. Hoover’s instincts were exactly like those of millions of Americans, including bankers: Hold on to your wealth at all costs.

It is at this point that the drama shifts. The Great Depression is now rolling on, unchecked. Hoover is flailing. Franklin Delano Roosevelt is about to eye his big shot. The country is hungry for a hero—and for villains, too.

TWENTY-SIX

SEPTEMBER 30, 1930

Thomas Lamont celebrated his sixtieth birthday on the last day of September 1930. He spent it as he did most days: at his desk at J.P. Morgan working the phones, chatting with reporters, projecting the abundant confidence about the world and his place in it that had always drawn men to him in good times and bad.

Lamont and Florence were still settling into a new routine. They’d started spending their weekends at a new place in New Jersey, an estate they called Torrey Cliff in the Palisades, perched four hundred feet above the Hudson River, surrounded by a working farm and pristine woods. On Monday mornings Lamont commuted to Wall Street on his seventy-two-foot motor yacht, Reynard II, chugging down the river at eighteen knots. While his valet dressed and shaved him, he perused the newspapers and dictated letters to his secretary.

The year had started off on a promising note. In the winter Morgan had sold all the shares it had purchased to stabilize the market during the panic, booking a modest profit. In the spring Lamont traveled to Rome to meet with Mussolini—who he loved to tell friends had once told him, “France is like a very rich old lady who looks down upon her poor relatives living on the peninsula!” After Italy, in a far less glamorous endeavor, he then spent much of the summer trying to defuse a debt crisis in Mexico.

As vexing as the economic difficulties were at home, the international situation looked worse, and it was there that Lamont and the firm were paying the closest attention. They had, after all, played a critical role in knitting together the world’s largest economies, and it was their conviction that these relationships, if maintained, would bring not only peace but prosperity for generations to come.

To the outside world Lamont remained resolutely upbeat. On September 19, The New York Times ran an item remarking that “Mr. Lamont, who is in vigorous health, has the reputation in newspaper circles of never having a day so arduous that it cannot be interrupted for a minute or two while he answers questions of financial reporters.”

The discussions he was having with his partners behind closed doors, however, were of a decidedly different tenor. Only in circles of complete trust could the men of Morgan say what they knew in their hearts to be true—that recovery was a long way off. “To me this is a first class deflation after a first class inflation,” Russell Cornell Leffingwell wrote to Lamont in the summer. “It is a healthy purge that is being put through the economic body after a seven years’ debauch.”

“Business here,” Lamont admitted to a friend, “is slower than death.”

Wall Street was beginning to change in ways that Lamont could no longer steer or influence. His birthday coincided with a market plunge that took prices to their lowest level of the year to date, as well as the collapse of a sizable investment house known as J. A. Sisto & Co., the first significant casualty on Wall Street since the crash. Up until then, many market observers had celebrated the resiliency of financial firms, but the media was growing wiser and more skeptical about the financial world with every passing day.

Lamont’s deputy, Martin Egan, sent him a copy of a book titled People vs. Wall Street, which Egan noted “seems to have been written by a smart alec agitator and is based largely upon rumor, gossip and statements which have been made from time to time by various of the partners, other bankers and industrialists, which have been lifted bodily from their context. I doubt whether any sane person would pay the slightest attention to this book.” Lamont was unimpressed. To him, the author, William Floyd, was a lightweight. “I don’t think anybody will be stupid enough to read his book,” he wrote back to Egan.

People vs. Wall Street may not have been read, but it was a sign of things to come. A young writer named Matthew Josephson, who had started his career as a poet and literary critic, soon hit his stride as the must-read chronicler of Wall Street excess and economic dislocation. His incisive stories were much harder to dismiss.

In 1929 Josephson, who had worked on Wall Street before becoming a writer, traveled around the United States, writing about the effects of the mass market in a series of articles for The New Republic. These articles were quite a bit different in substance and tone from the relentlessly upbeat stories that characterized press coverage in the 1920s. “One of the most dangerous aspects of the new order: great numbers of talented men and women spend their days and nights thinking only of statements about cigarettes, deodorants, sanitary paper, automobiles and movie actresses,” Josephson wrote in a typical passage. “The progressive cultural stupefaction of such a numerous educated class is itself a major tragedy.”

That article was published on June 5, 1929, when the stock market was on one of its last sprints. By 1930 such rueful sentiments were starting to appear everywhere in the press.

For most of the roaring twenties, financial journalism had not covered itself in glory. The legendary muckraker Ida Tarbell, known for her pathbreaking foray into the complex dealings of the Rockefeller family and Standard Oil, remained active into the 1920s, but her later work lacked the disruptive verve that had once characterized her writing. She ended her career writing credulous portraits of Benito Mussolini and General Electric chairman Owen Young.

The journalistic tone of the decade was set by the upstart Time, which did virtually no original reporting of its own. Instead, editors scoured newspapers from across the country for usable material and repurposed it into zippy news bits and supercilious profiles sprinkled with Ivy League witticisms.

When Wall Street needed a particular story covered in the papers, it had people in place. It was widely believed that there were reporters in every major newsroom on the take, a situation that had existed for as long as anybody could remember. The great J. Pierpont Morgan was known to have countless journalists in his pocket.

Matthew Josephson was not that type. In the months after the crash, he wrote about his disappointment at seeing Hoover “treating the sinking economy as a morale problem.” A signature tactic of the Hoover administration was to sponsor billboards, placards, and handbills admonishing Americans to “BUY AND HELP KEEP UP PROSPERITY.”

From his home in Connecticut, Josephson raged at Washington’s inaction. “Hoover and Mellon had the mentality of parsimonious rentiers and therefore strove as long as possible to prevent drafts on the Treasury for public relief,” he wrote. “They were for letting the economy find its own equilibrium, even as it brought us to a social abyss of almost universal unemployment.”

To Josephson, Wall Street was equally blind to human suffering, and he set about exposing it in a series of stories for the hot upstart magazine The New Yorker.

Josephson brought a jaundiced eye to the once-great men of the Street who were now struggling to repair both their reputations and their personal balance sheets in the post-crash world. Introducing Ben Smith—the Jolly Bear—to his readers, Josephson described him as living “in a world of deeper realities than most of us can ever know.” Why? Because Smith, a short seller, was an avowed skeptic of every rally. “We get our misinformation from the morning papers, from the White House and the Capitol, from the mouthpieces and the flunkies and the parrots of the supposedly great, the legislators, the financiers,” Josephson wrote. “We buy what we are told to buy; to believe what we are told to believe, starve when we have to, docilely, unromantically.”

But Josephson’s push against Wall Street was just a prelude to a writer who came out of nowhere to set it ablaze and made the country pay close attention to the financial world’s behavior. His name was Julian Sherrod.

Before becoming an author, Sherrod had been a bond salesman for Mitchell’s National City based in New York. Like so many Americans, he had believed in the market so thoroughly that when the crash came, he was sure it was a fabulous buying opportunity. So he did what had become second nature—he borrowed a ton of money and plunged back in. He ended up owing $55,000, an extraordinary amount he doubted he’d ever be able to repay. He was furious not only with himself but with the people he had worked for and believed in, including none other than the great leader, Charles Mitchell.

Utilizing internal memos and notes he had taken on the job, Sherrod channeled his rage into a 121-page manuscript that he banged out in just two weeks. He titled it Scapegoats: By One of Them and had ten thousand copies printed.

Sherrod purposely didn’t mention National City or Mitchell by name in the book—Mitchell is simply referred to as “Chairman”—but it was no secret whom he was talking about. “The past twelve years I have given my best services to one of America’s Greatest Financial Institutions engaged extensively in the world-wide retail distribution of securities,” he wrote. “I have accepted without question everything I was told and executed every command—and command is the correct word—emanating from my superior officers at the home office. My Faith was childlike, but events have destroyed this Faith…I can now see that I have not been a banker. I really wonder if I have not been a pirate.”

Sherrod went on to deliver a startling revelation. At the same moment that National City salesmen were being pressured to push shares of Anaconda Copper onto their clients in August 1929, Mitchell, a board member of Anaconda Copper, was busy unloading his. “Chairman has just made the largest sale of Anaconda Stock registered by any member of our organization,” Sherrod wrote. “The noise and rumble which you hear is the founders of this Bank trying to get out of their graves.”

Scapegoats became an overnight sensation, so much so that the Dallas bank he owed money to went to court seeking to make the book its property.

After the initial print run was exhausted, a major New York publisher snapped up the rights and turned it into a national bestseller. “Wall Street and bankers are doing a lot of talking about this book,” went one newspaper review, “but it is equally for the ‘sucker’ providing he has money left to purchase it.”

In his prime, Mitchell had always been able to charm the press. Now as Sherrod’s little book climbed the bestseller list, his once-lofty reputation was being brought down to earth.

TWENTY-SEVEN

OCTOBER 28, 1930

John Raskob bustled through the lobby of 711 Fifth Avenue on Monday night and took the elevator to the radio station WEAF on the thirteenth floor. The station was owned by NBC, a broadcasting company that was growing so fast it had already committed to move to a new building complex that had just begun construction called Rockefeller Center.

Raskob planned to deliver a lengthy address at 8 p.m. on a program called In the Nation’s Capital, hoping to dampen a topic of conversation that was spreading across the country—about himself.

The month prior, he had awoken to a spate of articles that exposed him for hiring Charley Michelson to run the covert publicity effort against President Hoover. “The goal set for [Michelson] was to ‘smear’ Hoover and the Hoover administration,” Scribner’s Magazine reported. “That is what he is there for and all he is there for.”

The report revealed how Michelson, under Raskob’s orders, had fed reporters across the country damaging stories about Hoover. “He knew if he was to get his anti-Hoover attacks into the larger and more effective papers it had to have a real news flavor…Accordingly, his game has been largely to ‘plant’ interviews, statements, and speeches with Democratic members of the Senate and House of sufficient standing and prominence to make what they say news.”

The story took on a life of its own, with ever-more-provocative headlines like “Raskob Plot to Slander Hoover.” John Q. Tilson, a Republican congressman from Connecticut, described Michelson as “John J. Raskob’s personally underwritten propagandist,” tallying up twenty-seven instances in which Michelson, often using other people to smear and misrepresent Hoover, placed such stories, including blaming him for the stock market crash in 1929.

Senator Arthur Robinson declared that Raskob was responsible for “the most unfair and vicious attacks on the president of the United States that have been known in this country. Facts and decency have been thrown to the winds and misrepresentations by innuendo and insinuation have been ground out of the mill in veritable torrents.”

It had gotten so bad that writers were even saying that Raskob was responsible for the Depression. As an editorial in the Marion Leader-Tribune declared, “Now, we know what has been the cause of the business depression. There is no need to look further. Not a bit. It is all Raskob’s fault…Is he not a heavy holder of stocks? Was it not Raskob who advised people to speculate? Yes sir, it was Raskob. Raskob spoke and millions followed. Raskob championed American investment and with that espousal there was a tragedy. For had not Raskob advised investment, there would not have been a panic.”

Raskob hoped that answering his critics over airwaves might shift the attention away from himself.

As the radio broadcast got underway, Raskob described the stories attacking him as “childish” and blamed them on the “irresponsibility of panic minds.” He asserted, “No one ever heard me utter one unkind word about Mr. Hoover or the president of the United States. This does not mean that I or the Democratic Party hesitate one second in offering constructive criticism of the actions of Mr. Hoover and his administration.”

Raskob tried to shift the focus to popular causes like his proposal for the five-day workweek, adding a new rationale—giving Americans more time off was necessary to move the U.S. economy forward. “The only way to increase production and provide work is to increase consumption,” he argued. “In addition to adopting the five-day week we should also arrange to have all legal holidays except perhaps Christmas celebrated on Mondays. This will provide a three-day recreational period around each holiday.”

Raskob also made the case for the elimination of capital gains taxes to “give greater encouragement to capital to engage in speculative enterprise, which is bound to result in greater employment.”

While Raskob may have never uttered a single negative word about Hoover on the radio, he accomplished what he set out to do and left the unmistakable implication that the president and his party were to blame for the economic malaise.

In a separate statement, Raskob took explicit aim at the press—“I wish to notify the newspapers that I regard this as a libelous utterance and must hold any agency that publishes it responsible”—while taking a couple of potshots at the president. “Not only did I not sell short in the market that suffered a collapse after almost every optimistic prophecy by President Hoover and his executive departments, but never at any time since the advent of the present administration, which of course, embraces the whole of the Hoover panic from the crash of a year ago to this hour, did I either personally or through agents, either directly or indirectly sell short even a single share of stock or any commodity.”

TWENTY-EIGHT

NOVEMBER 5, 1930

On the morning of November 5, 1930, President Hoover’s political fixer, James MacLafferty, slipped into the Oval Office to report the results of the previous night’s midterm elections. MacLafferty took the president through the numbers. Even accounting for the disadvantages incumbent parties typically face in midterm elections, the results for Hoover’s Republicans were grim. The Democrats gained eight Senate seats, fifty-two House seats, and seven statehouses, including Ohio and Massachusetts.

“It looks bad,” said the president glumly as he got up from his chair to pace the room. Ever the engineer, he was trying to wrap his mind around this new set of parameters.

Unlike his boss, MacLafferty was a political animal. Though lacking an official title or even a regular paycheck, the former congressman from California had the license to drop in to see Hoover at any time without an appointment. Using a back entrance he simply came and went whenever they had something to discuss, often late at night.

MacLafferty viewed Hoover as a conscientious objector to the Washington game. By not flattering reporters or observing the little rituals that made reporters’ jobs easier and their coverage friendlier, Hoover, he believed, was taking a principled stand. Catering to the press was politics; governance was a separate and higher realm. Now that he was in office, why did he have to play tit-for-tat games at all? Save all that for the campaign trail.

In good times, Hoover could get away with neglecting the press. But in the reputational quicksand that was 1930, it was political suicide. Hoover refused to respond to any attacks on him in the papers. But in taking what he saw as the high road, Hoover was an easy target for Charley Michelson’s attack machine at the Democratic National Committee. “A President cannot with decency and with proper regard for the dignity of his office reply to such stuff,” Hoover later wrote of Michelson’s work.

Privately, he couldn’t stand Michelson and blamed him for coining a term, “Hooverville,” to describe the homeless encampments popping up all over the country—a term he could never shake. Hoover had a porcelain Ming vase on his desk with a painted little drawing of an “ugly blue dragon” on it. So obsessed was Hoover with Michelson that he took to calling the dragon “Charley.”

Nineteen-thirty had, so far, been a year of bad numbers. Hoover seemed to understand the political implications, at one point telling his colleagues, “Three and a half years would satisfy me”—as if to acknowledge the possibility that he could be a one-term president. “I don’t give a damn,” he said, “whether I get renominated or not.” Whether Hoover was being honest with himself at that moment was less clear: “He wants another term more than he wants anything else,” one of his aides wrote in a diary entry.

While the crash had sent panic rippling through the fraction of the population that had money in the stock market, the economic pain in the months since then had spread to every corner of the country. Unemployment nearly tripled, from three million to more than eight million. A quarter of America’s factory workers lost their jobs. More than 1,300 banks had failed, mostly in small towns and rural areas. In the less affluent districts of big cities and the vast areas beyond metropolitan centers, daily life was unraveling to a degree that wasn’t yet visible, or comprehensible, to either Wall Street or Washington.

Hoover’s efforts to soften the blow rhetorically were not persuasive. In late 1929, Hoover made the unusual decision to not refer publicly to the crash as a “panic.” Instead, he started using the word “depression,” perhaps in hopes that it sounded less inflammatory. The term stuck.

In fact, there had been a few hopeful stretches in the stock market that made big-city people believe a sustained turnaround was imminent. From the shocking lows of October 1929, the Dow Jones Industrial Average had rallied steadily into March of the following year, regaining about 40 percent of the value lost in the crash. A few stocks, like General Electric, came close to their 1929 highs. This made perfect sense, as experienced traders knew that the best buying opportunities come at the most fearful periods, when blue chips can be acquired at a relative bargain. Buying low, the oldest strategy in the book, had made many a plunger enviably rich.

“I believe if the newspapers would quit talking about unemployment our troubles would be over in a couple of months,” Hoover told an interviewer. “Sentiment is more optimistic.”

But when the market turned downward again in April and May, a lot of those traders went broke. Though a summertime mini-rally raised everybody’s hopes one more time, it didn’t last. From there the market fell, unbroken and steep, all the way to the midterms, when, as voters went to the polls, the Dow stood a solid 20 percent below the 1929 nadir.

Hoover had always been distrustful of Wall Street. “You know, the only trouble with capitalism is capitalists; they’re too damned greedy,” he told one of his close friends.

But now he needed them. He needed the unmistakable rush of optimism that the bull market of the 1920s had so regularly provided. He needed investors to bet on the long-term prospects of economic growth and send positive signals to the country. Some did just that. But the momentum they mustered was never more than episodic. Every market rally eventually reversed course—some in hours, some in days, but they all ended the same way, swiftly giving back their gains as if in a cloud of smoke. Blame was heaped on short sellers, and, as always happens in the midst of market panics, policymakers started considering banning the practice. Salmon Levinson, a prominent Chicago lawyer, was among those who argued for a temporary halt to give the market a chance to find its legs.

“Why not a moratorium on short sales for, say, two weeks?” asked Levinson. “We could then determine whether these gamblers who play the stock market as a game are responsible for this terrible condition or not.”

Levinson, an outsider both on Wall Street and in Washington, had a compelling track record. In 1928 he had persuaded the most powerful nations on earth, including the United States, France, and Germany, to sign the Kellogg–Briand Pact, an international treaty renouncing war. Putting the lid on short sellers was, in a manner of speaking, another way of keeping the peace.

Hoover was torn about such interventions. He fervently believed that the government should stay out of the market, but he also had hyperactive impulses. He wanted to do things. In 1921, when he was commerce secretary in the Harding administration and the economy fell off a cliff, Hoover had sprung into action, inviting business leaders to the President’s Conference on Unemployment and creating the monthly Survey of Current Business to provide up-to-date economic data. Rarely had anyone given a second thought to what the commerce secretary did before he held the job.

What tangible effect, if any, these activities had on the economy was impossible to say with any certainty, but one thing was known: The recovery from that recession had been stunningly swift. And it made Hoover feel certain that the economy could and would recover quickly again.

After the 1929 crash, Hoover had no shortage of ideas. As unsettling as the panic of those four days in October had been, this was a crisis he fully expected and felt prepared to deal with. He moved quickly to contain the damage. He summoned major corporate leaders to Washington and extracted their pledges to keep wages steady and to refrain from cutting jobs. He lowered the income tax, slicing a point off the 25 percent top rate. He successfully persuaded Congress to double investments in public works projects, measures, he believed, that would stimulate the economy sufficiently to pull it through this slow patch. And he asked Congress for $160 million in tax cuts.

The problem was that the federal government lacked the resources to administer such nationwide programs. Washington’s budget represented just a few percentage points of GDP. Either the federal budget would have to be massively expanded, or revenue would have to be sought from other sources, such as philanthropies, and even local and state governments. Hoover chose the latter group, devoting an ungodly amount of time and energy through the winter and spring to badgering governors to loosen their purse strings. The process was slow and mostly ineffectual, as few mayors and governors had much excess cash to spare. They were struggling along with everyone else. In the meantime, Hoover kept talking up the economy even when there was little to suggest things were improving.

Heading into the midterms, Hoover had worked hard to keep his own spirits up, holding on to his faith that the endless abuse he was receiving in the press did not reflect the true feelings of the American people. But the results of November 5 revealed the indisputable truth: He had lost the country.

The toughest news of all came out of New York, the epicenter of the financial crisis, where he’d dispatched an army of officials—his secretary of state, his secretary of war, and his under secretary of the treasury—to try to help defeat Governor Franklin Delano Roosevelt, who was running for reelection, yet had his eye on higher office.

Almost immediately upon winning his first term in 1928, Roosevelt had emerged as the Democrats’ best shot at defeating Hoover in 1932. Hoover, however, thought very little of Roosevelt, so much so that he initially encouraged his presidential aspirations, believing he was easily beatable. In almost every respect, Roosevelt was the opposite of the president, a shape-shifter who, despite his patrician background, had developed the common touch. Getting out of the office and meeting the public, bantering and connecting with people from all walks of life—they were the parts of the job he most enjoyed. He also had an organization that knew how best to channel these talents.

Roosevelt’s political guru, Louis Howe, a small, strange man known to wear the same clothes for days at a time, had originally targeted 1936 for Roosevelt’s first run at the presidency. Even before the Republicans’ landslide victory in 1928, it was presumed that Hoover would serve two terms in the White House. It was widely assumed that he would be a successful president. But the dark days of October 1929 had sped up the Roosevelt timetable.

In December of 1929, with the panic still fresh in everybody’s mind, Governor Roosevelt had traveled to Chicago to deliver three addresses in a single day. The putative objective had been to launch the Democrats on their bid to take over Congress in the following year’s midterms. But the less-than-secret agenda was to showcase Roosevelt as a national candidate and put forth the alternative he offered to the Republicans’ hands-off approach to business.

With great rhetorical flourishes, Roosevelt took aim at the “apparently magic power” of financial engineering by which “any half-dozen of decrepit and moribund industries, by merely pooling their individual debts and inefficiencies, could attract the public’s money to any stock issue they chose to float because they were a ‘combination,’ a ‘merger,’ or a ‘holding company.’ ” The farmer, by contrast, “cannot be exploited or bonded or united into stock companies…If the farmer starves today, we all starve tomorrow.”

With Roosevelt up for reelection as governor in 1930, Hoover and the Republicans knew they needed to put a stop to his rise. Their strategy was to tie Roosevelt to the corruption of Tammany Hall, the venerable New York City patronage machine.

A more politically astute president would likely have grasped the existential difficulty of this task and traveled up to New York himself to campaign on behalf of Roosevelt’s formidable Republican challenger, Charles Tuttle. But Hoover preferred not to get his hands dirty. He watched from the White House as three of his administration’s best men abjectly failed in their mission. Roosevelt ignored the Tammany-focused attacks until the very end of the campaign, when he floridly dismissed them as a callow smear attempt. On Election Day, he coasted to an easy victory over Tuttle, with a margin of twenty-three points.

On December 10, 1930, Hoover and the White House got word that a crowd reported to be as large as twenty-five thousand had assembled outside a branch office of the Bank of United States at the corner of Southern Boulevard and Freeman Street in the Bronx.

Earlier in the day, a customer had gone to the branch seeking to sell his shares in the bank. The teller tried to talk him out of selling, contending the stock was a good investment. He left the bank and, in retelling the story, slightly adjusted his recollection of what had happened: He told some of his colleagues and friends that the bank had refused to let him sell the shares.

Within hours, a rumor had spread throughout the neighborhood that the Bank of United States was insolvent and that customers couldn’t access their cash.

The rumor spread so quickly that a full-blown panic ensued, with customers racing to the bank to get their money out. Police arrived on horseback to manage the crowd. One customer stood in line for hours to withdraw the two dollars he had in his savings account. As word continued to spread, customers massed at the bank’s other branches, too.

It couldn’t have come at a worse moment. A series of bank runs was threatening to become an epidemic. Bank failures had been averaging 60 per month through the early part of the year; by November the number jumped to 254, and 344 the next month. And it looked like this one was going to be the worst one of all.

The Bank of United States had been a striking success story. Founded in 1913, it had built its business on immigrant workers in the burgeoning garment industry. Its depositor base was the largest in the country, four hundred thousand strong, though most accounts were tiny. At its peak the bank’s share price reached $240; by December 10, 1930, the price was 11½ and falling fast. A month earlier, as a rash of bank closures spread across several states, a survey of banking commissioners by The New York Times turned up nothing but bland reassurances: “on a sound foundation…fundamentally sound…returning to normalcy…very nearly normal…no special cause for apprehension…in better condition at this time than any period for the last 10 years.” The public, however, was no longer so willing to accept the word of bankers—or the media.

On the evening of December 10, dozens of the most powerful men in banking rushed to a meeting in the Governors’ Room on the twelfth floor of the New York Federal Reserve building to try to rescue the bank, an all-too-familiar event. Charles Mitchell attended, as did Albert Wiggin of Chase. Thomas Lamont arrived late in the company of Owen Young. Many of them would remain there until three in the morning.

A merger between the Bank of United States and three other banks, in the works for months, had been called off just days before the panic struck. There were too many questions about the bank’s accounting, including some $200 million of loans it had made to fifty-seven subsidiaries. Questions about its solvency were hard to deflect.

As a pure business proposition, none of the bankers in the room cared to absorb Bank of United States. But they knew its failure posed a threat to all of them. They had to stop the run. They ultimately ponied up an estimated $50 million to rescue the bank. That was a lot of money to save one mid-level institution. But if $50 million saved the entire banking establishment, it was obviously a bargain. There was no guarantee, however, that even that sum would hold the line. Bank of United States was a shoddily run institution; these august gentlemen would never have entrusted it with their own money. Was it worth gambling their reputations on?

A compromise was reached whereby loans were made to cover half of the deposits in the hopes that this measure would allay fears. It didn’t. Lines kept forming outside branch offices. On December 20, after another branch in the Bronx shut its doors, five thousand spectators gathered outside the bank, some bearing placards reading “We want our money!” Six people were arrested. The Bank of United States failed.

On the one-year anniversary of the 1929 crash, Alexander D. Noyes, the financial editor of The New York Times, had cautiously noted that, unlike previous panics, the 1929 one “did not drag down with it a series of great banking and business houses” and that this fact “might be considered proof of underlying economic strength.”

The fact that the Bank of United States’s demise could not be prevented by the combined forces of Wall Street’s heavyweights was a frightening preview of the carnage to come. Across America, businessmen and bankers alike were all coming to the same conclusion—that the only prudent approach was to hunker down and conserve capital at all costs.

The hope that a new bull market was imminent had stayed alive until almost the end of 1930. But now it had vanished. On that much everyone agreed. A new era was upon them.

TWENTY-NINE

FEBRUARY 2, 1931

The first Monday of February in Washington was slightly warmer than usual—a balmy forty-seven degrees—when Charles Mitchell arrived in town. He had traveled to the Capitol for a hearing that he knew had the potential to be very awkward, and possibly much worse.

He was about to finally come face-to-face with his nemesis, Senator Carter Glass. The two men had never met before, though they had been reading about each other in the newspapers—and for the better part of two years, friends and colleagues had talked to them about the other almost incessantly.

With the events of 1929 still much on his mind, Glass had convened a Senate subcommittee to look into the country’s banking laws and examine the operations of the Federal Reserve. Mitchell was summoned to undergo questioning.

Mitchell was hoping—expecting, really—that Glass wasn’t going to use the hearings to publicly lambast him. The committee’s aides had “let it be understood that they were not embarking on a muckraking excursion,” according to The Baltimore Sun. “No ‘raids’ will be carried on against either bankers or market operators, but an effort will be made to find a remedy for some of the unfortunate conditions made possible by existing laws.”

Still, that did not stop the other reporters and spectators from wondering if Glass might turn Mitchell into his own piñata.

Would Glass rake the chairman of National City over the coals for the perilous state of the banking system? And how would Mitchell fight back?

Americans by then were understandably concerned about the safety of their savings, as they woke up virtually every morning to disturbing new headlines. On any given day, there were reports of smaller banks throwing themselves at the mercy of larger ones, suspending withdrawals or even shutting their doors altogether. Roughly a thousand banks had failed over the last year. Bank runs had become almost a contagion. On the same day in November that the largest bank in Louisville went down, forty-three banks in Arkansas failed, along with four in Missouri, two in Illinois, and two in Iowa. The vast majority were in small farming towns and were not all that vibrant in the best of times, but the effects were beginning to be felt everywhere.

By all measures, Mitchell’s National City had held up fairly well. Though it had lost the mantle of America’s biggest bank—Albert Wiggin’s Chase National Bank had taken the top slot when the National City–Corn Exchange deal fell apart—National City had posted annual profits of $144.5 million, down from 1929 but not disastrously so.

Mitchell had even started to sound a little more like his old sunshiny self. “A multitude of corrective influences are gradually restoring conditions to a return of prosperity,” he said in his annual address to shareholders. “At the moment there is little basis for a prophecy of speedy recovery, but judging by past experiences it would seem that the volume of business has fallen as low as it is likely to go.”

Even before his testimony in Washington, Mitchell had been making conciliatory gestures toward Glass, praising the Federal Reserve for having done its best to maintain the flow of credit into the economy. Mitchell knew Wall Street bankers—and he in particular—had fallen out of favor, and he found himself forced into gestures of humility, or at least the appearance of them, carefully trying to steer clear of the press.

As the hearing got underway on February 2, Glass cut right to the chase, pointedly asking Mitchell to explain what caused the ’29 crash. Mitchell suggested inflation in commodities, real estate, and stocks were to blame, contending that the easing of credit to help business also “added to the difficulties.” In his view, it was credit pouring in from outside the banking system into call loans that had fueled speculation and pushed stock prices to the breaking point.

If the Fed had just been willing to raise the rediscount rate, he maintained, the torrent of outside credit would have subsided.

In one sense, this was an obvious line of defense for a banker to make—after all, outside lenders were competition. But Glass was not buying it. “No, we did not take into account the shiftiness of bankers in doing indirectly from what they were prohibited from doing directly,” he said, though his tone was, surprisingly, less fiery than usual.

Glass’s view was that companies had issued stock for the purpose of raising funds to make loans right back into the stock market and that Wall Street was fully complicit in this circular flow of capital, happy to organize the offerings and collect ample fees and commissions along the way.

Mitchell, in an equally calm voice, said he was unaware of that actually happening and stuck to his position that raising the rates would have slowed the flow of these loans. Glass said he didn’t think it would’ve made a difference.

“Well, that’s what makes a horse race,” said Mitchell, flashing his congenial smile.

In terms of reforming the Federal Reserve, Mitchell had an idea for Glass. Companies should be barred from using their surplus funds to lend to speculators. “I’m not a lawyer,” Mitchell said, “but I should think that it might be possible to prohibit corporations from doing things which we have to pay to obtain the right to do.”

“You are right,” Glass responded, agreeing with his nemesis, “and I think there might be such a law.”

Mitchell had other ideas, too, to keep markets operating smoothly. The capital gains tax should be abolished, he said.

Mitchell also lobbied for less frequent scrutiny of securities businesses by government inspectors and argued that these corporations should not be compelled to publish their stock holdings.

The proper response to 1929, in other words, was not more government intrusion but less. The economy would recover faster if Washington got out of the way and let Wall Street take care of business.

As the hearing drew to a close, it was clear that Senator Glass was not going to turn the proceedings with Mitchell into a spectacle.

Mitchell, for his part, flattered Glass, complimenting him on the “broad, constructive nature” of his questions and remarking that nobody was better positioned to shape the future of the Federal Reserve than the man who “played such a prominent role in giving it birth.”

As much as Glass loved making headlines, he was biding his time: Glass had a larger agenda, a major piece of legislation that would address, once and for all, the role of banks in aiding and abetting speculation.

Back in New York, Mitchell retreated to his private study on the top floor of his Fifth Avenue mansion, decorated as if it were a ship, where a chronometer told the time and life preservers adorned the walls, an ironic sign of the perilous state of his station in life.

Across from his home, in Central Park, several homeless men, struck by the economic downturn, had set up a small shantytown, mirroring the Hoovervilles that were popping up across the nation, in an area where a reservoir had been drained. They had been evicted by the police, but, night after night, new men would find their way to the park to sleep.

The homeless problem in New York, which was now getting closer to the homes of the city’s elite, was the newest feature of the stock market’s collapse.

For Mitchell, the question that remained was personal: How much power did he still have to steer the course of American business? Syndicated business columnist Bertie Charles Forbes decided to give Mitchell a public pep talk, singing his praises in the aftermath of his testimony. “The thing I admire most about Mitchell is his invincible never-say-die courage,” he wrote. “I saw him almost daily during the fight of the 1929 financial hurricane, and his manly determination, his unconquerable resolution, his ceaseless battle against the raging thunderstorms, were magnificent.”

Forbes approvingly quoted Mitchell’s theory of how to live well. “A man can get a temporary thrill from making money but if all he has to show for his life’s work is a financial balance he cannot derive a great deal of satisfaction. A man must be able to say ‘My work has been of such a character that I have benefited my fellowmen.’ Unless he can do that, his satisfaction, his happiness, is bound to be ephemeral.”

As it had done in 1930, the stock market began 1931 with a sharp run-up in prices, the Dow continuing its momentum from the lows of December 1930. By March, it had gained almost 25 percent. Hope refused to die.

Hoover felt he had done what he could. He had cut the income tax. He had announced a slate of public works. Just prior to the midterm elections in 1930, he had banned new immigrants from arriving in the United States unless they had jobs in hand, which virtually none did. It was a purely symbolic gesture, a play for voter sentiment, since Congress had passed an immigration act six years earlier that had essentially slammed the door on most immigration.

Hoover was exasperated that the crash and its aftermath were consuming his presidency. “In this emergency, it is just one fixing job after another,” he complained. “There is an international crack to fill up, then an industrial leak and then an agricultural flood. I am just a repairman. I don’t have any time to do anything new.”

At almost every press conference, Hoover delivered some version of the same message: The main problem was psychological. Things were better than people thought. Recovery was imminent. At one point, he tried to explain that the surging unemployment rate, which reached 16 percent in the fall of 1930, up from 3 percent before the crash, was deceptive.

“There are always a million unemployed or thereabouts of general estimates of people shifting from one job to another,” the president said, unconvincingly. “The people who had employment in July, about a million of them, or some portion of them, not a million, go out in August and come back in September. So that when you talk about three and a half million unemployment you are not talking about people without some income, interrupted income. And furthermore, the census will show you that there are an average of about one and three quarters breadwinners per family in the United States. So that when you talk about three and a half million, or reduce it to two and a half million of people who are continuously out of employment, you are not talking about two and a half million families; you are talking about a lesser number of families without breadwinners.”

Eventually, Hoover settled on the position that outside remedies would only make the financial situation worse. “Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body—the producers and consumers themselves,” he said. Yes, the 1929 crash had revealed serious flaws, but the fixes for those flaws lay within the market itself. The uptick in production numbers in the fall of 1930, followed by the revived stock market, served to validate the laissez-faire approach. After the dreadful Bank of United States spectacle, the banking system appeared to be holding steady…at least for now.

A new problem emerged in the spring of 1931 just when things seemed to be improving: Germany was broke and threatening to default on its debt.

Europe had once been a kind of safety net for the United States. When stocks in America sank, buyers from across the pond had been happy to step in and scoop them up, keeping the market from collapsing entirely. But the mutual benefits of trade, disrupted by the crash, as well as by the Smoot–Hawley tariffs, were devilishly hard to reengineer. Europe was in danger of becoming a deadweight on America’s prospects.

“This is a cruel world,” Hoover, his facial muscles twitching, told a staffer in the White House.

The deal over German reparations that had drawn so much praise for Lamont and the other business luminaries when they negotiated it in the summer of 1929 had left the big New York banks on the hook for Germany’s solvency; less than two years later, short-term loans exceeded $2 billion. In Germany, unemployment soared to 33 percent. In May, after a failed effort to rescue Germany by the Bank of England and others, Austria’s largest bank went bust, igniting a contagion that quickly spread to its neighbors. All eyes were on Germany. If the country defaulted, the crisis would come full bore to lower Manhattan—and to the rest of America.

Meanwhile, Wall Street kept pressing for debt relief for Germany, where more than a decade of runaway inflation and political violence had turned ordinary life upside down.

“We have Germans now growing up who were not born at the time of the war. They see they are under this heavy yoke for which they were not responsible,” Mitchell later said, warning of “a rebellion against the debt.”

Only the United States, as the chief creditor nation, was in a position to act. Lamont called Hoover at the White House on June 5 at 2:30 p.m. and applied his legendary powers of persuasion.

“Mr. President,” he said, “I am taking the liberty of calling you up to make a suggestion that you will more than likely throw out the window. Nevertheless, my associates and I consider it of such importance that we have no right not to make it to you. It is, in effect, that you should take the initiative in proposing that there should be a holiday of international governmental debt payments.”

The idea filled Hoover with dread. For millions of Americans the experience of the Great War was still too close. As Hoover well knew, they were not ready to forgive their former enemy. “Politically it is quite impossible,” the president told Lamont. “You have no idea what the sentiment of the country at large is on these intergovernmental debts.”

Lamont tried framing the issue in the starkest political terms, coming as close as a proper gentleman could to implying that Germany’s debt posed a threat to Hoover’s renomination for president. “These days,” he said, “you hear a lot of people whispering about sidetracking the Administration in the 1932 Convention. If you were to come out with such a plan as this, these whisperings would be silenced overnight.”

And lest the president worry that Wall Street would claim this victory as its own, Lamont added a final assurance: “One last thing, Mr. President, if anything by any chance ever comes out of this suggestion we should wish to be forgotten in the matter. This is your plan and nobody else’s.”

Privately, Hoover had been obsessively studying a debt-repayment moratorium, working out on his own the best way to handle it. This had always been his preferred mode of working. On the matters he considered most sensitive, he kept outside counsel to a minimum. As the debt plan began to take shape in his mind, he took an aide into his confidence. “This is the most daring statement I have ever contemplated issuing,” he said.

After weeks of agonizing indecision and a direct plea for assistance from Germany’s president, Hoover tested the plan with thirty members of Congress, then called a press conference for Saturday, June 20, where he laid it out for the press corps: “The American government,” he read carefully, “proposes the postponement during one year of all payments on intergovernmental debts, reparations, and relief debts.”

It was, at long last, the bold, assertive act that many had been pining for from Hoover. “The impression he is creating is that of a changed man,” reported The New York Times, “a steam engine of energy determined to make a fast run to the destination for which he is heading.”

Hoover had many more fires to put out, including within his own administration. When he presented the debt-moratorium plan to Mellon, his treasury secretary offered his “unqualified disapproval,” then left for England to attend his son Paul’s graduation from Cambridge. While overseas, Mellon was tasked with selling the plan to the British and the French, which he did with unconcealed irritation and reluctance. He simply could not stand being told what to do, not even by the president of the United States.

Whatever help to the markets Hoover provided by aiding Germany was short-lived. By the time Mellon returned to the United States at the end of the summer, the venerable Bank of Pittsburgh was on the verge of failure. It was the only bank of any significance in the treasury secretary’s hometown that was outside the Mellon family’s control. The Depression had caused a steep drop-off in steel production, which had decimated the local economy. Some $3 million was needed to keep the bank from going under. Mellon was asked to provide $1 million. To him, it was a pure business deal, nothing more. In exchange, he demanded majority ownership, at which point the other backers pulled out, the rescue package fell apart, and the bank collapsed.

From April to August, a shocking number of banks—563 of them—failed. And on September 21, 1931, the United Kingdom gave up the gold standard, meaning that the value of the pound was no longer tied to Britain’s gold reserves, sending markets into turmoil all over again. By the end of the month, the Dow had dropped 37 percent, its worst ever monthly performance.

“Conditions could not be much worse than they are today either as regards business, finance or politics,” Hoover’s aide wrote in his private diary. “There is no sign of improvement in any particular. Bankers are most apprehensive…Business is most apprehensive. Wall Street is more gloomy than at any time since the depression started almost two years ago.”

By October 4, Hoover had had enough. He knew he needed to do something more. He decided to call a secret meeting of the country’s top forty bankers and insurance executives. Rather than hold the meeting at the White House, he chose to meet them at Mellon’s apartment near Dupont Circle. He feared that if the meeting became known to the public, it could cause further panic.

That evening, the nation’s top financial executives arrived at the McCormick Apartments, a Beaux Arts building on Massachusetts Avenue where Mellon had bought the top floor in 1922. They had traveled to Washington from New York’s Penn Station earlier that day in two private rail cars.

The men piled into Mellon’s living room, milling about between the reception foyer and the salon, just off a hallway that led to the apartment’s six bedrooms and another that led to five maids’ rooms.

Using stark language, Hoover told the assembled group that the economy—and the banking system—was in jeopardy. He had a demand to make: The men, he told them, needed to pony up $500 million in emergency credit to shore up struggling banks. He also asked them to suspend “mortgage foreclosures on the homes and farms of responsible people.”

The bankers, preoccupied with their own struggles to stay afloat, were not enthusiastic about being asked to save weaker institutions.

“We had a long and sometimes not too pleasant discussion in which some of them in courteous terms gave me some unnecessary elementary instruction in the principles of banking and insurance,” Hoover later wrote, describing himself as being “more depressed than ever before.”

Hoover made it clear: This was their last best chance. If they didn’t address the crisis now, reform of the banking system would be turned over to Congress, and that might spell the end of capitalism as they knew it.

“God help you when they get through with you,” Hoover said.

On the evening of December 13, Winston Churchill was back in New York, still nursing his losses from the stock market collapse in 1929. His trading account had a $75,000 hole in it.

Churchill, who had become increasingly isolated from his Conservative Party in Britain, loved visiting the United States, not only because he had a lot of rich friends who treated him like royalty and introduced him to celebrities but because there was no better place for him to raise sorely needed personal funds with speaking engagements. He was scheduled to give one in Brooklyn the next day.

That night, Churchill headed to Bernard Baruch’s house on Fifth Avenue for a nightcap after having dinner with a friend. Churchill was always interested in a drink and the top-drawer hospitality he knew to expect from Baruch, and there were urgent matters to discuss besides. Baruch, who’d suffered sizable losses of his own in the crash, was growing deeply pessimistic about the Federal Reserve’s ability to manage the currency. Baruch’s biggest stock holding was an Alaskan gold-mining concern, and he was making plans to amass his own supply of gold bullion—a hedge against the entire U.S. monetary system—something of course few private citizens could afford to do.

Churchill made his way outside the Waldorf Astoria where he was staying and hailed a taxi. But he quickly realized he didn’t bring Baruch’s address with him. No matter. He had been to Baruch’s home many times. He was sure he could find it. He was pretty sure it was in the 1100s but maybe it was in the 1200s?

“When I got near the eleven hundreds I peered out of the cab window and scanned the houses as we sped past,” he recounted, “but could not see any like the one I was seeking.”

They had overshot. So he asked the driver to circle back around. “It occurred to me that as we must be within a hundred houses of Mr. Baruch’s address, and that as he was so prominent a citizen, any of the porters of the big apartment houses would know which his house was,” Churchill said, explaining that he went and knocked on a random door, but the porter who opened it “had no idea where Mr. Baruch lived.”

What was supposed to be a ten-minute drive had turned into an hour. It was now 10:30 p.m. Churchill was about to give up but he thought he spotted the house and had the cab stop. He began crossing the thoroughfare, noticing the car headlights from the left but feeling confident that he could make it to the other side in plenty of time.

“Suddenly upon my right I was aware of something utterly unexpected and boding mortal peril. I turned my head sharply. Right upon me, scarcely its own length away, was what seemed a long dark car rushing forward at full speed. There was one moment—I cannot measure it in time—of a world aglare, of a man aghast. I certainly thought quickly enough to achieve the idea, ‘I am going to be run down and probably killed.’ ”

The impact was sudden and violent. The vehicle struck Churchill with force, throwing him to the ground.

“I felt it on my forehead and across the thighs,” he later wrote. “But besides the blow there was an impact, a shock, a concussion indescribably violent.”

The police soon arrived and several men helped place Churchill in the back of a taxi to get to the hospital, which seemed faster than waiting for an ambulance. “I now saw, as I lay on the floor of the cab, both my hands, very white and covered with blood, lying across my breast,” he said. “And then a most blessed thing happened. I began to experience violent pins and needles in both my upper arms. They hurt intensely; but I did not mind, because at the same time I found my fingers beginning to move in accordance with my will.”

At the hospital, Churchill was placed in a wheelchair. “Are you prepared to pay for a private room and doctor?” he was asked. Whatever worries he had about his precarious financial position disappeared. “Yes, bring all the best you have,” he demanded.

Soon he was in the operating room. “White glaring lights. The mask of a nitrous-oxide inhaler. Whenever I have taken gas or chloroform I always follow this rule. I imagine myself sitting on a chair with my back to a lovely swimming bath into which I am to be tilted, and throw myself backwards; or, again, as if one were throwing one’s self back after a tiring day into a vast armchair.”

When he came to, Bernard Baruch was sitting, waiting for him, along with Baruch’s wife. “Tell me, Baruch,” Churchill asked, “what is the number of your house?”

“1055.”

“How near was I to it when I was smashed up?”

“Not within ten blocks,” Baruch replied with a smirk.

Whatever cheer Baruch’s comment generated was short-lived. Churchill’s cheerfulness turned into depression.

“Last night he was very sad,” Churchill’s wife, Clementine, told a friend later about his ordeal. “He had now in the last two years had three heavy blows. First the loss of all that money in the crash, then the loss of his political position in the Conservative Party, and now this terrible physical injury.”

Churchill, who had survived the market crash with an unbowed sense of optimism about the American experiment, was, like so many others, now a casualty of its aftermath.

THIRTY

FEBRUARY 18, 1932

“Fighting this depression is becoming more and more like fighting a war,” Hoover told his aide that February. “And the need of generals is as great today as in any war we ever had. I’ve got some good ones and some are mighty poor…There’s only one thing to do and I must do it cold bloodedly. When a general fails, I must replace him. These are too serious times to get along with second rate men.”

In early February, Hoover decided he needed to artfully extricate himself from Treasury Secretary Andrew Mellon. Few men in American public life had suffered as stunning a drop in popular standing as Mellon, who had once been hailed as the architect of the 1920s boom. By 1932, stock prices had collapsed by more than 80 percent from their 1929 peak. Panicked depositors, desperate for cash, continued to descend on banks in waves, especially in the country’s heartland, taking down one after another. Almost 11,000 banks had closed permanently. Nearly thirteen million Americans were without jobs. The unemployment rate was 23.6 percent. People were living in tin shacks and standing in breadlines, while drifters traveled the rails looking for work or handouts.

Mellon and, in turn, Hoover, were being blamed. Mellon’s reappointment had been virtually forced upon Hoover as a condition of mollifying the business community, and it used to be observed, only partially in jest, that in his eleven years atop Treasury, three presidents had served under him. But since the crash, the seventy-six-year-old Mellon had become, as Hoover’s own press aide, Theodore Joslin, described in his diary, “little more than a dead weight.” Mellon had turned into a liability.

That was due, in large part, to the exertions of Congressman Wright Patman, a feisty, populist Democrat from East Texas, who had arrived in Washington in 1929 with Mellon firmly in his sights. To Patman, Mellon was a blatantly corrupt figure who lied and conspired to put his own business interests ahead of the country’s, on matters stretching from his personal taxes to banking policy and trade barriers. Patman had a ready supply of colorful quips on the subject of the treasury secretary. With “Capone out of the way,” he liked to say, “it would be a good idea to go after Andrew Mellon.”

In January, Patman had moved to impeach Mellon on the grounds that he had continued to manage his vast business empire while in office. In a week of hearings before the Senate Judiciary Committee, Patman presented an overwhelming case against Mellon, putting even his staunchest Republican allies on their back foot. Mellon did not go down easily. It was said that Mellon secretly arranged for federal agents to tap Patman’s phone and search his office. But Patman kept up the attack, ridiculing his detractors as “Mellonites, poll parrots and ‘yes’ men.”

Mellon had become a problem that Hoover couldn’t afford, especially as he was trying to get the nation to support his most recent idea: the creation of the Reconstruction Finance Corporation, which was the administration’s belated effort to provide debt relief to companies and halt the outbreak of bankruptcies. With Hoover heading into his reelection year and desperate to make a fresh start, the last thing he needed was a headline-grabbing impeachment proceeding against his treasury secretary.

Besides, Mellon hated the idea of the Reconstruction Finance Corporation, firmly believing the economy and the market needed to sort itself out without government intervention. Hoover had once thought that, too, but the country was in such dire straits that he had come to the view that he had no choice: He couldn’t just let the economy flail on its own. Unfortunately for Hoover, Congress was in agreement with Mellon—it was “shocked at the revelation that our government for the first time in peacetime history might have to intervene to support private enterprise,” Hoover later recounted.

Hoover tapped Charles Dawes, the ambassador to Great Britain, to head the Reconstruction Finance Corporation, which opened up a prestigious landing spot for Mellon to replace him in London. The president thus had a convenient way to save Mellon a little face and stash the arrogant old man out of harm’s way. In appointing Mellon to the new post, Hoover called him “one of our wisest and most experienced public servants” and promptly shipped him overseas to the Court of St. James’s for his swan song.

Mellon’s fall from favor, however, was just one of many fires threatening to engulf the Hoover administration.

On the morning of February 10, Carter Glass and the rest of the Senate leadership were summoned to the White House for breakfast with the president. Glass didn’t think much of Hoover, describing the president to a friend as “densely ignorant, pitifully ignorant on banking questions.” Then again, Hoover’s White House didn’t think much of Glass, either, especially his reputation as a “great authority on banking.” “My personal observation leads me to believe there is no ground for any such belief,” Ogden L. Mills, who replaced Mellon as Hoover’s new treasury secretary, would confide to a friend.

Once everyone was seated, Hoover warned them that the United States would have to abandon the gold standard if immediate action to bolster the banking system was not forthcoming. However much it might alarm the country, which took great comfort in knowing its money was backed by gold, it was the only way to prevent a “run” on the United States’ reserves of the precious metal. He knew Senate leaders would find the idea anathema but also hoped it would focus them to seek a solution to the country’s dire economic problems.

Although he prided himself on short, efficient meetings, on this occasion Hoover kept the group hostage while he drove home his main point: The elected officials needed to quickly find a way to bolster the banking system. Glass got the message, as did Representative Henry B. Steagall of Alabama.

The two Southerners promptly co-sponsored the first of two bills that bore their names. The Glass–Steagall Act of 1932, hastily passed by Congress and signed into law by Hoover on February 27, not even three weeks later, effectively loosened the purse strings of the Federal Reserve, empowering it to lend more freely to the type of small, marginally capitalized banks that were failing across America.

Glass had other ideas, but they weren’t fully developed just yet. One of his biggest ideas was to break up the commercial lending side of banks from the investment banking side—the part of the bank that dealt with the stock market and underwritings and mergers. That way the stock traders and speculators wouldn’t endanger the bank accounts of ordinary Americans who kept their money in commercial banks. But Glass was not ready to fight that battle. First he had to deal with the co-sponsor of the current bill.

Steagall’s big idea was to have the government guarantee bank deposits, which he believed was the only way that customers would have confidence in banks. Unless the government stepped in and ensured that bank deposits would be safe, he believed, the string of bank runs would continue unabated.

Glass was strongly against such a provision. “I am unalterably opposed to what is ordinarily known as government guarantee,” he wrote in a letter. Hoover, who considered it anti-Republican, was staunchly opposed as well, believing that the government shouldn’t be so enmeshed in private enterprise.

Some saw this as yet another case of Hoover misreading, or even outright ignoring, the national mood.

But Steagall thought Hoover would eventually see the light. “You know, this fellow Hoover is going to wake up one day and come in here with a message recommending guarantee of bank deposits,” Steagall told House Speaker John Nance Garner, “and as sure as he does, he’ll be reelected.”

At the urging of Hoover, Glass had supported the creation of the Reconstruction Finance Corporation, but that was as far as he—or the Democrats—would go.

Essentially, Hoover was on his own, no matter how much he pleaded with the Democrats to help him right the economy.

“You have no idea how I had to demean myself before these Democratic swine!” he told a friend.

Ever since the crash, Hoover had become increasingly convinced that short sellers were sabotaging not only the market but his presidency. He believed that powerful and wealthy Democrats like John Raskob and Bernard Baruch were organizing pools of money to short the stock market and depress the economy expressly to derail his reelection.

Hoover ordered the New York Stock Exchange to “take adequate measures to protect investors from artificial depression of the price of securities for speculative profit.”

Richard Whitney, head of the Exchange, dismissed Hoover’s concerns: “I would like to ask what proof there is—not blind prejudice, not vague assertions, but actual proof and evidence—that bear raiding has taken place in the stock market,” Whitney said. He warned that any attempt to rein in short selling would backfire, even leading to the “very destruction of the market.”

Hoover saw this as outright defiance from Whitney and his Wall Street associates. He told Whitney to take action, or he would ask Congress to hold hearings “with a view to Federal Control legislation.” Once again, Whitney brushed him off.

Hoover reached out to Senator Frederic Walcott of Connecticut, a Republican on the Senate Banking and Currency Committee and a fishing buddy of his. A former investment banker and defender of the prerogatives of wealth, Walcott had been dubbed as one of Hoover’s henchmen who “gratefully does all the little chores which the President cannot get the Republican leaders to do, and [who] unquestioningly carries out under-cover legislation schemes for the President,” as Drew Pearson and Robert Allen put in their syndicated column Washington Merry-Go-Round.

Despite growing anti–Wall Street sentiment around the country, an outright ban on short selling remained a legislative long shot.

So Hoover came up with a different idea: Expose the short sellers to public scrutiny. After a meeting with the president, Walcott told reporters that the Senate would hold hearings. “We are going to let the country know just who these big professional raiders [are] who have been deliberately taking the bloom off of every constructive enterprise for the last year,” he declared.

The chairman of the Senate Committee on Banking and Currency was Peter Norbeck of South Dakota, a self-described “Prairie Statesman” whose major accomplishment in Congress was getting the funding for Mount Rushmore in 1927. Norbeck agreed to lead a probe into Wall Street, knowing full well that he would lose his prestigious post if Roosevelt came to power and the Democrats took the Senate. He and his Republican allies on the committee saw the hearings as an opportunity to immunize themselves against attacks from Democratic challengers for presiding over the crash and the Depression.

“We are going into this stock market from top to bottom,” said one Republican senator. “We aren’t going to stop with the bears. We are going to find out about the bulls, too.”

That was not the way respectable pro-business Republicans were supposed to talk.

On Monday, April 11, 1932, C. R. Branch, a Republican lawyer who had worked in the Hoover Justice Department, was temporarily assigned as special counsel to the banking committee and had the bad luck to draw Richard Whitney as his first witness. In a room jammed with spectators, Whitney, polished and at times pompous, schooled Branch and the members of the committee on the mechanisms of the market, denying that bear raids even existed and insisting that the Exchange “was doing its utmost as a body of men to prevent illegal practices.”

After two days of Branch’s bumbling questioning, the Senate committee looked like inept amateurs. Michael Meehan and Jesse Livermore testified but made little impact. John Raskob firmly rejected accusations that he’d bet against General Motors shares as part of a scheme to weaken the economy.

“It has been charged in letters going around the country that as chairman of the Democratic Committee I have taken a bear position and have been trying to depress the market,” Raskob said. “That is not true. We went ahead and built the Empire State Building during the panic. Personally I do not care, but I do not want the public to think that I, as chairman of the Democratic Party, have resorted to such tactics.”

Charles Mitchell, who had already appeared before Congress several times since the crash and handled all challenges with aplomb, was called before the committee in May 1932 to discuss National City’s alleged participation in the Anaconda Copper pool.

In late 1929 the bank had offered the stock to its customers at $125 a share; by the time of Mitchell’s testimony, it had fallen to $5.

“You don’t hold us responsible for that?” he snapped when this was pointed out to him. “We are not talking now of stock manipulation in a fly-by-night concern.” He reminded the committee that Anaconda had been a client of the firm since 1895.

Denying all knowledge of a pool to manipulate prices, Mitchell spent the remainder of his time sidestepping questions and, ever the salesman, waxing eloquent over Anaconda’s future prospects.

From the perspective of lawmakers trying to focus the public’s anger on Wall Street, the whole affair was going very poorly. Senator Glass, ranking member of a different committee, the Senate Finance Committee, complained that the hearing was a worthless spectacle that served only to divert attention from the banking reform legislation his committee was working on. It wasn’t even creating much public outrage; revelations about how Michael Meehan had manipulated the price of RCA stock caused newspaper headlines, but not much in the way of a sustained outcry.

When Norbeck and other members left Washington to attend to their respective reelection campaigns, the banking committee put a hold on its investigation into Wall Street with virtually nothing to show for its efforts.

If Hoover could hold back the challenge of Franklin Delano Roosevelt, the investigation of Wall Street looked like it might end there. Digging into trading improprieties was, after all, hardly the sort of thing Republicans usually did. It had been ginned up as a political gambit—a defense mechanism—by a beleaguered party. And everybody knew it.

When the Republicans met for their convention in Chicago in June, Hoover was renominated without opposition. He collected 98 percent of the vote, more than Coolidge received in 1924. His advisors urged him to come out against Prohibition and take that popular issue back from the Democrats, but Hoover refused on principle and the party didn’t push him. The Republicans were going to sink or swim with the incumbent.

Roosevelt did not gain the Democratic nomination until the fourth ballot. Hoover liked his chances. Behind the scenes, Hoover was so confident he could beat Roosevelt that he successfully worked to scuttle the possibility of a rival candidacy to Roosevelt by Owen Young, who was being pushed by John Raskob and Bernard Baruch. Roosevelt, in Hoover’s view, was a political long shot who was physically incapable of handling the demands of the presidency. “He is a sick man,” Hoover said, referring to Roosevelt’s polio, which had afflicted him in 1921, when he was thirty-nine. “He wouldn’t live a year in the White House.”

THIRTY-ONE

NOVEMBER 8, 1932

The Hoovers spent election night, November 8, 1932, with some friends at their home on the Stanford University campus in Palo Alto as the results rolled in. The house, built during 1919 and 1920 in a Pueblo Mission style into the side of San Juan Hill, was where they had also spent election night in 1928. The results had been far better then.

The outcome of the 1932 election was hardly a surprise. Three weeks before Election Day, a polling firm called Houser Associates undertook what may have been the first scientific national election poll for either party. Face-to-face interviews with a random sample of more than five thousand American voters were conducted in and around fourteen metropolitan areas. When the survey report was delivered to Hoover by Lewis Strauss, Hoover’s friend and the vice treasurer of the Republican National Committee, he learned that he was essentially done as president. He also learned that his handling of the economy was not the main reason for his defeat. In fact, most of the poll respondents believed, as he had been insisting, that the Depression was over. More than two thirds agreed with the statement “business in general is picking up.”

The issue that had in fact decided the race between Hoover and Roosevelt, according to the poll, was Prohibition. Eighty-three percent of Americans supported its repeal. As the voting tallies came in, they confirmed the poll’s findings. By the time the voting was over, Democrats in the House of Representatives had won an overwhelming advantage: 313 to 117. And they had taken control of the Senate for the first time since 1916, increasing their numbers from 47 to 59. Nobody was going to be able to stop the Democrats from enacting their economic agenda—no matter what it turned out to be.

The president absorbed the painful truth that while he had accomplished a truly difficult task—turning the tide of pessimism that had washed over the country for three long years—he had forfeited the race over what would have been the easiest policy switch in American history. “I had little hope of reelection in 1932 but it was incumbent on me to fight it out to the end,” he later reflected. The final tally was 57 percent for Roosevelt and 40 percent for Hoover.

Still, Hoover rallied quickly, as was his nature. He was not an introspective man, and this was no time to wrestle with demons or nurse grudges while there was still a job to do. Knowing that he still had four months on the job, he made an appeal to the incoming Roosevelt administration. “We must have continued unity in constructive action all along the economic front,” he said. “I shall work for unity during the remaining four months of this administration.”

He was convinced that Roosevelt didn’t understand how serious the country’s economic problems were. Only months earlier, in the summer of 1932, Hoover had sincerely believed that a corner had been turned—not just in America but in the world. “Forces of recovery triumphed over forces of destruction,” as his administration put it. From the middle of the summer to the end of the year, the American banking system had actually quieted down. There were no big runs, nor newsreels of desperate customers lined up for blocks and blocks. From June to August, the Dow Jones had increased by nearly 40 percent. After peaking in September that year, it declined through the election.

By the fall, while the economy in Europe appeared to be improving (aside from Germany), a mood of apprehension had taken hold in the United States. Investors were incredibly skittish. Was there any safe asset? Should they dump dollars and buy gold? Or sterling or francs or any other currency? Was it the election itself that was unnerving people? It was hard to say.

Throughout the presidential campaign Hoover and the Republicans had tried to arouse public skepticism about Roosevelt’s economic policies. They charged that the Democrats were going to devalue the currency and purposely bring on inflation as a way to raise commodity prices for America’s beleaguered producers. Would the United States leave the gold standard? And if it did, what would the consequences be? Roosevelt was toying with these ideas but said as little as possible about it for fear of causing violent swings in the market. He was keeping his options open, making sure he could not be held responsible for anything that happened before he took office.

In the lead-up to the election, the Democrats had played hardball. They wanted all the bad news out in the open and laid at the feet of the Republicans. House Speaker John Nance Garner, a Democrat from Texas, demanded that Hoover’s Reconstruction Finance Corporation identify the banks to which it had issued emergency loans over the previous year. The recipients of the loans had purposely been kept secret to avoid bank runs. “If the truth scares people,” said Garner, “let it come.”

After Garner’s resolution passed the House, the public learned that the $674 million in loans had not been spread judiciously throughout the country, as the Hoover administration had maintained, but had benefited many of the nation’s biggest banks and their favorite clients. Names of beneficiaries started to leak out, including the Van Sweringen brothers of Cleveland, whose debt-ridden empire had been financed at the height of the boom by the House of Morgan. Hoover fought to have the Garner resolution rescinded, hoping to put a lid on further leaks, eventually succeeding a couple of weeks later. By that point, however, the damage was done.

A newly anxious public started hoarding cash again, pulling $64 million from their bank accounts. Roosevelt kept promising the gold standard would be “unflinchingly maintained,” but something had to give. Rumors flew; people leaped to conclusions. When some $38 million in gold left the United States for Europe, a sharp and very troubling reversal of prevailing trends, the sense of doubt and uncertainty intensified. How would America preserve the massive economic advantage it had built up over Europe since the Great War? Few were willing to put their faith in a smooth transition from Hoover’s policies to Roosevelt’s, and by their actions, they were turning their worries into reality.

An outgoing president typically does as little as possible in the months between losing an election and handing over the keys to the White House, but that was never going to be an option for Hoover—partly because he wasn’t that kind of person but also because the country was still in terrible trouble. There was still a full-blown depression taking place.

In this environment, Hoover’s allies were in no mood to play fair. Embittered Republicans returned to Washington from the campaign trail determined to settle scores and do as much damage to the incoming administration as they could in the four months before it took office.

Norbeck, who had won reelection with a relatively comfortable nine-point margin, would remain chairman of the Senate Banking and Currency Committee until Roosevelt took office and the Democrats took control of the Senate. Though his committee hadn’t held a hearing about Wall Street’s role in the crash in a year, its investigation had never been formally closed. With the short time he had left, he intended to restart the hearings and see if he could deliver a Democratic scalp or two, maybe dig up some fresh dirt on Raskob, for instance.

To get the ball rolling, Norbeck needed to find a lawyer to handle the questioning of witnesses, someone who’d be willing to do so for the pittance of $255 a month, which is all his budget allowed. Samuel Untermyer, the legendary cross-examiner who had gone toe to toe with J. Pierpont Morgan at the Pujo hearings in 1912, was the obvious choice, but the seventy-four-year-old was unwilling to take such a risk at this point in his career, certainly not for so little money. Several other prominent attorneys also declined, probably all sensing the futility of the effort.

Time was running out, but Norbeck refused to give up. “People have no faith in the Government,” he wrote, “and no faith in industrial leaders or bankers, in economists, statisticians, or even in themselves…It seems that all misdeeds and grievances are coming to the surface during this time of depression.”

With only six weeks left in the congressional session, Norbeck was given the name of Ferdinand Pecora, a scrappy, little-known prosecutor from New York City. Born in Sicily, Pecora had come to the United States with his family at the age of four. After attending St. Stephen’s College for a year on scholarship, he quit to help his father care for his six younger siblings. He later returned to the City College of New York, after which, working in a law office, he paid his way through New York Law School and was admitted to the bar in 1911. He found his calling at the New York District Attorney’s office, where he doggedly investigated police corruption, ballot frauds, and other municipal scams, achieving an impressive 80 percent conviction rate. He had worked with Untermyer to tighten New York’s securities regulation and shut down bucket shops, so he had some familiarity with financial matters, as well as a thirst for the limelight. He had recently lost a bid for District Attorney of New York.

That Pecora was even up for the job indicated a certain desperation on Norbeck’s part. Proudly Nordic, Norbeck was an unabashed believer in eugenics, widely popular among white elites, and he had been a vociferous supporter of the National Origins Act, the 1924 law that sharply curtailed immigration from eastern and southern Europe: Poles, Italians, Eastern European Jews, and so on. On the floor of the Senate, Norbeck had contended that it was foolish to limit Scandinavian immigration while welcoming “agents of Mussolini” and “friends of Capone”—namely, Italians—into the United States.

At this point, however, Norbeck didn’t have time to submit job candidates to an ethnic purity test. On Sunday, January 22, he called Pecora to offer him the job of chief counsel to the committee. Though he had no idea the hearings had never officially ended, an indication of how little impact they had made, the fifty-one-year-old Pecora, who still harbored dreams of political office, jumped at the opportunity. If he could deliver headlines that grabbed the public’s attention, this would be his ticket to the big time.

Shortly after arriving in Washington, Pecora noticed a brief news item about Charles Mitchell’s imminent departure for Europe. The chairman of National City Bank had been “invited by Mussolini to come to Rome to give advice about the stabilization of the lire.”

Although he had remained under assault by the likes of Carter Glass, Mitchell had largely maintained his sunny and spotless public reputation. Pecora was convinced that the banker had plenty to hide. The prosecutor had learned enough about the banking industry to know that drilling into the shady details of how it funneled client money through affiliates and subsidiaries would yield newsworthy copy, if not indictments. He focused on Mitchell, as he later put it, because “National City was one of the very largest banks in the world, and had but recently been surpassed in this country by the Chase National. The prestige and reputation of these institutions were enormous. They stood, in the mind of the financially unsophisticated public, for safety, strength, prudence and high-mindedness, and they were supposed to be captained by men of unimpeachable integrity, possessing almost mythical business genius and foresight.” Pecora believed that if he could make an example of the great Mitchell, he’d get the coverage he wanted—and send a message to all the major Wall Street figures that they were not immune from scrutiny.

At Pecora’s insistence, Norbeck announced that the committee would call Mitchell to testify on February 21. “When the stock market boom went wild,” Norbeck said in making the announcement, “the Federal Reserve Bank in Washington made an effort to slow it down, and sought the cooperation of Mr. Mitchell, who was then director in the Federal Reserve Bank of New York. He defied the board and speeded up the boom. He took a ‘go-to-hell’ attitude toward the board and got away with it.”

Norbeck’s statement opened the floodgates of pent-up misery. Pecora began receiving hundreds of heartbreaking letters from people recounting how their lives had been devastated by the tactics and promises of National City’s sales force. When one woman wrote to Mitchell to complain that the manager of her local branch had repeatedly refused to execute her order to sell her National City stock despite her many requests, Mitchell had written back that he was sorry that she lost her money, but she was the one to blame, not him. After all, she “shouldn’t have gambled.”

An elderly widow wrote, “I can only hope that it will be within your power to make the offenders realize the extent of their guilt and that justice, in some form, will be accorded to the innocent, and ignorant, depositors.”

Pecora believed that if he could discover what had taken place at National City Bank during the run-up to the crash and reveal how small investors had been exploited, the committee would have a chance at passing reforms to regulate the stock market. But he had to work fast. Authorization for the Senate committee’s investigation expired on March 4, the day of Roosevelt’s inauguration.

THIRTY-TWO

FEBRUARY 18, 1933

On the evening of February 18, President-elect Roosevelt was a guest at a gala thrown by New York’s press corps in the grand ballroom of the Hotel Astor on Broadway and Forty-Fourth Street in Times Square. Just past midnight, he gave a look to his closest advisor, Raymond Moley, and slipped an envelope containing a letter under the table to him. Most in the room didn’t notice the envelope, their attention riveted by the skits and jokes, including one depicting the annual luncheon of the Republican State Committee as a breadline.

Roosevelt had received the letter just hours earlier, delivered to him by the Secret Service. Moley read it, trying to keep it hidden on his lap under the table. His eyes widened as he realized who had sent it and what it said.

It had come from Hoover. “A most critical situation has arisen in the country of which I feel it my duty to advise you confidentially. I am therefore taking this course of writing you myself and sending it to you through the Secret Service for your hand direct as obviously its misplacement would only feed the fire and increase the dangers,” the president wrote, explaining his unusual decision to reach out to his successor.

Hoover continued: “The major difficulty is the state of the public mind for there is a steadily degenerating confidence in the future which has reached the height of general alarm. I am convinced that a very early statement by you upon two or three policies of your Administration would serve greatly to restore confidence and cause a resumption of the march of recovery. The large part which fear and apprehension play in the situation can well be demonstrated by repeated experience in the past few years and the tremendous lift which has come at times by the removal of fear can be easily demonstrated…”

Hoover went on to explain that the clear policy statements that he had issued over the course of the previous year had succeeded in defusing budding crises. He then described the current conditions in unvarnished terms, highlighting all the different ways that the financial system was in peril.

“Hoarding has risen to a new high level; the bank structure is weakened as witness Detroit and increased failures in other localities. There are evidences of flight of capital and foreign withdrawals of gold. In other words, we are confronted with precisely the same phenomena we experienced late in 1931 and again in the spring of 1932. The whole has its final expression in the increase of unemployment, suffering and general alarm. During all this time the means of credit expansion has been available, but neither borrowers nor lenders are willing to act in the situation of business.” In closing Hoover urged Roosevelt to name his new treasury secretary as soon as possible.

Moley could scarcely believe what he had just read.

“I looked up at Roosevelt, expecting, certainly, to see some shadow of the grim news in his face or manner,” he recalled. “And there was nothing—nothing but laughter and applause for the play actors, pleasant bantering with those who sat at the table with him, and the gay, unhurried, autographing of programs for half a hundred fellow guests at the dinner’s end.”

Roosevelt’s first choice for his treasury secretary was Carter Glass, who had held the office for three years during the Wilson administration. Roosevelt believed Glass would bring major credibility in financial matters to the new administration, as well as buy the White House plenty of cover from Senate Democrats.

Glass was hesitant. He had just turned seventy-five in January and had spent long periods during the previous year confined to his bed. His doctor in Lynchburg had warned him that his body would not withstand the long, hard workdays required of a cabinet secretary. “I must again advise you that a continued depletion of your nervous system by excessive overwork would inevitably prove disastrous. The exudate of serum, now causing numbness in your left hand, leg and foot, would thereby be accentuated rather than abated and might lead to distressing results,” his doctor told him.

Glass also had his doubts about Roosevelt. While he vastly preferred him to Hoover, Glass was not sure if he could trust the president-elect, whom he considered far too liberal, to stay the course on any policy. Just a week after Roosevelt was elected, Glass wrote to a Republican senator who had lost his seat: “The Democratic victory last Tuesday was too great for comfort. I am afraid it portends much trouble for those of us in Washington who want to see sane things done and insane things prevented.”

Glass and Roosevelt were completely different political animals. Glass prided himself on making unpopular stands when he deemed them necessary—his willingness to fight for long-shot causes was, in a sense, the source of his popularity. Whether they agreed with him or not, his fellow Virginians admired his stubbornness.

Roosevelt, in contrast, was uncannily sensitive to the shifts in political winds, always wanting to make sure they were at his back. He had so far been unwilling to make any public statements about the economy, even as the Federal Reserve had issued a warning about the dangers of devaluing the dollar. Just a week earlier Bernard Baruch, one of Roosevelt’s few champions on Wall Street, had testified before the Senate Banking Committee, sharing his concern about the United States leaving the gold standard and inflating the currency: “I regard the condition of the country the most serious in its history. The mere talk of inflation retards business. If you start talking about that you would not have a nickel’s worth of gold in the Reserve System the day after tomorrow.”

The following day the New York Herald Tribune reported that Glass objected to the growing support for inflationary policies and was seeking “a satisfactory understanding with the President-Elect Roosevelt.”

He didn’t get one when he visited with Roosevelt, who continued his pressure campaign for Glass to take the Treasury role. “It’s your duty to your party, and to your country, to assume this post,” Roosevelt told him. “I won’t take ‘no’ for an answer.”

Glass also sought assurances from Roosevelt that he could name his close friend, Morgan partner—and Lamont confidant—Russell Cornell Leffingwell, as under secretary. “Unless Roosevelt is wise enough to pick a cabinet of sound men like yourself,” Glass wrote Leffingwell, “he will be lost. I wouldn’t have his job for a million dollars a year.”

Leffingwell got along fairly well with the Roosevelt crowd, but the White House wasn’t amenable to giving a Wall Street figure such a prominent position in the administration. Roosevelt privately told his aide: “Make it perfectly clear to [Glass] that, so far as subordinates go, we simply can’t tie up with ’23,” referring to J.P. Morgan’s address. “So far as inflation goes, you can say that we’re not going to throw ideas out of the window simply because they’re labeled inflation. If you feel that the old boy doesn’t want to go along, don’t press him.”

As much as Glass enjoyed being courted for the Treasury job, part of his hesitation was tied to his larger goal of passing a law separating commercial and investment banking. He had written it into the Democratic platform: “The severance of affiliated security companies from and the divorce of the investment banking business from commercial banks and further restrictions of Federal Reserve Banks in permitting the use of Federal reserve facilities for speculative purposes.”

On February 19, the same day Roosevelt received Hoover’s letter, Glass formally declined the treasury secretary offer. “My dear Franklin: I shall never be able to tell you the measure of my appreciation of the honor which you have done me in inviting me to take the responsible post of Secretary of the Treasury in your cabinet. It grieves me to find that I am unable to requite your confidence and kindness by complying with your wish,” Glass wrote Roosevelt. “I may state that, at the last, hoping to allay the fears of my immediate family as to the effect of the proposed transfer on my health, I sought the frank professional opinion of my regular physician. His letter I am sending to you in strictest confidence.”

Roosevelt and Glass had met three times, and the president-elect’s advisors applied significant pressure to change Glass’s mind, even after he declined the role. Yes, Glass’s health was fragile, but Glass let it be known that he would take the job only if he got assurances about Roosevelt’s commitment to sound money policies, but they were not forthcoming.

While wooing Glass, Roosevelt had also come under increasing pressure to cooperate with Hoover’s desperate attempts to head off the collapse of the banking system. Michigan, decimated by the collapse of auto production, declared a bank holiday, meaning a temporary closure of the state’s banks. And the Treasury department reported that another $114 million of gold had slipped away to Europe, an indication of nose-diving confidence in the American dollar. The New York Times called for “a clear and positive declaration of the incoming government’s attitude toward the currency,” while the Federal Reserve again urged Roosevelt to make a statement. But Roosevelt had made a political determination: Anything that happened on Hoover’s watch was not his problem. Why would he make any moves before he was actually president?

On February 21, Roosevelt named William Woodin as treasury secretary, having previously told his aide he was “sick of this she-loves-me-she-loves-me-not business” from Glass.

Hoover immediately instructed his treasury secretary, Ogden L. Mills, to meet with Woodin and deliver a clear message. Roosevelt, Hoover felt, needed to assure the American public that he had his own plan and that it was cautious and sober. Saying nothing was making things worse: People feared that the economic plan being discussed by the victorious Democrats, including unchecked government spending on grandiose projects, would lead to ruinous inflation. “Every last man who has five dollars in the bank will be affected. If this thing isn’t straightened out within 48 hours this country will be flat on its back,” Hoover told an aide. Mills reported back to Hoover that the incoming administration would take no action before assuming office.

When Roosevelt finally replied to Hoover’s original letter, the lame-duck president did not need to read it to know what it said. “I appreciate your fine spirit of cooperation,” Roosevelt wrote. “I am equally concerned with you in regard to the gravity of the present banking situation—but my thought is that it is so very deep-seated that the fire is bound to spread in spite of anything that is done by way of mere statements. The real trouble is that…very few financial institutions anywhere in the country are actually able to pay off their deposits in full, and the knowledge of this fact is widely held. Bankers with the narrower viewpoint have urged me to make a general statement, but even they seriously doubt if it would have a definite effect.

“Frankly I doubt if anything short of a fairly general withdrawal of deposits can be prevented now,” he wrote.

This was brass-knuckled politics. It was almost as if Roosevelt wanted a bank run. But Hoover, at this point in his political career, had seen enough to understand what Roosevelt was up to. The worst thing Roosevelt could do as an incoming president inheriting a catastrophic economy was to sully himself with the old administration’s failures. Roosevelt needed a clean slate.

Hoover acknowledged as much in a letter to Senator David A. Reed, a Pennsylvania Republican. “I realize that if these declarations be made by the President-elect, he will have ratified the whole major program of the Republican Administration; that is, it means the abandonment of ninety percent of the so-called new deal,” he wrote, referring to Roosevelt’s “new deal” campaign plank. “But unless this is done, they run a grave danger of precipitating a complete financial debacle. If it is precipitated, the responsibility lies squarely with them for they have had ample warning—unless, of course, such a debacle is part of the ‘new deal.’ ”

THIRTY-THREE

FEBRUARY 21, 1933

On February 21, 1933, Charles Mitchell made his way through the rotunda of the Senate Office Building in Washington, DC, beneath the soaring dome framed by classical marble columns, and up three flights of steps to Room 301. He was accompanied by an entourage of high-priced lawyers in dark wool coats and bank assistants bundled against the winter chill, their arms stacked high with legal documents.

Tanned and rested from a vacation in Bermuda, Mitchell took a seat across the table from Ferdinand Pecora, chief counsel for the Senate Committee on Banking and Currency. The diminutive Pecora, with his pompadour of thick dark hair and jutting chin, was flanked by senators at a long rectangular table covered with a green felt tablecloth, his cigar and pen at the ready. The gallery was packed with reporters and spectators giddy with anticipation of fireworks.

Displeasure was written all over Mitchell’s face. After he had been served with his subpoena—along with a number of other National City executives—he had called Pecora and tried to talk his way out of testifying, which was a clear violation of protocol. Mitchell and Pecora jousted on the call, Pecora making it clear to Mitchell that his cooperation was not negotiable. There would be no running out the clock or impromptu trips out of the country.

Pecora had little in common with Mitchell or the men of his ilk—he hadn’t gone to a prestigious school or belonged to a fancy club—and generally held a dim view of them. His distance from this world gave him a kind of freedom to prosecute his case without fear.

In the years since 1929, Mitchell, now fifty-six, acted as if he hadn’t the slightest thing to apologize for. The onset of hard times had not diminished his family’s public posture. In the fall of 1932, the Mitchells’ daughter, Rita, made her debut at the Tuxedo Park Autumn Ball, and that December the Mitchells held a “supper dance” at their home on Fifth Avenue, hosting nearly four hundred young men and women from New York’s finest families. Friends and acquaintances assumed that the Mitchells had made it through the financial debacle unscathed.

Behind his assiduousness in keeping up appearances, however, Mitchell hid a dark secret. As the economic climate had continued to deteriorate, he had been slipping deeper into debt. And it was only getting worse.

The morning of Mitchell’s testimony, the Federal Reserve Bank in Chicago announced that the city’s banks might have to shutter before the end of the week due to the fear of unrest. New Jersey passed an emergency rule requiring a ninety-day notice for bank withdrawals, while cities and states around the country applied similar ad hoc measures. Still, amid this widening chaos, National City stood resilient. No frantic customers were lining up outside their branches.

As he prepared for the hearing by poring over reams of internal National City documents, Pecora found Mitchell to be “an impressive figure, forceful, self-confident…a self-made man in the American tradition.” But he didn’t intend to go easy on him. After years of experience in criminal trials, Pecora felt “exhilarated” about the opportunity to interrogate Mitchell.

Pecora got off to a slow, inauspicious start. When Pecora asked about the documents he had subpoenaed, Mitchell and his team replied that they had forgotten to bring them. From there, the Exchange got hung up on process, dull and perfunctory, “like the mumbling of bees pecking at the flowers in a summer garden on a sultry afternoon,” as one journalist put it. This was going just as Mitchell intended, the more boring the better.

Pecora, looking to turn up the heat, asked Mitchell about the millions of dollars paid out to its bankers as part of its “management fund,” or bonus pool, established in 1921 for National City banking executives. Mitchell again replied in the driest terms, as if speaking to an obtuse child. “You see, the National City Company was an investment corporation,” he said, “and it selected as its executives men who would normally be of the type to hold partnerships in private banking and investment companies.”

To Pecora, Mitchell displayed “the loftiest moral tone, no matter how questionable the transaction.” But Pecora bore down, goading Mitchell into slipping from his script with statements that raised the eyebrows of the reporters in the room.

When Mitchell tried to explain that he incentivized salesmen by holding their salaries down to $25,000 a year—which were then boosted by year-end bonuses based on performance—he failed to realize that this represented a princely sum to almost every American, including Pecora. Mitchell’s own annual salary was only $25,000, too, though his bonuses from 1927 to 1929 pushed his total pay to about $3.5 million.

“Do you think it a good system?” interjected Senator James Couzens, a former partner of Henry Ford and the richest man in the Senate when elected in 1922. Like Ford and many industrialists from the heartland, Couzens harbored plenty of ill will toward Wall Street despite his own personal wealth.

“Yes,” Mitchell answered. “I feel quite strongly about it. It established an esprit de corps.”

“Doesn’t it also inspire a lack of care in the sale of securities to the public?” Couzens continued.

“I can readily see, from your viewpoint, that it would seem so,” Mitchell countered, “and I must grant that there must be some influence. At the same time, I don’t recall seeing it operate that way.”

“You wouldn’t,” Couzens added, with derision. “Only the customers would see it after they got the securities. How many of the securities you sold are now in default?”

“That is a difficult question,” Mitchell acknowledged, trying to remain calm and keep his answers crisp and businesslike.

Though empowered to run the hearing, Pecora was not in complete command. At any point, a senator could interrupt and take over the questioning, which annoyed him. Few had any financial expertise; most just wanted their names in the newspapers. For that reason Pecora had banned photographers from the hearings, hoping to limit posturing for the cameras. But he obviously needed reporters there—this hearing, he well understood, was as much aimed at the public as anything else.

As the hearing proceeded, Pecora continued to peel away at Mitchell’s conduct, forcing him to describe how, during a board meeting on December 30, 1929, he had reported that the management fund for 1929 had been completely wiped out. But because the bank had already made payments to the officers in July, covering the first half of the year—when the stock market was still rising—those payments, Mitchell had argued to the board, could not be clawed back. The board passed a resolution designating the 1929 payments as an “advance” or “overpayment,” to be paid back in the future, which meant that they did not have to be reported as income on the top bankers’ 1929 tax returns. Mitchell himself avoided paying any tax on his own $500,000 bonus.

Pecora began a new series of questions that suggested Mitchell sold stock to his customers at a huge premium and that his customers had no idea the degree to which the bank was profiting from them.

“If I go in and buy a pound of coffee there is no indication as to what the grocer paid for it and what profit he got for it,” Mitchell said, defending his approach.

“But when a person goes to a store to buy a pound of coffee he knows the merchandise that he is buying, doesn’t he?” Pecora countered.

“Well, from some of the coffee that I have drunk I wouldn’t think he did.”

In the company Mitchell usually kept, such a line would surely have elicited a laugh. But not in that hearing room.

Senator Couzens drilled into Mitchell’s reputation as Sunshine Charlie.

“I understand,” said Couzens, “that you have quite a national reputation as a salesman and a financier both.”

Couzens asked Mitchell which one was his greatest talent.

“Is that a fair question?” Mitchell asked. Couzens told Mitchell he would answer it for him if the banker preferred.

Mitchell stopped him. “I have rarely seen an executive who had to do with the public and the management of a great corporation who was not inherently, by personality or otherwise, in the class that might be called a good salesman,” Mitchell said.

“I should judge you to be a better salesman than a financier,” Couzens posited, “and that is not a disparagement of your financial ability.”

“I thank you for the compliment,” Mitchell replied.

It wasn’t until the afternoon testimony got underway that Pecora started to get comfortable. He went hard at Mitchell about his compensation, a subject he knew would keep the journalists in the room from nodding off. After some warm-up questions about stock buying, Pecora asked Mitchell how much of his National City Bank stock he had sold in 1929.

“I held in the midst of the panic all the stock I had owned for a long, long time,” Mitchell said.

He then explained that “in order to keep the market from collapsing where it would be destructive to the interests of our shareholders, I permitted the National City Company to put into an account which I established for them of my own stock which they might purchase from our shareholders to the tune of $12 million. In other words, I put all that I had back into this institution, and for its stability. Some of that stock was subsequently sold. There were personal transfers through the years. Today I hold the largest amount of stock of the National City Bank that I have ever held.”

The room quieted down as spectators listened intently to Mitchell. He acknowledged that he had purchased 28,300 additional shares in 1929, paying between $375 and $380 each, with the intent of keeping them only temporarily to prevent the stock from collapsing. During the weeks after the panic, he said he sold 10,000 shares, which left him with a total of about 53,300.

Mitchell then explained that he subsequently sold more stock “frankly, for tax purposes.”

Pecora and the senators seemed to pause for a moment. That answer started turning the gears inside the minds of his questioners.

“That was to avoid income tax?” piped up Senator Smith W. Brookhart of Iowa.

“Throwing my fortune into the breach as I did for the benefit of this institution,” Mitchell said. “Senator Brookhart, in 1929, I had a definite loss in that stock which I was forced to take.”

“That sale was really just a sale of convenience, to reduce your income tax?” Brookhart retorted.

“You can call it that if you will.”

“Well, is that right?”

“Yes, it was a sale, frankly, for that purpose,” Mitchell said, adding that he “hoped the buyer would be able to make a profit.” That did not happen, however. The buyer ultimately had lost so much money that Mitchell bought the stock back at the price he had sold it for.

“This buyer was a friend of yours?” Brookhart asked. “He had favored you and you wanted to favor him?”

“It was not that kind of negotiation,” Mitchell volleyed. “But I simply could not see that buyer take that loss. And I hold today that stock.”

Brookhart was incensed by Mitchell’s effort to portray the stock sale as somehow a noble transaction. “You did not have a similar sympathy for all those buyers here in the room,” Brookhart exclaimed, “and buy that stock back, did you?”

Mitchell was indignant.

“If anybody here in the room, or anybody that you know, has suffered a loss in gross that I have in City Bank stock, then you know somebody that I do not,” said Mitchell, not quite succeeding in concealing his rising ire. “I, individually, have suffered a greater loss from the market failure in National City Bank stock than any other individual in the United States.”

Brookhart, almost by accident, had struck a raw nerve—and Pecora quickly jumped in. “How much loss did that sale enable you to show?” he asked. “Wasn’t it nearly $2,800,000?”

Mitchell said it was likely between $2.7 million and $2.8 million.

“That enabled you to avoid an income tax for 1929, did it not?”

“Yes, my losses had been such that I did not have to pay it,” Mitchell replied.

“That sale of this bank stock that you referred to in the latter part of 1929 was made to a member of your family, wasn’t it?”

“It was,” Mitchell acknowledged.

By the letter of the law, that may, or may not, have been a crime, but it was no doubt unseemly and suggested a possible vulnerability on Mitchell’s part. All across the country, prosecutors had begun to realize the power of enforcing tax laws. The gangster Al Capone had finally been packed off to prison in 1932 on tax evasion.

The committee never asked Mitchell to disclose the identity of the person to whom he sold the stock, which had been his wife. That remained, for now at least, one of his well-guarded secrets.

THIRTY-FOUR

FEBRUARY 22, 1933

Mitchell’s first day of testimony cost him dearly, and he knew it. As he arrived the next morning for day two, reporters besieged him with questions about the “relative” with whom he’d swapped the stock. Mitchell had no intention of divulging the name, and as reporters continued to press, he declared, “I shall make no statement as to that while these hearings are still in progress.”

The hearings had become a spectacle. When Pecora walked over that morning to the Senate building from the Mayflower Hotel, where he was staying during the proceedings, there were so many spectators trying to get into the hearing room that a line formed out into the hallway.

Pecora started his questioning that day by prodding Mitchell about how he and his associates had ignored their obligations to shareholders and customers, and even lower-level employees, to line their own pockets.

Mitchell, seething from the previous day’s testimony, was not ready to move on. He charged that Pecora had treated him unfairly, creating an “incorrect impression” about some of National City’s investments. He appealed to Senator Norbeck to be allowed to make a statement.

“Whatever wrong impression was created yesterday,” Pecora snapped, “was created by your testimony, because you were the only witness who testified yesterday, isn’t that a fact?”

“You may proceed, Mr. Mitchell,” said Norbeck.

The tone for the proceedings was now fully set. Drained of his humor and charm, Mitchell was scrambling to clarify and explain, becoming more defensive as the morning went on, a deeply unfamiliar and uncomfortable feeling for him.

Pecora kept hammering Mitchell until recess for lunch was called at 12:50 p.m. When everybody reconvened at 2:30 p.m., Pecora summoned Gordon Rentschler, Mitchell’s right-hand man, to testify.

After a few perfunctory questions about Rentschler’s background and responsibilities at National City, Pecora took aim at a compensation deal the bank had arranged shortly after the crash. On November 13, 1929, while National City Bank had been mercilessly closing out thousands of its customer accounts for insufficient margin, it had sought to “sustain the morale of the organization and to protect the officers in the existing emergency” by establishing a fund of $2.4 million from which one hundred of the bank’s top executives could borrow money to buy company stock. The price was then about $200 a share; it later fell as low as $25 and was at about $40 when Pecora started his inquiry. What Pecora knew—and was intent on getting Rentschler to admit—was that virtually none of these loans had ever been repaid. In fact, the bank had quietly shifted them off its own books and onto the balance sheet of National City’s security affiliate. By comparison, low-level employees who had pledged deductions from their salary to buy stock at up to $230 a share in 1929 had not been let off the hook and were forced to keep making payments toward the full purchase price long after the crash. If they failed to stay current on those payments, they lost their jobs.

Pecora also went after Rentschler for the way National City Company, the security affiliate, had promoted the bank’s stock, an intermingling of roles that put customers at a disadvantage.

“Don’t you know that the National City Company during this period of time was going out in the byways and highways soliciting customers for the stock of the bank?” asked Pecora.

“Looking back…it was a very desirable thing for us to broaden our contacts,” said Rentschler, “that is, for the banking institution to broaden its contacts to make it possible for more people to become stockholders in our bank.”

“You do not regard that as in effect the selling or buying of bank shares by the bank itself?” Pecora asked.

“No, sir.”

“Because in form at least it was done by the National City Co.?”

“Right. But in the light of experience I am perfectly willing to say to you I prefer that the National City Co. not sell shares.”

“Why did you do that if it was all right?” Brookhart broke in.

“I do not think any of us had foresight to see the great catastrophe that was coming across the world in this last two or three years, Senator Brookhart,” Rentschler retorted.

After dispensing with Rentschler, Pecora retrieved Hugh Baker, National City’s head of trading, from the spectator section to confront him with correspondence showing that National City Bank had advanced credit to a brokerage house for purchasing its stock. “Isn’t this the spectacle of a bank trading in its own stock?” Pecora asked.

Baker “paused for a moment,” then answered flatly, “It doesn’t seem so to me.”

“You say that in view of these letters? In view of the fact that this firm was furnishing funds for purchase of its own stock for delivery to a subsidiary?” The bank had, in fact, provided the same secret courtesy to fifteen or twenty brokerage houses.

When Pecora questioned Mitchell about these practices, he insisted there was nothing nefarious about these loans to brokerages.

“Since I’ve had any connection with the bank we have never lost a penny” making such loans, which were typically considered “overnight loans” that were repaid within a day, Mitchell asserted.

“People running poker games could tell you that,” Senator Brookhart countered. “The fact that you succeed in a gambling operation doesn’t make it any better.”

Mitchell rejected the idea that day loans were comparable to gambling. “They promote speculation,” Brookhart insisted, “and in this case in your own stock.”

Pecora next introduced a letter that had been sent to National City Company’s salesmen, urging them to offer the bank’s stock at five points below the market price as an inducement to new customers. They had to be crafty in doing so, however, to keep existing clients from getting upset. The discounts were hugely successful, luring nearly seventy-five thousand new customers in one especially good year.

Under Pecora’s relentless questioning, Mitchell admitted the bank had made mistakes. “We are trying to remedy the situation ourselves,” he said, “but I know we have a long way to go.”

After the revelations of the first several days of testimony, John J. Bennett Jr., the attorney general of New York, announced he was opening an investigation to determine if National City Bank and its affiliate had violated federal statutes with the bonuses to officers, the operations in Anaconda and other copper stocks, and its trading in the stock of the bank, among the questionable actions that had been revealed.

Before the week ended, and based on the astounding discoveries that had already come out in the hearings, a senator on the committee introduced a resolution to extend the committee’s investigating powers beyond Roosevelt’s inauguration on March 4, a request that was likely to be granted.

“Nothing will restore confidence in our banking structure more promptly than demonstrated proof that we have a government that has the courage and integrity to prosecute with equal vigor these malefactors of great wealth as well as the humbler offenders,” proclaimed Senator Burton K. Wheeler of Montana in a radio address. “These men, trusted by their depositors, stockholders, and investment clients, traded on that sacred confidence to their own profit and to the ruin of those who trusted them.”

Editorialists at newspapers across the country thundered with outrage at Mitchell. “This is a sample of the scruples exercised by the group that whooped up the stock market boom, diverted credit from legitimate business, exercised a controlling hand at Washington, and took the American people for the greatest buggy ride in their history during the last decade,” wrote the Philadelphia Record.

At the center of it all was Mitchell, now the object of public fury. The man who had been so admired as the leader of the world’s largest bank was being held up as the embodiment of hypocrisy, a preacher of financial ethics who practiced deception, setting a tone at the top that reverberated down through brokerages and to the unsuspecting and unprotected public.

The influential journalist Walter Lippmann, who had abstained from Wall Street bashing even as it became increasingly fashionable after the crash, could no longer hold back. “No set of men, however honorable they may be, and however good their traditions, can be trusted with so much private power,” he wrote.

And where was Carter Glass during all this Sturm und Drang? Publicly, he declined to take part in the Pecora hearings, which he considered a de facto show trial. Yet he also knew how much the hearings could help his reform efforts.

Behind the scenes, Glass was secretly supplying the committee with piercing questions, as he simply couldn’t resist the opportunity to put the screws to his old nemesis. At one point, a Senate aide passed Pecora a note that read: “Reminding you of two questions to be asked of Mr. Mitchell at the suggestion of Senator Glass, whose connection is not to be disclosed.”

And when the Mitchell testimony was over, Glass was the first to say, I told you so.

“These disclosures…prove conclusively the truth of what I said on the Senate floor four years ago—at the height of the boom—namely, that the Federal Reserve System was being used to aid the speculators rather than those for whom it was created,” he said.

At about 11:30 p.m. on Sunday, February 26, after an emergency meeting of the board of National City, Mitchell did what would have once seemed unthinkable: He tendered his resignation from National City Bank, severing all ties with the company to which he had devoted his life and that had made him an era-defining figure. “I personally have been brought under a cloud of criticism from which I conceive that the institution should not be permitted to suffer by my continuance in office,” Mitchell said in a hastily prepared statement.

Heading into the confrontation with Pecora, he could never have imagined that within a matter of days his reputation would be in ruins. But the headlines were too much for the bank, for the board, and for him. Mitchell’s statement wasn’t an admission of wrongdoing or a defense of his actions. Instead, he simply cited the fog of “public misunderstanding” created by the “ex-parte hearings.”

While many wondered what National City would be without Charles Mitchell, his mind was on another question—who would Charles Mitchell be without National City?

Then there was the matter of the money. As long as he was in a position of power and drawing a large salary, Mitchell could keep the lingering problem of his own insolvency under control. Now it wouldn’t be so easy. National City Bank’s directors worried that Mitchell’s resignation might ignite a run. They consulted both Hoover and Roosevelt, who expressed the same opinion: Mitchell’s resignation should be accepted posthaste.

Mitchell’s lawyer Robert Cary called Pecora at midnight and told him the news. “Of course, Mr. Pecora, under the circumstances it won’t be necessary for Mr. Mitchell to resume the stand,” Cary said.

“Oh, why do you assume that?” Pecora replied.

Cary explained that because Mitchell was no longer with National City, no purpose was served by his testimony.

“Let me suggest to you, Mr. Cary,” Pecora said, “this investigation is not a headhunting expedition; it’s a fact-finding expedition. I want to continue to examine Mr. Mitchell to get all the facts I can presented to the committee, consistent with the committee’s authority to make an inquiry. Of course, he’d have to resume the stand.”

The March 6, 1933, issue of Time had a story with a headline that said it all: “Damnation of Mitchell.”

THIRTY-FIVE

MARCH 3, 1933

On March 3, 1933, the day before Roosevelt’s inauguration, he and his family visited the White House, as was customary, to pay their respects to the outgoing president. Sometimes, when the same party stayed in power, this meeting took the form of a celebratory dinner. In more recent years it had been an afternoon tea. Hoover was initially disinclined to offer either, but he relented and invited the Roosevelts to tea. It wasn’t the warmest affair. When they arrived, Hoover made them wait for half an hour and then roped Roosevelt into an unscheduled meeting with Treasury Secretary Ogden L. Mills to make one final plea for joint action on the economy.

Roosevelt didn’t much want to be at this gathering, either. For the past seventy-two hours he had been huddling with his advisors at the Mayflower Hotel, writing and rewriting his inauguration speech, while Hoover had been a few blocks away at the White House, still doing everything he could to try to stem a bank run. Hoover’s own press secretary, Theodore Joslin, had pulled his money from his checking account earlier in the week despite feeling “unpatriotic” about it. “Don’t hoard it, Ted,” Hoover told Joslin. “Put it in another bank that is safe.”

That same day, the New York Stock Exchange had stopped trading, with no indication of when it would resume. The economy was slipping into paralysis.

Roosevelt received a letter from Lamont suggesting he did not fully appreciate how rapidly the economy was deteriorating, not just in rural areas but increasingly in cities, and how quickly it was infecting the banking system. Lamont described the panic as “far more critical than I had dreamed. I believe in all seriousness that the emergency could not be greater.” He urged Roosevelt to collaborate with Hoover to create confidence in the banking system before the American populace sank under the strain. “Urban populations cannot do without money. It would be like cutting off a city’s water supply. Pestilence and famine would follow; with what consequences who can tell?”

Aides at the Federal Reserve Board and Treasury shared Lamont’s anxiety and had called Hoover asking him to declare a national banking holiday and shut down all the banks in the country.

“How horrible it is for me to have such a proposal made on the eve of my leaving office!” Hoover told an aide about the request. “To do so would be passing on to my two sons an inheritance which I would not countenance doing. You should know what my answer would be. No, no, no!”

In the intervening hours Hoover had crafted a nuanced request to his successor that he believed could prevent the banking system’s collapse without having to close them all. He suggested that Roosevelt make a proclamation of emergency powers that would enable him to restrict the outflow of currency and gold. Such powers, he explained, were embedded in a section of an old statute called the Trading with the Enemy Act.

“Like hell I will!” Roosevelt responded. “If you haven’t the guts to do it yourself, I’ll wait until I’m president to do it,” he replied. He told Hoover to invoke the emergency powers himself as one of his last presidential acts, if he so chose, and added, “I shall be waiting at my hotel, Mr. President, to learn what you decide.”

Back at the Mayflower, Roosevelt huddled with his advisors, including Woodin, Jesse Jones, Cordell Hull, and Carter Glass, who argued resolutely against closing the banks. “I think the president of the United States had no more valid authority to close or to open a bank in the United States than had my stable boy,” Glass said.

Roosevelt fielded many calls that night—from bankers, Fed officials, and one particular person from the House of Morgan.

“Lamont called from New York to recommend that no action be taken: It was thought by the leading bankers there that the banks could pull through to the next noon and possibly, then, with Roosevelt in office, a sweeping change in psychology would take place before Monday,” Raymond Moley, Roosevelt’s advisor, recounted. “We were all, by then, indescribably tense—even Roosevelt.”

At 11:30 p.m. Roosevelt got the last call of the evening—a final plea from Hoover. Glass, who was still present, could hear one side of the conversation. Hoover made one last effort with Roosevelt to declare a bank holiday to buy them some time. Roosevelt replied that both he and Glass were opposed. He told Hoover that Glass “believed the country should go temporarily onto a clearing-house scrip basis”—meaning that banks would issue an emergency currency in lieu of cash.

At this point, they had just about run out of ideas and prepared to adjourn. Just before leaving, Glass asked Roosevelt what he expected he would do about the banks when he became president. “Planning to close them, of course,” Roosevelt replied.

On March 4, Roosevelt and Hoover rode together under a gray sky in an open car to the Capitol grounds, where Roosevelt would take the oath of office. The mood was like that of the inauguration ride four years earlier, only now in reverse: Instead of a cheery Hoover and a morose Calvin Coolidge, it was now a beleaguered, stone-faced Hoover and an ebullient Roosevelt, wearing a confident smile.

That smile, however, masked a deep sense of foreboding. Just before the inauguration had begun, the governor of New York, Herbert H. Lehman, declared a bank holiday in the state, effectively shutting down every major bank to avoid a run. Illinois followed suit. One by one almost every bank in the country had closed by the time Roosevelt took the podium.

After being sworn in, facing the crowd of 150,000, the new president laid out his vision for the new era—one that put Wall Street, the banks, and all of American business firmly under the thumb of Washington. Inspired in part by Mitchell’s downfall and Lamont’s pleas, Roosevelt’s speech used the corruption of bankers as the rationale for an unprecedented assertion of federal authority.

“Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men,” he said. “Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

“The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.”

Roosevelt spoke for not even twenty minutes, short by historical standards, striking a tone of defiant optimism.

That same afternoon the newly inaugurated president directed Senator Duncan Fletcher, who would take over the chairmanship of the banking committee the next day, to broaden its investigation “to include all ramifications of bad banking so that the government will be able to guard against their continuance and prevent their return.”

Wall Street lawyers responded by insisting the committee had no such authority and advised their banking clients to simply refuse Fletcher’s subpoenas. The committee then sought and received broad authority from Congress to allow it “to make a thorough and complete investigation of the operation by any person, firm, co-partnership, company association, corporation, or other entity in the business of banking, financing and extending credit.”

On Sunday, March 5, the second full day of his presidency, Roosevelt ended the epidemic of bank runs by declaring a national bank holiday and shutting them all down, the first time the entire banking system was shuttered at once. What would’ve been viewed as a desperate measure if carried out by Hoover was instead received as a bold executive action. The Mellon National Bank in Pittsburgh, owned by the former treasury secretary Andrew Mellon, briefly defied the order and remained open for business, but that was the exception. Without access to banks, people improvised and cooperated. In Buffalo, the winner of a prizefight was paid in potatoes and tomatoes. Yale psychologist Edward Robinson had predicted that “when the banks close, everybody will feel relieved. It will be sort of a national holiday,” and he was largely right.

Along with the bank closure came a temporary embargo on the hoarding and export of gold—which some viewed with alarm as tantamount to giving up the gold standard. Woodin immediately moved to silence critics. “It is ridiculous and misleading to say that we have gone off the gold standard,” he said.

Closing the banks proved easy compared to what came next—reopening them. Roosevelt had decreed that only sound banks would reopen, but how would the line be drawn between sound and unsound institutions? There was hardly a lending institution in the world that wasn’t hurting to some degree. Various schemes were designed that divided the banks into three broad categories: those that could stand on their own, those that needed to be reorganized but could survive, and those that had to be liquidated. The situation was unmanageable—even with the more than five thousand bank failures since 1931, the sheer number of banks overwhelmed the regulatory capacity. There was little choice but to err on the side of keeping as many banks open as possible.

On March 13, American banks began to reopen. New York’s were among the healthiest in the nation. Of the hundreds of banks operating in New York City, all but nine were active immediately. The New York Stock Exchange had also been closed during the bank holiday; after missing seven full trading days, it gained 15 percent when it reopened. Wall Street may have had its power and its pride cut sharply, but it was ready to see what it could do with the “Roosevelt market.”

Roosevelt took advantage of his honeymoon to push through a flurry of bills in his first one hundred days, creating the Civilian Conservation Corps, the Federal Emergency Relief Administration, and the Tennessee Valley Authority. But despite all the excitement about the dawning of a new era, Senator Carter Glass found himself struggling to gain his own party’s attention and put Wall Street in its place once and for all.

THIRTY-SIX

MARCH 7, 1933

On the morning of March 8, when Carter Glass opened the newspaper, his crusade for banking reform took a turn that he could never have imagined. National City Company, “which has placed more securities with investors than any other banking institution in Wall Street history,” according to The New York Times, announced it would divorce itself from National City Bank. In other words, without any prompting from the government, the banking behemoth had decided to separate its commercial bank from its investment bank. The Charles Mitchell era was officially over.

The bank’s decision to split in two made Glass’s bill somewhat moot, at least insofar as his favorite target was concerned. Glass’s banking bill only stipulated the separation of securities trading operations for nationally chartered banks like Mitchell’s National City. The fine print of Glass’s bill, unnoticed by most, left private firms like J.P. Morgan untouched.

The next day, Glass was hit with a bigger surprise: Winthrop Aldrich, who had just taken over Chase, the nation’s largest bank, waded into the fray with a declaration that all banks, public and private, be forced to do what National City had just done and stop trading securities. He committed that Chase would end the practice, too. And then he went one step further: He said that investment bank executives should also be barred from serving as directors of commercial banks, a move clearly aimed at J.P. Morgan’s business model, which relied on its partners’ intimate relationships with big commercial lenders.

“I do not think,” Aldrich declared, “that the Glass bill goes sufficiently far in separating the business of commercial banking from that of dealing in securities. To separate commercial banks from their security affiliates is only half the problem.”

Aldrich was the brother-in-law of John D. Rockefeller Jr. He was a mix of old-money conservatism and Machiavellian instincts. The forty-seven-year-old son of late Rhode Island senator Nelson Aldrich, who had worked alongside Glass to shape the Federal Reserve, Aldrich was a yachtsman, society figure, and painter of watercolors. Among his many smart career moves had been leveraging his sister’s marriage into the Rockefeller family—who had been his father’s benefactor—into a stepping stone for his own rise.

Aldrich had been the president of Equitable Trust, of which the Rockefellers owned the largest stake. He had helped orchestrate the merger of Equitable Trust with Chase, making the Rockefellers Chase’s largest shareholder. Demonstrating a talent for aggressive power plays, Aldrich promptly ousted Chase’s longtime chief executive, Albert Wiggin, and took the role for himself.

Now, with the burgeoning momentum behind bank reform in Washington, Aldrich seized the chance to upend his rival J.P. Morgan by expanding the separation of commercial banking and securities trading to include all firms, not just the big publicly traded lenders.

Rather than build support quietly behind the scenes, he went right to the newspapers for maximum impact.

“A clashing of the Rockefeller interests with the House of Morgan and other financial groups was seen in the announcement of Winthrop W. Aldrich,” The Buffalo News splashed in its front-page article.

Whether or not Aldrich genuinely believed his proposals constituted sound public policy, Aldrich’s shrewd maneuvering marked the dawn of a new era on Wall Street. For as long as anyone could remember, the nation’s bankers had agreed on one thing: Interference from Washington benefited none of them. Now, as the inevitability of major reforms sank in, Aldrich and the Rockefellers showed them all the necessity of jockeying for whatever regulatory advantage they could get. This is how the game would be played.

Glass was blindsided. Though he dearly wanted to separate lending and trading, Glass, a believer in private enterprise, just wanted to rein in the biggest publicly traded institutions. In particular, he had no interest in harming J.P. Morgan, which was a private partnership. For all his down-home Virginia roots, Glass had bought into the Morgan mystique. Morgan partner Russell Cornell Leffingwell, who had served as his deputy at Treasury in the Wilson administration, was practically family. Glass would have been more than comfortable letting the firm continue its business as usual.

As the bill was coming together, Glass and Leffingwell corresponded constantly, with Leffingwell offering suggestions and Glass providing updates. Had the public ever discovered just how close the two men were, Glass’s reputation as an independent politician might have been shattered. But he tried to keep it a closely guarded secret.

Aldrich, whose Rockefeller bona fides gave him practically limitless access to the upper reaches of power, immediately began courting Roosevelt and making the rounds in Washington. Though he only had three years of experience in banking—he’d been the Rockefellers’ lawyer before then—he felt very much in his element. After all, this was more politics than business.

“Two Senators, members of the Banking and Currency Committee of the Senate, have approached me indicating that they would like to talk with me,” Aldrich wrote to Roosevelt. He then asked for a personal meeting: “I have felt myself that it might be more useful to you if I talked with you fully with regard to this matter before talking to anyone else.”

Roosevelt invited Aldrich to the White House four days later at noon. Sitting in the Oval Office, Aldrich made his case for including all financial institutions in the bill. Roosevelt quickly signed on. The meeting could hardly have gone better. The president’s special counsel, Samuel Huston Thompson, told Roosevelt that he “believes that Mr. Aldrich would be able to convince Senator Glass of the necessity for incorporating his views in the Glass legislation.”

Glass, who had no desire to collaborate with an unelected interloper on his bill, was deeply frustrated. And as much as he privately hoped to protect Morgan, Glass knew that he couldn’t very well stand up on the floor of the Senate and openly challenge the new president on behalf of one of Wall Street’s best-known institutions. As a fellow Democrat, Glass had duly supported Roosevelt—what choice did he have, really?—but he found dealing with the man was a frustrating experience. You never knew where he stood. Everything was political. Glass wasn’t even sure he could convince Roosevelt to support his bill. But he knew he had to try.

“More and more, I am completely satisfied with having declined to go to the Treasury,” he wrote to a friend, complaining about the new president. “I am sure I would have found it absolutely necessary to resign in a short while had I gone there.”

On March 11, a fight nearly broke out on the floor of the Senate.

While Glass had been building support for his bill, Senator Huey Long of Louisiana, a volatile Democratic populist known as “the Kingfish,” was trying every tactic he could think of to block it.

Long had arrived in the Senate in 1932 after nearly being thrown out as governor for bribery and misappropriating state funds. He was a known charlatan, though far from the only one holding elective office in Washington. Glass privately described him as “the creature who seems to have bought and stolen his way into the United States Senate.” Long had his own sights set on taking the White House as the champion of the common man, and if that meant bucking his own party, he was perfectly happy to do so. “All I care is what the boys at the forks of the creek think of me,” he proclaimed.

Soon after the Senate passed an emergency banking bill and the session adjourned, Long discovered that an amendment he thought he had added to the bill—to allow small state banks to receive the same benefits as members of the Federal Reserve without having to meet its stringent regulations—had been stealthily removed by Glass. He flew into a rage.

“A fitting climax to this glorious accomplishment,” Long called out, mocking Glass’s creation of the Federal Reserve.

Glass did not take insults lightly. Wagging his finger at Long, a tall, imposing figure thirty-five years his junior, he said, “I am tired of this man making a personal issue of the matter,” and followed it with “You damn ___,” using an epithet that newspapers refused to print in accounts published the following day.

Long screamed back, “Now you listen here!”

Glass challenged Long to meet him in the cloakroom for a literal fight and started toward the doors. Augustine Lonergan, a Democrat from Connecticut, tried to quell the tension.

“Right or wrong, Huey has a pretty popular proposition on the state bank matter,” someone managed to point out amid the scrum.

That set off Glass again. “Oh, ‘popular’—‘popular!’ ” he exclaimed. “What do you want to do, run the banks by mass meeting? Any qualified bank can join the Federal Reserve system now,” he said, and then left the building.

After the skirmish, Long recounted his version of the fracas. “I said, ‘I couldn’t hit you, you are too old a man,’ ” Long told the press. “Then I walked away. I knew he couldn’t hurt me. But I thought he might hit me in the back of the head. He went off cussing me…He said I was a scoundrel and a few other things like that, which I don’t mind.”

Beneath all the vituperation lay substantive differences.

Glass’s bill stipulated that members of the Federal Reserve relinquish their security affiliates within five years and prohibited them from making depositors’ cash available in the call-money market. He was not fundamentally opposed to big banks, as his bill also proposed that member banks be allowed to open branch offices outside their home states, which was currently forbidden but which he believed would stabilize the system. In his view the thousands of tiny, undercapitalized lenders that dotted the American landscape undermined the stability of the entire banking system. Their markets were too small and interdependent. A rural bank that lent to local farmers could be easily wiped out by a bad crop. But if these banks were part of a larger network, they’d have other customers to fall back on.

It was Glass’s preference for large institutions over little scattered ones that triggered Long. To Long’s way of thinking, little banks were the backbone of America, a hedge against the evil forces of centralized power. If banks were allowed to open branches everywhere, New York would effectively be running the entire country. More than anything, that was what Long feared, and he intended to do everything in his power to prevent that from happening.

Latching on to Glass’s branch-banking provision as a big-city incursion against small-town America, Long had staged a grueling ten-day filibuster, a disrespectful tactic rarely employed against a fellow party member. When the filibuster was finally broken, Glass got his bill through the Senate by a resounding 54–9 margin, but Long had killed its momentum. “Now that you take this carcass out of the Senate, you won’t need to follow it to the House,” he taunted Glass. “It has no more chance to become law this session than I have to become Pope of Rome—and I’m a Baptist. It’s dead as a hammer.”

Long was right; the bill died in the House. It was an embarrassing defeat for Glass, but it paid off in one respect. The Virginia senator was catapulted back onto the national stage. His distinctive tuft of hair and beak-like nose graced the cover of Time, accompanied by a long and laudatory profile that praised him for “keep[ing] his temper and his tongue when abused by windy petti-foggers for whose intelligence he had only scorn and contempt. A man of smaller calibre might have given up the struggle.”

On the evening of March 12, the night after Glass’s fight with Long, Roosevelt addressed sixty million Americans on the radio, his first “fireside chat,” assuring them that banks would shortly reopen. “It is safer to keep your money in a reopened bank than under the mattress,” he told listeners. “We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in their handling of the people’s funds. They had used the money entrusted to them in speculations and unwise loans…I do not promise you that every bank will be reopened or that individual losses will not be suffered, but there will be no losses that possibly could be avoided.”

THIRTY-SEVEN

MARCH 21, 1933

At 9 p.m. on March 21, 1933, federal marshal Raymond J. Mulligan, clutching an arrest warrant signed by a federal judge, Alfred C. Coxe, knocked on the door of Charles Mitchell’s mansion on Fifth Avenue.

When Mitchell came to the door, Mulligan arrested him. Mitchell, in an almost catatonic state, put on his coat and hat and was taken to the federal building to be booked and arraigned. The charge was tax evasion.

An affidavit proffered that evening alleged that Mitchell had paid no tax on more than $3 million of income in 1929, claiming a net loss of $48,000. Bail was set at $10,000.

Mitchell had been steeling himself for the possibility of being prosecuted ever since his run-in with Ferdinand Pecora. Mitchell and his wife, Elizabeth, had met with federal investigators the prior week and understood the likelihood he could be charged. But it felt like it all happened so quickly: The U.S. attorney decided at 6 p.m. that night to arrest him and the police were at Mitchell’s home three hours later. President Roosevelt was briefed on the plan and approved it.

Just days before his arrest, The New York Times opined that “the prosecution of an outstanding violation of the banking law would be the most salutary action that could be taken at this time. The feeling is that if the people become convinced that the big violators are to be punished it will be helpful in restoring confidence shaken by the Senate committee revelations.”

Because the statute of limitations for Mitchell’s tax avoidance was set to expire in three weeks, George Z. Medalie, the U.S. attorney for the Southern District of New York, quickly presented the case against Mitchell to a grand jury the day after his arrest; the grand jury immediately indicted him. He was accused of evading taxes of $728,000 in 1929, taking a deduction on a loss of $2.8 million in National City Bank stock by virtue of a “sham” sale to his wife, Elizabeth, as well as failing to report as income a payment of $666,666 from the management fund he received in July 1929. The government later added an additional charge of failing to pay taxes of $156,791 in 1930, centering around an allegedly fraudulent sale of Anaconda Copper stock.

The onetime darling of the press now found himself the object of scorn, and even hatred. The epithets flung at him by editorial writers included “unscrupulous,” “shameless,” “morally obtuse,” and “a consciousness manipulator.”

“The only difference between a bank burglar and a bank president is that one works at night,” wisecracked a writer for the Chicago Tribune.

Mitchell, who felt he was being singled out for doing something that everyone on Wall Street did, immediately hired Max D. Steuer, the sharp-tongued trial lawyer famed for his ruthless cross-examination, to add to his stable of attorneys. Facing Pecora and the Senate Banking and Currency Committee was one thing; facing the Department of Justice in a federal criminal trial was another. If he lost, he could serve up to ten years in prison and pay up to a $20,000 fine. Mitchell pleaded not guilty.

Mitchell left the courthouse, escorted by a deputy marshal who walked him down two flights of stairs to exit by a side door. He was driven through the dark streets uptown and was home by 11 p.m.

His trial was set for mid-April.

Two days later, on March 23, Thomas Lamont traveled to Washington, DC, to meet first with Treasury Secretary William Woodin at the Treasury Building and then with the president himself at the White House.

Mitchell’s arrest was still the main topic of discussion in the Capitol that morning. To Lamont, his partners, and his peers, it was a clear signal that Wall Street was in the line of fire in a way it had never been before.

Lamont was hoping to serve as a peacemaker—to calm the waters by presenting himself as a constructive, thoughtful, and respectful ally. He knew there was nothing to be gained from going to war with a sitting president, much less one whose popularity was rising as fast as Roosevelt’s. While Lamont had never been a political supporter of Roosevelt, he had a natural talent for befriending people in power—and in this case had already established a relationship with him years earlier: The Lamonts had rented Roosevelt’s family home on Sixty-Fifth Street, just off Park Avenue, in 1914.

Tell us “what you want us to do, and we’ll come as near as we can to doing it,” Lamont assured the president. “We want to cooperate along sound and helpful lines.”

Roosevelt wasn’t having any of it from his former tenant. Investment affiliates, he said, had to be separated—or “lopped off”—from banking firms within the year. Accepting that the president was committed to this position, Lamont merely asked for more time, warning that forced selling of any kind would be damaging to the economy. “Not under two years,” Lamont replied, suggesting that the additional time was needed to avoid “breaking the market.”

“Now, what about officers’ bonuses?” asked Roosevelt. “That’s got to go! My gosh, I feel Charlie took my money.” Charlie being Charles Mitchell of National City. “Scandalous!”

“I won’t quarrel on that topic,” Lamont said, hoping to avoid riling the president further.

Roosevelt admitted that he had personally profited from investor pools in the past but now understood that “it was all wrong.”

Lamont listened patiently as the president then turned to insider trading: “Another thing. If corporate officers and directors speculate in their own shares on inside knowledge, they must tell the public when they’re buying and selling.”

Lamont agreed but added, “You can’t prevent a man from selling his investment if he thinks general conditions are worsening.”

Lamont quickly realized that he had to do more than simply raise objections to the president’s plans. He had to offer something Roosevelt needed. As low as Wall Street had sunk in the public’s estimation, Lamont believed that the nation could not fully recover with a prostrate financial industry. Lamont needed to give the president a blueprint for keeping Wall Street afloat.

“Will you let me send you a memorandum on banking reform, bank investment affiliates, handling securities, private bankers?” Lamont asked. “It will then be yours, if there’s any virtue in it, not mine.”

Roosevelt was not particularly swayed, but he had nothing to lose by leaving the door slightly ajar. “Fine,” he said, “but get it to me promptly.”

Lamont ended with one final appeal. He told the president he had recently met with Pecora, who was seeking information about the firm for his hearings. Lamont was convinced Pecora was on a witch hunt. He asked Roosevelt to consider replacing him or adding a more reasonable lieutenant to his staff.

“You know that men like Jack Morgan, Russell Leffingwell, Parker Gilbert, and George Whitney would cut off their right arm before doing anything wrong. But we’re not infallible; we’ve made mistakes. Don’t put us in City Bank’s class. Don’t make the mistake of breaking Jack’s heart and your own policies at the same time.”

“I get the point, Tom,” Roosevelt said. “I do.”

Lamont mailed a memorandum to the White House four days later.

It was classic Lamont, combining concise arguments for reasonable reforms, such as Glass’s idea of allowing national banks to open local branches, with a heartfelt defense of J.P. Morgan’s unique role, contingent upon its ability to both manage deposits from wealthy clients and devise securities offerings. Bankers of his ilk remained nothing less than unassailable stewards of the national interest. In the three and a half hard years since the crash, the world had a very different view of banks and investment banks. But Lamont hadn’t budged.

A week later, on March 30, Lamont received an unexpected letter from none other than Charles Mitchell about an invoice that J.P. Morgan had sent him seeking interest on the loan it provided him.

“I find myself under extraordinary financial demands at this very moment and my income is sharply reduced,” Mitchell wrote. “May I ask that you accept the enclosed check representing 66⅔ percent payment thereon giving me a reasonable time as to the balance? Your consideration would be greatly appreciated.”

THIRTY-EIGHT

MAY 16, 1933

“The most dramatic show in town is the trial of Charles Mitchell, lately head of America’s largest bank,” wrote columnist Howard Vincent O’Brien. “It is not the trial of a man, but of an era.”

The proceedings opened on May 16 in the musty courtroom of Judge Henry W. Goddard, with a crowd of well-dressed men and women jockeying for seats. Though the case promised no murder, mayhem, or sex, it did feature money, and plenty of it.

The setting, however, was dreary. In contrast to the elegant setting of the Senate hearings, the federal courtroom had cream-colored walls stained by decades of cigarette smoke, their wood trim “blackened with age.” Wrinkled linoleum covered the floors, with “spittoons strategically placed” for the use of jurors and spectators. The twelve jurors sat on “stiff, straight-backed chairs,” the better to keep them awake.

Mitchell’s lawyer, Max D. Steuer, short and balding with closely trimmed gray hair, dressed the part of the flashy criminal defense attorney in a double-breasted powder-blue suit with a pocket square. Mitchell dressed as the epitome of the conservative banker, subdued in bespoke navy.

Prosecutor Medalie had been sick with the flu, delaying the trial from its April start date. Now he presented the government’s opening statement, contending that neither the initial sale of stock by Charles Mitchell to his wife nor their later repurchase were bona fide transactions but were intended “to deceive the government.” The prosecutor also contended that a transfer by Mitchell of 8,500 shares of Anaconda Copper to a lieutenant of Anaconda’s president in 1930 and repurchased five months later was “another device to escape payment of tax on a net income over $700,000.”

When it was Steuer’s turn to provide an opening statement, he told the jury the case wasn’t really about tax fraud at all. He argued the trial was a political exercise. Mitchell, he said, was a “big fish” being brought to trial solely to appease “mob psychology,” as the government sought to find a scapegoat for the crash. “When mob psychology controls, who is then to be made the victim? Some underling?” he asked the jury. “No!” he intoned. “We need big fish. And Charles E. Mitchell was a big fish.”

Steuer portrayed Mitchell as a fiduciary for National City who helped the banking giant avert a financial crash, the extent of which “God alone could foretell.” Steuer said Mitchell sold the stock to his wife instead of disposing of it on the open market to protect the bank.

“Mr. Mitchell never, at any place, at any time, has denied that his purpose in making this transaction [was] so he could deduct it from his income tax, and he never, at any place or time, will deny it,” he told the jury.

“Every man who is an honest and decent citizen uses every possible legal means of reducing the tax he is called upon to pay the government,” Steuer argued. “When a citizen actually suffers a loss, for the purpose of recording the loss, he may sell any security which will record the loss.” Mitchell, Steuer said, was advised by his lawyer that the sale was “bona fide and legal.”

Hoping to gain some sympathy for his client, Steuer declared that Mitchell was now “worse than broke.” Mitchell still owed the House of Morgan almost $6 million on loans secured by collateral now worth only $5 million. “Almost any other man except Mitchell would file a petition of bankruptcy and clear himself of that burden,” Steuer shouted into the overflowing courtroom. “Every scrap he possesses is pledged against that loan and he hasn’t a cent.”

The first witness for the prosecution was National City’s vice president, Edward F. Barrett, a longtime colleague of Mitchell’s, who made his way to the witness stand as Medalie waited for him.

With a large ledger open on his knees, Barrett testified that from 1922 through the crash, Charles Mitchell had helped Elizabeth make a profit of nearly $300,000 in pool stock transactions. In one pool alone, she cleared $35,785.95.

Medalie’s questions were aimed at trying to show that the Mitchells had long been engaged in a variety of unethical trades over many years.

Then came Steuer’s cross-examination.

Steuer quizzed Barrett in an effort to demonstrate that the same facts proved the opposite conclusion: that these transactions were so common that one could hardly suggest there was illegal intent involved. In 1928, well before the crash, Steuer showed that Mrs. Mitchell had made a profit of nearly $200,000 by selling 275 shares of National City stock she had originally bought from Charles. With Charles’s substantial assistance, her inheritance had increased from $250,000 to almost $1 million at the time of the crash.

Then the questions turned toward the days in December of 1929 when Mitchell raised the prospect of selling his shares to his wife for $212 a share.

“On the 20th of December, 1929, could you conceive that National City stock, did it ever occur to you in the remotest degree that National City stock would go below $212?” Steuer asked Barrett, citing the date of the sale.

“No, sir.”

“Isn’t it a fact that about that time employees of the bank petitioned to be allowed to buy the stock at $212?”

Barrett nodded and testified that at the time of the sale, Mitchell told him that he thought Mrs. Mitchell would make a handsome profit on the stock and recoup some of the losses she had sustained since the crash.

Medalie, on redirect, homed in on the fact that the interest on the stock Elizabeth purchased from her husband, which she was expected to pay, would total $190,000 per year. But neither Mitchell nor Barrett had warned her of that.

“In order to show the unreality of this transaction,” Medalie told the judge, “I am asking this witness everything to establish its unreality. Here is an investment banker in charge of this lady’s account passing by something which no investment banker would permit his client to embark on without the direst warning.”

On a Monday morning, after eight days of back-and-forth about accounting, the trial finally promised some real drama as the prosecution rested its case and Steuer prepared to mount Mitchell’s defense.

The spectators and press got to the court early that morning: Charles and Elizabeth were scheduled to take the witness stand.

Elizabeth, wearing a blue suit and pearl necklace, sat behind the rail with her husband as the prosecution wrapped up its case, waiting to begin her testimony. She stood up to be sworn in but then, in a moment of seeming confusion, she was asked to sit down next to the stenographer as the lawyers debated with Judge Goddard about whether she should be allowed to testify. After a lengthy battle between Medalie and Steuer, Judge Goddard barred her from taking the stand, citing a Supreme Court decision that said the wife of a defendant in a criminal case could not testify. Steuer protested. When the judge stood firm on his ruling, Elizabeth left silently, pausing to clasp her husband’s hand.

After lunch, Mitchell finally took the stand, looking directly at the jury, interlocking his fingers on his lap. Wearing a dark blue suit with a white pocket square and occasionally using his index finger for effect, he contended that his decision to sell the shares to his wife was completely legal.

Leaning forward, he testified in an “earnest, husky voice” that he sold the shares to his wife to record the loss because he “couldn’t throw it into the market without causing a drop of $150 a share.”

Sitting in the witness chair, Mitchell rocked back and forth, turning his body from the lawyers to the jury and back again. For their part, the jurors sat perched on their chairs intently focused on his every word.

Mitchell, who answered the questions with a rapidity that suggested a sense of confidence, also defended omitting monies received from the management fund from his income tax filing because he did not consider them income, but as an advance that would have to be repaid.

“There was not a man” among the eleven officers who participated in the management fund, he said, “who would have raised a question that the money could not be paid back out of future earnings of the fund,” and the directors’ legal counsel advised them the money should not be included on their income tax return.

As his testimony returned to the sale of the National City stock to his wife, Mitchell added a new twist.

“I had, of course, expected the National City Company would relieve me of the shares,” he said, explaining that he always expected the stock would rebound and that he would sell it back to the bank. “[But] as I saw the market continue to go down…I realized my reliance on the National City Company was not to be well-founded from that point on. In other words, I clearly realized that the stock was very definitely mine.

“My loss on those 18,300 shares was equal to or in excess of my entire income for the year. I began to consider selling that stock to record my loss and show the real situation, so far as my income was concerned.

“I considered selling it to the market, but 18,300 shares would have been a considerable amount for the market to absorb. Furthermore, a group of the employees had asked to be allowed to buy some of the bank stock.

“Their petition had been considered and they had been permitted to subscribe $200 a share and were to be carried over two- to four-year periods. Officers were permitted to subscribe at $220 a share. Here was our entire organization stepping in eager to buy stock.

“I believed in that stock, as firmly as the employees did. I went home on December 19 and talked to Mrs. Mitchell about it.

“She did not have sufficient cash or means to buy those shares. She knew it and I knew it.

“She had an enthusiasm regarding the National City Bank shares. Mrs. Mitchell was surrounded almost from day to day by my associates, by directors of the bank, by officers of the National City Bank…She was an enthusiast about it.”

Mitchell agreed to sell it if he could legally record his loss for income tax purposes and said he got his lawyer Harry Forbes to sign off on it.

“Mr. Forbes finally told me it was entirely proper to make the sale and the loss could be registered on my income tax report,” Mitchell told the jury.

As National City continued to fall in value, he turned over insurance premiums and other money to his wife to buffer her losses, and he later repurchased the stock he sold her, “because it was a nightmare to me to think that the transaction was in any way resulting in eating into the corpus of her estate.” He described the “embarrassing position” in which he found himself, still owing $6 million to J.P. Morgan. The stock he posted as collateral was no longer worth anything close to that.

“In October 1931, do you recall whether you had delivered to J.P. Morgan & Co., as collateral all the stocks you had?” asked Steuer.

“I still had some odds and ends in my box—stock that wasn’t worth putting up.”

“Did you execute mortgages on your real estate in favor of J.P. Morgan?”

“Yes, in March 1931.”

“So by March 1931, you had deposited behind that loan practically everything you had?”

“Yes, sir.”

“Did you ever get anything back on any of that stock?”

“No, sir.”

Mitchell said he ultimately discussed his personal financial mess with several colleagues at the bank.

“I told them that I was under great embarrassment as head of the National City Bank with having an under-margined loan with J.P. Morgan & Co. I told them I thought that considering the circumstances under which the loan was obtained, I thought the company owed me some obligation in the matter and asked them to give it their consideration.”

But he felt as if he could not press his claim against National City Bank “because I had given myself so freely to them that it would be like making a claim against one’s own mother.”

“Later, Mr. Swaine [Robert T., his attorney] advised me that my best course would be to repurchase the stock from Mrs. Mitchell and he sent to my office drafts of the letters to be exchanged between Mrs. Mitchell and myself,” Mitchell explained.

“I’d ask him where to sign it, see that my signature was witnessed, and that was all.”

The letters quickly became known as “Dear Charles” and “Dear Elizabeth” letters.

Mitchell’s testimony ended on June 9, and his brother-in-law Joseph Rend, a wealthy coal dealer, took the stand soon after. He testified that he had seen his sister Elizabeth at the Drake Hotel in Chicago on November 12 and 13, 1929. “I told her I thought she ought to buy some National City Bank stock, five thousand or ten thousand shares. And I offered to finance her.”

“How much were you worth then?”

“About ten million dollars.”

Rend again urged her in December 1929 to buy the stock. He had purchased seventeen thousand shares and planned to buy an additional three thousand.

“The next time I talked with her about the National City Bank stock was in the fall of 1930. She told me she was deeply worried, that she had purchased a very considerable amount of National City Bank stock and had suffered severe losses. I was very much embarrassed because I had suggested that she buy it.”

When it finally came time for closing arguments, Mitchell’s lawyer turned to the jury and asked them to put themselves in his shoes.

“There isn’t anybody who can so read the law as to say that no matter how a man may acquire stock, he may not sell it to record a loss on his income tax return, provided there is an actual sale and an actual loss,” Steuer argued.

“Suppose he had sold any of you the stock instead of Mrs. Mitchell,” Steuer said. “You’d have been the sufferers as the stock went down instead of himself and Mrs. Mitchell. But would the government have received one cent more?”

The answer, he said, was no.

When it was Medalie’s turn to address the jury, he took a decidedly more argumentative approach. Raising his voice, he dismissed Mitchell’s claims of sacrificing his own fortune to aid the National City Company as “sanctimonious rubbish.”

“It was a terrific hoax!” Medalie shouted. “Since they have brought in this sanctity, it is incumbent upon me to remove it from the case in order that you may not go to your deliberations thinking he is the public benefactor he would have you believe.”

Medalie indignantly decried Steuer’s charge that Mitchell had been singled out for trial as a symbol of Wall Street.

“The people have as much a right to expect that such men shall be prosecuted if they betray their trust as a fraudulent merchant or a little bank teller,” Medalie said. “And when one among those in high places betrays his trust it does not lie in his mouth, or he that represents him, either morally or in the spirit of sportsmanship, to say he is singled out for dastardly persecution.

“Let him face the music like a man, and not complain.”

THIRTY-NINE

MAY 22, 1933

In the final days of May, while the country followed Charles Mitchell’s trial with rapt attention, Carter Glass received a startling directive from the White House. Roosevelt, he was told, was so enamored with Winthrop Aldrich’s plan to force the separation of banks and investment banks without any exceptions that the president asked the banker to write part of Glass’s bill. Glass was asked to insert Aldrich’s language directly into the bill that carried his name.

Glass was beside himself. The major reform that he had worked on for years, he believed, was now being co-opted by the leader of the nation’s biggest bank in an effort to stick it to J.P. Morgan.

“I was rather surprised when Aldrich, who recently left the law to look after the banking interests of his brother-in-law, John D. Rockefeller Jr., after doing all he could to kill the Glass Bill, suddenly reversed himself, and concluded he must give up his affiliate,” Glass later wrote to his friend Leffingwell, who of course was also a partner at J.P. Morgan.

Glass told Leffingwell that section 32 of the bill was “entirely drafted by Mr. Aldrich” and “incorporated upon urgent Administration request.”

Glass, beyond frustrated, explained how he had tried to block its inclusion but failed to persuade Roosevelt.

“I talked to the White House with a view” to explain the dangers of such an approach. “Much to my astonishment,” he said, the president “indicated his pronounced opinion that the provisions in question should be incorporated in the bill. I think the validity of these provisions is subject to grave question.”

The private machinations between Roosevelt and Aldrich about a more expansive separation of investment and commercial banking in the Glass bill soon became an open secret.

“This is not the first indication that Mr. Rockefeller and Mr. Roosevelt enjoy sticking pins in Mr. Morgan,” wrote the syndicated columnist Paul Mallon. The concept that “Senator Glass must have thought up the brilliant idea one rainy afternoon when he had nothing else to do” is “not the case,” he wrote. “It came from no less a worthy opponent of Morgan than John D. Rockefeller Jr. himself.” The columnist scoffed at the idea that an industry-wide forced divorce of all investment banks from commercial banks was original to Aldrich. “If there is anyone who thinks Mr. Aldrich would act in a matter…without consulting Mr. Rockefeller, he does not know Mr. Aldrich or Mr. Rockefeller. They are two persons with a single thought—Mr. Rockefellers.”

Glass’s annoyance with Aldrich notwithstanding, he nonetheless felt that he was making progress. As the bill continued to gain support, Wall Street was in a full-on meltdown about the prospect of it becoming law.

Francis Sisson, president of the American Bankers Association, began a public campaign against the bill as it made its way through the Senate.

“So far as our commercial banking system is concerned, there is no phase of the investment banking business, in my opinion, that cannot be satisfactorily corrected by regulation and publicity, without recourse to a program of destruction and confusion,” he said. “That reforms are needed is clear, but I fail to see how we shall strengthen our commercial banks by putting beyond their reach and influence a field of activity that has been an integral part of banking from its very beginning and that dovetails intimately with commercial banking activities in many ways.”

But the country had tuned out bank executives and their lobbyists. Instead, America was ready to support banking reform.

Even the wife of the Fed chairman, Agnes Meyer, now believed the bankers with whom her husband interacted were practically criminals: “Certainly the New York bankers have proved they are no heroes. The wealthy classes as I have learned to know them through the depression are not much to be admired. They are overcome by fear and selfishness,” she wrote in her diary. And that wasn’t all: “If the general public realized the ignorance, smallness, futility and greed of the average New York banker, I think they would certainly hang a few of them, beginning I hope with Charlie Mitchell.”

Ever since declining the Treasury post, Glass had been feeling increasingly defensive in his dealings with Roosevelt. On the campaign trail, the president had made it abundantly clear that he stood with “sound money” stalwarts like Glass, men who believed in the gold standard as a safeguard against the evils of inflation. But his presidency was barely a few days old before Roosevelt began chipping away at it. First came a temporary gold embargo. Then, in April, he stunned a gathering of his economic advisors by almost giddily declaring his intention to support an amendment to an agricultural bill that gave him power to expand the money supply and reinflate crop prices. The United States was off the gold standard.

As three of his advisors continued to discuss the move late that night, one declared, “Well, this is the end of Western civilization.”

That was how Glass was starting to feel, too. A month later, when the administration publicly clarified the details of that amendment, which removed the government’s obligation to repay bondholders in gold, Glass went ballistic. “The proposal to repudiate all outstanding gold contracts is unconstitutional and the courts will so hold if there is any integrity left in the courts with regard to the sanctity of contracts,” he said. “It is utterly worthless to enact this legislation with 40 percent of the world’s gold in the United States.”

As usual, Glass was making the argument for embracing the traditional values that he believed made the country honorable and great. The fact that Roosevelt was reneging on campaign promises enraged him. But the president had come to understand the gold standard as a constraint on his power, and he wasn’t going to be held to it, even if it meant leaving an important ally like Glass howling in the wind.

Having conceded that Aldrich’s section would be part of the bill, Glass had one more major hurdle to clear. Representative Steagall, who co-authored the first bank bill Glass put together in the aftermath of the crash, continued to insist that the government provide an ironclad guarantee of bank deposits. If you want to stop bank runs, Steagall said, this was the only way to do it, with the government as the ultimate backstop.

“Telegrams are coming in from coast to coast in support of a guarantee bank deposit law,” Steagall told the press, hoping to gain the attention of Roosevelt.

Glass had always been adamantly opposed to the concept, as had Roosevelt. Roosevelt’s objection was that “the use of the word ‘guarantee’ with respect to bank deposits is that you guarantee bad banks as well as good banks. The minute the government starts to do that, the government runs into a probable loss.”

After the Panic of 1907, eight states had enacted some form of deposit guarantees. It hadn’t worked. Most of the banks with deposit insurance failed in the agriculture crash of 1921, and none were still functional in 1929. Major banks seized on this poor track record as evidence of the inadequacy of the policy. To their way of thinking, it subsidized small, weak institutions at the expense of stronger, well-managed ones, and created a moral hazard—the idea that people or institutions will take greater risks if they’re insulated from the consequences. If customers’ funds were guaranteed regardless of where they put them, what was the incentive for choosing a reputable bank?

The public, however, was deeply frightened by the prospect of bank runs and wanted them to end. If guaranteeing deposits was what it took, so be it. This had become the overwhelming popular view, and neither Glass nor Roosevelt could afford to ignore it.

In April, Glass added a deposit guarantee to his bill that would be voluntary and was mostly palatable to the big banks. In the House, however, Steagall was championing a bill that contained a much more expansive guarantee, which was overwhelmingly preferred by his rural constituency. Rural Americans had seen enough of their life savings vanish. Steagall’s version sailed through the House by an overwhelming margin of 262 to 19.

Glass and Steagall, who had been seen as allies, had actually been engaged in a hard-fought battle that the press was only beginning to identify. So far, the two men had managed to keep their disagreement under wraps. But The Wiregrass Farmer, one of Steagall’s home-state newspapers, broke the news about the long-running “feud” that was “just now becoming apparent.” Though there had been “no public hair-pullings” and the men had scrupulously avoided “mention[ing] each other’s names in their speeches,” the paper reported, their mutual enmity “has been nonetheless deep and bitter.”

The paper added that the fact their names ended up side by side on the same bill meant nothing. They had very different views on banking. Glass’s “bill would have ‘rearranged the furniture somewhat,’ ” the newspaper said, “while the [Steagall’s] bill would more or less have reconstructed the whole banking edifice.”

Hell-bent on minimizing deposit guarantees, Glass found himself with an unlikely ally—Aldrich. As the chief executive of Chase, one of the strongest banks in the nation, Aldrich had no incentive to favor a plan that would protect his smaller rivals. If anything, he hoped they’d fail so Chase could get even bigger.

The Steagall plan, which Glass reluctantly signed on to, called for the creation of a federal deposit insurance corporation. It would be funded by the nation’s banks themselves, which would pay into it; the insurance premiums would be used to protect the first $2,500 of deposits for customers with accounts at failing banks.

An unhappy Aldrich went back to Roosevelt in an effort to get that part of the bill removed.

“At my interview with you last Wednesday, I expressed the concern which I felt as to the unfortunate consequences which would ensue if the bank deposit insurance provisions contained in the latest draft of the Glass Bill were enacted into law,” Aldrich wrote to the president. “Even if you should take the view that provision for permanent bank deposit insurance is necessary, I still feel very strongly that the whole scheme may be jeopardized unless certain changes are made in the provisions of the present Glass Bill. I have, therefore, taken the liberty of writing you to suggest certain specific amendments to the provisions of the Glass Bill relating to this subject, the general purpose of which is to lessen the burden of the insurance provisions on the banking structure of the country by passing some of the load on to the depositors.”

Roosevelt was still very much against the idea of deposit guarantees. But he was also a political animal who understood the political popularity of such a guarantee. His own vice president, John Nance Garner, the Senate’s presiding officer, had worked with Republican senator Arthur Vandenberg of Michigan to add an even stronger version of a deposit insurance provision in Glass’s Senate bill. If Roosevelt were to veto it, Vandenberg looked like he had enough votes to override it.

So Glass now had to play a waiting game—waiting for Roosevelt to make up his mind about the future of his bill.

He got some help from the popular actor Will Rogers, in a letter published by The New York Times on May 20:

Carter Glass, who knows more about money than any man in America, talked in the Senate today on his new bank bill. It protects deposits and makes bankers responsible to each other. In other words, he wants to set a banker to watch a banker, instead of leaving it to the depositor to try. He also stops banks from racketeering in trusts and holding companies. It really sounds too good to pass.

FORTY

MAY 23, 1933

On May 23, 1933, Thomas Lamont stepped into the Senate Caucus Room just behind Jack Morgan and his bodyguards, exuding the kind of self-assurance that had once been common among Wall Street titans—but had all but vanished amid the intense scrutiny of the Pecora hearings. J.P. Morgan had brought so many people to Washington that they filled five floors of the Carlton Hotel, spending a total of $2,000 a night.

The hearings had been ongoing for more than a year, and Pecora was finally training his sights on the House of Morgan. The hearing room was packed with reporters, and as flashbulbs popped, spectators competed to get a better look at the sixty-six-year-old Morgan, who was rarely seen in public. Unlike his famous father, with his wild eyebrows, disfigured nose, and intense scowl, Jack presented a benign affect: tall and robust, white mustache, benevolent smile, and quiet confidence.

Lamont, too, looked healthy and vigorous. If anything, his reputation had been enhanced by the events of October 1929. In 1932, syndicated columnist Drew Pearson called Lamont one of the “super lobbyists” of Washington, among the few for whom “the door of the White House, of every Cabinet office, always is open. They advise and they are listened to.” But this was not entirely meant as praise. Pearson added, “But it is exactly this that makes their influence so powerful, their position so dangerous.”

Prior to the hearing, Pecora had met privately with Lamont, outlining the documents he required from the Morgan bank. It did not go well. Lamont asked him to submit questions in writing; he sent them twenty-three questions; they answered fifteen. He received a “chilly” response when he asked to examine the bank’s internal records for the last five years.

In Morgan’s magnetic presence, the diminutive Pecora suddenly appeared as David facing Goliath. That did not bother Pecora. As The New Yorker’s John Brooks would later describe him, Pecora was “three-quarters righteous tribune of the people, one-quarter demagogic inquisitor.”

One thing that Pecora had mastered during his years in the courtroom was a knack for seizing on certain details that made his targets look utterly guilty and disreputable, even if they turned out to be perfectly legal under closer examination. A private investment bank like the House of Morgan, with all its intricate layers of distinguished clients, partners, directorships, and political allies, was an especially inviting target. If Pecora could reveal even a few of the secrets inside this closed society, the American public was sure to be appalled, even if none of it was against the law.

Pecora watched the Morgan men enter the room. It was a surreal moment for him: As a young law clerk working in an office catty-corner to the Morgan bank, he would sometimes catch a glimpse of the legendary J. Pierpont. Now he was the firm’s avowed adversary. Pecora had spent months preparing, closely studying the transcripts of the elder Morgan’s testimony in the 1912 Pujo hearings.

Jack Morgan, who maintained that he was semiretired, had also been prepped. Just as Lamont had coached his father two decades earlier before the Pujo hearings, Morgan’s lawyer John Davis had spent three months coaching all of the firm’s executives who had been subpoenaed. Davis read the Pujo testimony as well and counseled the Morgan men to avoid the impression of arrogance that Jack’s father had left in the public mind.

“I lined up the partners and held school every day,” Davis explained. A more private person than his father, Jack Morgan had little patience for Pecora, privately referring to him as a “dirty little wop.” As a man who had been educated and trained in Victorian England, and who had worked for a time in London at Morgan, Grenfell & Co., J.P. Morgan’s British subsidiary, Morgan seemed almost an antiquated figure—dignified but stuffy. He genuinely believed the House of Morgan was above reproach, confiding to a friend: “The risk of finding anything crooked in our affairs, honestly looked at, is nil; but it is taking a large part of the time of all the partners, and one whole firm of lawyers, to go through all the bank history and get ready to answer” what he referred to as the “Spanish Inquisition.”

Lamont, who saw the hearings as a cynical ploy “designed to acquaint a curiosity-loving public with the nature and extent of our own banking institutions,” was worried about how his son Tom, who had also been subpoenaed, would be treated by Pecora.

Though still spectacularly rich by any standard—Lamont alone had $20 million in his partnership account—the men of Morgan no longer felt immune from the hardship that had afflicted most of the country. Paychecks of junior partners were drastically cut, and the firm’s lavish dining room for employees was closed.

Partners felt compelled to curtail their own lifestyles less because they couldn’t afford it than because of how it appeared. Morgan reluctantly kept his new yacht, the Corsair IV, in dry dock. Still, certain habits were hard to break. When the Lamonts took a vacation on an Aegean cruise with old friends, including Walter Lippmann and his wife, they arrived in Greece with forty-two pieces of luggage.

On his first day before the Senate committee, Jack Morgan made an opening statement that summarized what might be called the “Morgan Ethos.”

“The private banker is a member of a profession which has been practiced since the Middle Ages. In the process of time there has grown up a code of professional ethics and customs, on the observance of which depend his reputation, his force and his usefulness to the community in which he works…if in the exercise of his profession, the private banker disregards this code, which could never be expressed in any legislation, but has a force far greater than any law, he will sacrifice his credit. This credit is his most valuable possession; it is the result of years of faith and honorable dealing and while it may be quickly lost, once lost cannot be restored for a long time, if ever.”

As Morgan spoke, Pecora gently twirled a pencil between his fingers.

Then Pecora began his questioning of Morgan, who responded a bit nervously at first to his inquisitor, even calling him “Sir.” At one point, Morgan stopped mid-sentence: “I should like it if the stuttering part were cut out of my answer to that question. I am not used to this form of examination, Mr. Pecora, and I do not get my words quite straight always.”

Pecora pressed him on the various boards of directors Morgan employees sat on and how it decided to whom the firm lent money. Morgan insisted he saw nothing wrong with the firm’s partners having seats on the boards of various banks or corporations, or with making loans to insiders such as Mitchell.

“They are friends of ours, and we know that they are good, sound, straight fellows,” Morgan said.

Pecora requested a copy of the bank’s partnership agreement, hoping to read it aloud. He knew Morgan would vehemently protest—and he did. So did Davis. That was entirely too private, they insisted—and to what purpose could it be put for the investigation? Pecora won the argument, but spectators were asked to clear the room.

In the closed session, Pecora made a show of unrolling a parchment scroll that had been kept secret; many of the firm’s longtime partners had never laid eyes on it. “It was like asking Morgan & Co. to bare its soul,” Pecora later said.

The elaborately hand-lettered document granted almost godlike powers to Jack Morgan as the bank’s president and chairman of the board. He and he alone determined disbursements from the partnership pool. He arbitrated disputes and if he deemed necessary could actually dissolve the firm. And then there were the rules about how the House of Morgan was to interact with the public: The bank was not allowed to advertise its services, nor solicit deposits from customers, and it would only pay interest to clients with accounts that held more than $7,500. It had no board of directors or shareholders. New partners were not required to deposit money for the privilege of joining the firm, as was the case at most other private partnerships on Wall Street. There was to be no sign on its outer door indicating that it was a bank, but only the name “J.P. Morgan” on its inner door.

To Morgan, disclosing this information was beneath him, and under his breath he described Pecora as having “the manners of a prosecuting attorney who is trying to convict a horse thief.” He had an even less flattering view of the senators—he told his lawyer that they reminded him of “sex-suppressed old maids who think everybody is trying to seduce them.”

Senator Duncan Fletcher, a Florida Democrat who had replaced Norbeck as chairman of the committee, quizzed Morgan on his insistence that the firm was different from other banks because its clients were carefully selected for their integrity based on long-standing relationships—and not simply wealthy customers whose money J.P. Morgan wanted to invest.

“I suppose if I went there, even though I had never seen any member of the firm, and had one hundred thousand dollars I wanted to leave with the bank, you would take it in, wouldn’t you?” Fletcher asked.

MORGAN: “No, we should not do it.”

FLETCHER: “You would not?”

MORGAN: “No.”

“Not unless you came in with some introduction, Senator,” Morgan told him. “That has been the rule for many, many years.”

Those with introductions and assets were indeed graciously welcomed. Pecora listed the clients that maintained $1 million balances at the House of Morgan, including AT&T, Celanese, DuPont, General Electric, General Mills, ITT, Montgomery Ward, Standard Oil of New Jersey, Texas Gulf Sulphur, and U.S. Steel.

Despite his desire for secrecy, Morgan testified that the deposit accounts of J.P. Morgan on December 31, 1932, totaled $340 million, while the firm’s capital or net worth stood at “$53,194,000 and odd.”

As Morgan’s testimony continued, it was revealed that J.P. Morgan was exempt from examination by the New York banking authorities.

Morgan explained that his firm was exempt because it was not a traditional bank.

“Well, we do not like the little deposit accounts, with many drawings and that sort of thing, because they are simply an expense without any return. We discourage them all we can,” he said.

But all the discussion about the way the House of Morgan worked was a subplot once Pecora dropped a bombshell: Jack Morgan had paid no U.S. income taxes in 1931 and 1932. As Pecora revealed that Morgan had erased his entire tax liability, Morgan shifted in his chair, sweat trickling down his face and chin. And it wasn’t just Morgan who took sizable write-offs for stock losses: Of the twenty Morgan partners, not one had paid income taxes in 1931 and 1932. The strategy had been cleared by their lawyers and accountants, of course, but in response to a question from Glass, it was disclosed that the Internal Revenue Service had not closely examined their returns, perhaps in deference, perhaps in fear.

“I might point out that they also examined Mr. Charles Mitchell’s income tax return,” Couzens sniped back at Glass.

Responding to the stunning tax testimony, reporters, photographers, and spectators jostled to get a better view, while senators strained to hear the soft-spoken Morgan. For his part, Morgan tried to stay relaxed, joking with the security guards about whether they carried guns to protect themselves from the senators.

Lamont’s son Tom found himself under fire, too, coming in for condemnation when it was shown that, like Mitchell, he had participated in a “wash sale,” selling underwater stocks to his wife and taking a tax write-off of $114,000, only to buy the shares back three months later.

But the real fireworks came from Senator Glass, after several days of hearings. Bitter that the hearings were becoming a spectacle that could distract from his banking bill, Glass reproached Pecora, whom he criticized for keeping the committee in the dark about his plan to take on J.P. Morgan. He said the entire hearing had become a “Roman holiday.”

A furious Pecora practically threatened to quit. “I want to assure Senator Glass that the compensation of $255 which I am receiving for these services certainly is no incentive to me to render these services or to continue to render them.”

Glass interjected.

“Oh yes. That is what it is all about. I do not intend to see any injustice done to the House of Morgan,” he said. “We are having a circus, and the only things lacking now are peanuts and colored lemonade.”

The hearing was turning into a disaster for the House of Morgan—and it wasn’t helping Carter Glass’s reputation, either. The senator who prided himself on holding Wall Street’s feet to the fire was starting to sound suspiciously like its apologist.

“Senator Glass almost wrecked the investigation,” observed the syndicated columnist Heywood Broun. “I am afraid that his obstructionist tactics were based on almost the worst possible motives. I will readily grant that the veteran senator from Virginia is not a partisan or a beneficiary of the House of Morgan. But he is an arch and passionate preserver of the ego of Carter Glass. To put it bluntly, he was jealous of Ferdinand Pecora.”

Rumors had swirled for months that Glass had been subtly protecting J.P. Morgan. Now the hearing was confirming the gossip. Under pressure from Roosevelt, Glass had allowed Aldrich’s unequivocal bank-breakup language—which was aimed right at the House of Morgan—to be included in his bill. But he still couldn’t stomach the idea that the one firm he thought was honest was now being impugned. Pecora, in his view, was driven by a lust for headlines, which played right into the hands of the Rockefellers.

When a voter in Virginia criticized Glass about his seeming defense of Morgan, he wrote back: “Dear Sir—I am wasting a three-cent stamp to say I always disregard the insults of a blackguard, particularly when they come from a distance.”

From that point forward, though, Glass kept relatively quiet for the remainder of the hearings. After all, the bill he’d spent years championing and that bore his name was finally within reach, and he couldn’t risk jeopardizing it by speaking his mind. For once, the senior senator from Virginia held his tongue.

When the hearings resumed on a Thursday morning, Morgan and his entourage returned to the Senate Caucus Room, amid swirling headlines that characterized the House of Morgan as a haven for tax scofflaws. As he entered the hearing room, Morgan was approached by a reporter named Ray Tucker, who wanted to introduce him to someone.

“Mr. Morgan, this is Miss Graf,” Tucker said. “She works for the circus.”

A bit taken aback, Morgan leaned down from his height of six feet, two inches and with his usual dignity shook the hand of Lya Graf, a woman who stood only a little over two feet tall. As flashbulbs fired, Charles Leef, the PR man for the circus who had the clever idea to bring her to the hearings after Glass’s “circus” comment, scooped up Miss Graf. He placed her in Morgan’s lap just as he took his seat. “The smallest lady in the world wants to meet the richest man in the world,” Leef announced.

“I have a grandson bigger than you,” Jack said, thinking at first that she was a child.

“But I’m older,” Graf replied, in a high-pitched voice.

“How old are you?” he asked in a friendly, even tender tone.

“Thirty-two,” the press agent interrupted.

“I’m not,” Miss Graf said. “Only twenty.”

“Well, you certainly don’t look it,” Jack said.

Lamont looked on in annoyance as Richard Whitney waved the circus duo away. As the senators filed in, everyone agreed that it had been a crass stunt. The committee’s chairman, Senator Duncan Fletcher, pleaded with the press not to print the pictures. The New York Times was one of the few newspapers to comply. The Baltimore Sun ran a cartoon with a tiny Uncle Sam sitting in Jack Morgan’s lap, over the caption “A Midget Gets a Thrill.”

With the Morgan men back at the witness table, Ferdinand Pecora turned his questioning to the letters that Lamont, George Whitney, and other Morgan partners had sent to some of the most prominent individuals in the nation in the days and hours before Lamont left on the Aquitania for Europe to begin the reparations negotiations in February of 1929. As he spoke, Pecora held a cigar that he sometimes waved around to punctuate his points. To the senators, the letters, offering stock in Alleghany Corporation and Standard Brands at prices far below the market, were nothing more than bribes.

Several committee members alleged that the House of Morgan played politics by offering discounted stock to people like John Raskob, the former Democratic National Committee chairman. Raskob’s letter to Morgan partner George Whitney seemed to confirm he understood the nature of the gift and the possibility of a quid pro quo. “Many thanks for your trouble and for so kindly remembering me. My check for $40,000 is enclosed herewith in payment for the Alleghany stock…I appreciate deeply the many courtesies shown me by you and your partners, and I sincerely hope the future holds opportunities for me to reciprocate.”

Pecora asked Whitney what Raskob meant about “opportunities for me to reciprocate.”

“I thought it was just a nice, polite letter,” Whitney responded, pointing out that he and Raskob had been fellow directors at GM. Jack Morgan calmly watched Whitney’s testimony, at times even napping; Whitney smoked a cigarette as he spoke.

Lamont, however, was outraged at the suggestion that the House of Morgan would ever attempt to buy favor.

Pecora countered with another damning document, a memo written by Lamont himself in February 1929 to partner Arthur Anderson.

“It occurred to me this morning to make inquiry from you whether in our distribution of Alleghany common we had allotted anything to Frederick Strauss. He was so exceedingly helpful and at considerable sacrifice to himself in going over to Washington to testify in the matter of the stock issues, that I am not at all sure that we ought not try to do something for him even at a date as late as this.”

Most of Morgan’s favored group sold the Alleghany shares quickly—or wished they had. By 1933 it was trading at a dollar or two a share.

Pecora introduced a copy of Whitney’s tax return for 1929, which showed that he had purchased 8,145 shares of Alleghany stock at a cost of $162,900, which he later sold for $392,311.32, for a profit of $229,411.32. Whitney professed to have no memory of the transaction.

Whitney, typically as poised as Lamont, became flustered under questioning.

“I don’t know, Senator Couzens,” he said in response to a question. “It is hard to say why we did things. It is even harder to say why we didn’t.”

Just as he had done with Mitchell, Pecora skillfully flipped the public perception of Morgan by doing little more than exposing their standard business practices.

The New York Times took note of the gambling and influence peddling on Wall Street and pinned it on the mighty men of Morgan: “Here was a firm of bankers, perhaps the most famous and powerful in the whole world, which was certainly under no necessity of practicing the small arts of petty traders. Yet it failed under a test of its pride and prestige.”

Distressed by the criticism, Lamont pleaded with Adolph Ochs, publisher of The New York Times, to understand the firm’s fundamentally good intentions. “We naturally turned in part to individuals who had ample means and who understand the nature of common stock—men who are prepared to take a chance with their money,” he wrote in a private letter to Ochs.

Lamont’s close friend Walter Lippmann felt as if he’d been fooled and blasted Morgan for its “monopoly” powers, effectively ending his relationship with Lamont, who was stung by the criticism.

“What undoubtedly upset me most,” Lamont wrote in an internal memo, “was the thought that one of my most intimate friends would readily undertake public criticism before even the so-called evidence was half in, and without making the slightest attempt to clear up points with us that seemed puzzling or open to question.”

Lamont appeared again before the committee seven days later to be questioned about how Morgan wielded its influence through the many corporate boards its partners served on, as well as those of banks—the “interlocking” theory of power first enunciated by lawyer Samuel Untermyer in the Pujo hearings.

“I feel that there is a very strong popular delusion which has been nourished…by people insincerely,” argued Lamont, who himself sat on ten corporate boards. “It just isn’t so…We are credited with having what is known as power or influence; and we admit and are glad to admit that we hope that our counsels are of some avail in certain directions in sound finance. What is that derived from? Is it derived from money? Has the Morgan fortune ever been known as one of the great fortunes of this country? No. With all due respect to Mr. Morgan and his father, it has not been so known.” He insisted that directors were invited to serve on boards “to serve the community.”

Just as Pecora was completing the hearings, Jack Morgan requested that he make a final “brief statement upon certain points we believe are not yet fully clear, and then I will turn this in and enter it on the record.” It was a three-page essay contending that separating securities underwriting from traditional banking would cause irreparable harm to the financial sector and eliminate jobs. But there was little vigor or defiance in his voice. He sounded as if he had already accepted defeat. The House of Morgan knew that the game was over.

FORTY-ONE

JUNE 16, 1933

On the morning of Friday, June 16, 1933, Senator Carter Glass stood in the anteroom to the Oval Office. He had been invited to the White House for what would be the most consequential moment of his life in public office.

Roosevelt was getting ready to leave Washington to vacation in Maine on his yacht, stopping first in Boston. But before his departure, he was finally ready to sign a bevy of bills, including the second Glass–Steagall Act, which would finally separate commercial and investment banking. Roosevelt described it as “the best piece of banking legislation since the Reserve Board Act.” That, of course, was the other monumental achievement of Glass’s career, some twenty years earlier.

It was the end of a long road. Until recently, Glass had reason to doubt he would ever get there, complaining to friends that the president “never even lifted one little finger” to help the legislation. The ongoing trial of Charles Mitchell and the Pecora hearings had given the Glass–Steagall bill some much-needed political momentum.

As Glass made his way into the Oval Office and gathered around Roosevelt’s desk, the president, who would sign three other major bills that morning, took particular pleasure in congratulating Glass on his new law.

“You old warrior!” the president declared, as they beamed for the photographers snapping pictures.

The bill managed to scrape through, in part, because Congress stayed in session to deal with a mounting debate over whether the government should pay veterans of World War I the same amount they had been originally granted now that the nation was in economic turmoil. Glass’s bill was passed as that battle played out.

“If it had not been for the veterans,” Roosevelt told Glass, “Congress would have adjourned last Saturday and you would not have had your pet measure on the statute books.”

At exactly 11:15 a.m., Roosevelt brought out specially earmarked gold pens and signed the bill. Glass smiled and said that although the experience had nearly put him back in the hospital, he would do it all over again, if he had to. It was the crowning achievement of his career.

“This bill has more lives than a cat,” said Roosevelt. “A cat has nine lives. This bill was killed fourteen times.”

Glass was handed one of the pens used to sign the bill and caressed it.

By the end of the bill signing ceremony, Roosevelt said, “I’m getting writer’s cramp,” with a laugh. “I have signed more important bills here in about a half an hour than any president has signed in a year.”

The passage of Glass–Steagall into law made it official—Wall Street was never going back to the good old days. Within two years, banks and investment banks would have to be split into separate companies. There would be no carve-out for J.P. Morgan. Bank deposits would be insured up to $2,500. Between the new Glass–Steagall law and Mitchell’s ongoing trial—with his conviction a forgone conclusion—bankers would have to clean up their act.

When the bill was in its late stages, its passage still not assured, Glass had written to his friend Leffingwell at J.P. Morgan, giving him a sense of the toll it was taking on his life.

“I have been utterly unable to give one particle of attention to personal correspondence, pending consideration of administration measures and the so-called Glass bank bill,” he said, explaining that he had also been ill. “I have not been in a position to communicate the alterations which have been made,” he wrote, suggesting he had kept them from Leffingwell to maintain the confidential nature of the discussions. Now that the bill was public, he was able to finally explain his thinking.

Leffingwell, understanding that public sentiment had shifted against Wall Street, replied: “There is so much hunger and distress that it is only too natural for the people to blame the bankers and to visit their wrath on the greatest name in American banking.”

The bill and Glass’s ascendance in the public discourse was considered such a significant capstone of Glass’s career that his hometown of Lynchburg, Virginia, planned to hold a “Carter Glass Day.” Glass, ever the curmudgeon, turned the honor down.

FORTY-TWO

JUNE 21, 1933

After nearly six weeks of testimony, the jurors in the United States v. Charles Mitchell case made their way to the jury room. It was 11:25 a.m. on June 21, and deliberations were about to begin.

Along with about a hundred spectators, Mitchell and Steuer remained in the dimly lit courtroom, restlessly waiting for any hint of when the verdict might come. Mitchell occasionally left the courtroom to pace the marble-floored corridors, puffing on cigarettes. His nervous energy and anxiety had ruined his appetite. His weight had dropped from 180 pounds to 156. He looked gaunt and unsteady.

There was little indication of which way the jury was leaning. Observers were almost evenly split about whether the prosecutors had proven their case. Many of Mitchell’s friends who had gathered daily to watch the trial were preparing themselves for a guilty verdict.

By 10:30 p.m. that evening, with no decision reached yet, the judge sent the jury, under guard, to Hotel McAlpin on Broadway and Thirty-Third Street in the middle of Herald Square. Mitchell went home to contemplate his fate.

The next day, the jury returned to the jury room at 8:58 a.m., escorted by two U.S. marshals.

At about noon, the foreman sent a question to the judge, providing the first glimpse of what the jury might be thinking. Some jurors wanted to know how far they should “submerge” their personal opinions in order to reach a unanimous verdict.

What exactly were they asking? Were they suggesting that some jurors did not like Mitchell?

This appeared to be an ominous sign for Mitchell.

The jurors emerged from the jury room on the third floor of the federal courthouse to hear the judge’s reply.

Judge Goddard instructed them that their private views should not preclude them from listening with open minds to their fellow jurors.

The jurors again left the courtroom, and when the judge called a recess for lunch, many of the spectators left to find a place to eat. The prevailing view was that the deliberations could go on for days.

Suddenly, however, the twelve members of the jury returned, some with their hats in hand.

“It must be a conviction!” some spectators whispered excitedly.

A reporter for one of the evening papers rearranged his notes, with plans to race out of the courthouse the moment the verdict was read to get the story to his editors. He placed a page on top that read: “Mitchell—convicted.”

Everyone hurried back into the courtroom, stunned by the speed with which everything was happening. Spectators pressed against the doors, shouting and jostling for seats.

Judge Goddard made his way to the bench.

“All rise. All rise!” the clerk called out.

Mitchell stood, looking haggard, staring into the eyes of the jurors, darting from one to the other, hoping to ascertain his fate.

“Gentlemen, have you reached a verdict?” the clerk asked.

Mitchell strained to hear the foreman.

“On both counts in the indictment, we find the defendant Charles E. Mitchell,” the foreman said in a soft voice, with an almost purposeful pause for effect as Mitchell stared directly at the judge. “Not guilty.”

Mitchell leaped to his feet, almost losing his balance, his face flushed red, a smile emerging as he started to cry, weeping with joy. He was free. The months of headlines, of sleepless nights, of contemplating prison, were over.

Stepping past the defense table, he made his way to the jury box to shake their hands as if they were his customers. “Thank you, sir, thank you, sir…” Then he returned to the defense table, where Steuer was still standing. Placing an arm around his shoulder, he whispered, “Thanks, Max, thanks.”

Medalie, the U.S. attorney, sat at the prosecutors’ table in a state of bafflement.

In the hallway, Mitchell was peppered with questions from reporters. In a trembling voice he said, “I can’t say anything now. I’m too moved.”

Steuer moved in front of the scrum of reporters. “This verdict proves that in the State of New York justice can still be had by the verdict of a jury,” he proclaimed. “That neither mob psychology nor emotion will enter the final determination. Mr. Mitchell was absolutely innocent of the accusations made against him as a result of what was deemed popular demand.”

The prosecution team remained in shock. Medalie announced he was going away for “a rest.” Attorney General Homer Cummings, appalled by the verdict, said, “Nevertheless I still believe in the jury system.”

In the end, Steuer had been able to convince the jury that Mitchell had followed the advice of lawyers, utilizing practices like wash sales that were fully legal, however unseemly. “Conviction would have branded one of America’s leading bankers a criminal for having done exactly what hundreds of other men were doing at the time,” the Muskegon Chronicle wrote, contending that the legal advice Mitchell had relied on “was bad, but that does not constitute a crime.” Mitchell, still shaking with relief and adrenaline after the verdict, walked to the Bankers Club on Broadway for a celebratory lunch with his attorney and friends. They then walked all the way uptown to his home on Fifth Avenue, serenaded by hundreds of supporters yelling, “Hurrah for Charlie Mitchell!”

He was greeted at home by Elizabeth, where friends gathered to celebrate. Mitchell’s victory was a kind of salvation—a fleeting absolution from the political and economic forces that demanded a reckoning in the aftermath of the crash.

To much of the country, Mitchell’s acquittal landed not as relief but as a provocation to a wounded and disillusioned public. That Sunday, Reverend F. Marion Smith gave a sermon at his small church in Springfield, Massachusetts, trying to provide some moral guidance to his congregation about the headlines they had read about Mitchell’s acquittal. The title of his sermon was “Moral people who burlesque morality are the worst enemies of our modern morals.”

Capturing the mood of the country, he spoke these words: “Charles Mitchell could not be found guilty, according to the letter of the law, but an outraged public sentiment will not excuse him for lack of moral judgment and business ethics.”

He told his congregants, “The people of our day need a keener sense of moral direction to keep them from drifting,” decrying the oft-cited explanation “Most everybody does it, therefore it must be all right.”

The reverend, a slender man who spoke deliberately, concluded with a message: “Many of us achieve self-approval by cheap and superficial methods, concocting clever excuses to make what we want to do seem admirable,” he said, “so that we can condone our actions and like ourselves.”

EPILOGUE

On the afternoon of November 23, 1937, just two days before Thanksgiving, Thomas Lamont looked up from his desk at J.P. Morgan to see his partner George Whitney standing before him looking “thunderstruck.”

This was a rare sight, as Morgan men were not known to wear their emotions on their sleeves. Struggling to find his words, Whitney confided in Lamont that he needed some advice about how to handle a dire situation involving his younger brother, Richard.

If people expected Wall Street to show signs of humility or contrition about the crash and the hard times that followed, they certainly weren’t going to get it from Richard Whitney. The head of the New York Stock Exchange still entered every room with the aura of the “white knight” nickname that he had acquired on Black Thursday—October 24, 1929—when he strolled onto the trading floor and placed a bid of $205 for U.S. Steel. For that bold (if ultimately ineffectual) gesture, he won the sobriquet “Hero Whitney” from Time. In 1930, he ascended to the presidency of the Exchange—at forty-one, the youngest leader in its history—where he distinguished himself as Wall Street’s fiercest attack dog.

“You gentlemen are making a great mistake,” he had lectured Pecora and his investigators, defending pools, short selling, and other practices that the public had come to view with misgiving, if not outright disgust. “The Exchange is a perfect institution,” he insisted, an institution built on integrity.

Nonetheless, by 1934, Congress had passed, and Roosevelt had signed, a law establishing a new federal agency, the Securities and Exchange Commission, designed to prevent the investor pools, debt-fueled speculation, and general opacity of the markets that led to the crash. Joseph Kennedy, a former speculator himself, was appointed by Roosevelt as its first chairman. Three years later, in late October 1937, the market crashed again, evoking the trauma of 1929. Whitney, though no longer president of the Exchange, blasted the new government agency, arguing all the new government regulations were strangling the flow of capital.

But on that day in November 1937 when George Whitney walked into Lamont’s office, he wasn’t worried about his brother’s criticism of the SEC. It was a much more difficult, personal matter.

Richard’s high-flying lifestyle—the townhouse, his country estate, and all the rest of it—was about to implode. In addition to his role running the New York Stock Exchange, he also ran a bond trading firm; unbeknownst to his clients there, he had been pilfering millions of dollars from their accounts. Richard told George that he had taken securities certificates that needed to be replaced the following day. In order to do so, he desperately needed a loan of about $1 million. George, who had already loaned Richard almost $3 million, told Lamont that his brother was in “a very serious jam.”

Given all the negative attention heaped on the House of Morgan since the crash, Lamont had a horrible sense of foreboding about how this could unfold.

William O. Douglas, who had succeeded Kennedy as chairman of the SEC, had begun using his new role to rail against the “goddamn bankers,” calling “the Morgan influence…the most pernicious one in industry and finance today.” Douglas often advocated for the creation of new regional banks to Roosevelt, citing the need to “displace the Morgan influence in the various regions [with] a new and enlightened leadership in the business.”

Richard Whitney’s deep ties to the House of Morgan were about to hand Douglas, the SEC, and anyone else who held a grudge against Wall Street all the ammunition they needed to finish off whatever reputation it still had. The work Lamont had been quietly putting in behind the scenes to ingratiate himself with Roosevelt’s cadre of New Deal advisors would likely be rendered a waste of time.

“Well, that is a devil of a note, George,” Lamont said. “Why, Dick Whitney is all right, how could he mishandle securities even for a moment, no matter what the jam?”

“I don’t know, it is an inexplicable thing,” George said. “It is an isolated instance. But he has got to deliver them tomorrow, and I am going to help him out; I have got to help him out, of course.”

“I think you are dead right,” Lamont told him. “Certainly I will help you to help your brother. Certainly.”

George’s characterization of his brother’s problem as a “jam” would, in time, turn out to be an almost comical euphemism. Richard eventually admitted to his brother that he had taken securities valued at $1 million from the New York Stock Exchange’s $2.5 million Gratuity Fund, which paid life insurance to families of its members, and had pledged those securities as collateral for loans to himself and his company. On November 24, Lamont wrote a personal check for $1,082,000 to George, who signed the check over to his brother to get the bonds released and restore about $221,000 of the money Richard had stolen.

Two weeks later, after George partially repaid Lamont’s loan, he went to Jack Morgan. Referring again to his brother being in an “awful jam,” George asked to withdraw funds from his partnership account. Morgan agreed, assuming there was some business necessity for the money.

In the meantime, George confided his fear to Lamont that his brother was not capable of “handling a business properly and adequately” and indicated that he intended to get him “to wind up the business.” He admitted that for several years, he had been covering Richard’s losses. When in 1934 state bank examiners had conducted the first-ever inspection of the House of Morgan, George papered over his loans to his brother by providing his own securities as collateral.

Shutting down Richard’s business, Lamont agreed, was “a wise thing.”

And with that, Lamont left for a golfing holiday, trying hard to put the disconcerting conversations out of his mind. Neither he nor George informed anyone at the stock exchange what Richard had done. The matter had been settled among gentlemen.

But it hadn’t been. Three months later, in February 1938, Thomas and Florence Lamont, with his valet, Metcalfe, and her maid, Madeleine, sailed for the French Riviera, where the Lamonts had rented an old château. Lamont was still stewing; he could not relax.

“His heart began to ‘thump’ (as he calls it) and making a ringing in his ears,” Florence wrote to her son Tom. “I think it is mostly just strain and worry…He has been dreadfully upset by the Whitney affair. What a terrible thing.”

On March 5, 1938, shortly before he was due to appear before an investigative committee of the New York Stock Exchange, Richard showed up at a club where Morgan partner Frank Bartow was playing bridge.

“I am in a jam,” Richard told Bartow, pleading for a loan—then he confessed that he had stolen shares from the New York Yacht Club.

“This is serious,” Bartow said.

“This is criminal,” Richard acknowledged.

Bartow insisted on consulting a lawyer. When he and Jack Morgan met with the firm’s counsel, John Davis, he advised them that anything they did to help Richard would implicate the bank. They called George, who was in Florida convalescing from an illness, and explained the situation.

“My God!” George cried, devastated to learn how quickly his brother’s situation had crumbled.

America’s moneyed class was stunned as the news broke in the press. Roosevelt learned the news while he was eating breakfast in bed. “Not Dick Whitney!” the president said. “Dick Whitney—Dick Whitney! I can’t believe it.”

The New York Stock Exchange board of governors filed misconduct charges against Richard Whitney. He was indicted for grand larceny and securities theft, which included $100,000 stolen from his wife. Unlike Mitchell, Whitney decided not to fight. Within a month of the charges being filed, Richard Whitney pleaded guilty. The former president of the Exchange was sentenced to five to ten years at New York’s infamous Sing Sing prison.

The case ensnared the studiously careful Lamont, who had managed to maintain his impeccable reputation until that moment. (Years later, his reputation took a hit thanks to his friendship with Mussolini. His attraction to men in power reportedly even caused him to ask a senior German official, “Just what sort of fellow is Hitler? Is he the sort you’d go fishing with?” The reply: “My dear Lamont, he is the nicest fellow in the world—always making jokes. You couldn’t ask for a more delightful companion.”)

Lamont insisted he had no idea that Richard was a criminal—a contention that was hard to believe, given the breadth of his experience and the plain-as-day circumstances—but he clung to the explanation that he’d done what any friend would do.

“It never occurred to me that Richard Whitney was a thief,” Lamont said in his testimony to SEC investigators probing Whitney’s misdeeds. “What occurred to me was that he had gotten into a terrible jam, had made improper and unlawful use of securities; that his brother was proposing to try to make good his default. That is what occurred to me, and even then, as I say, my confidence in him was such that when the story came out, when I was abroad, it gave me the most tremendous shock in the world. It made me ill almost that all that time he could have been deceiving his brother, deceiving his partners, deceiving his wife and community. Well, it was just—it is inconceivable.”

To his longtime friend Lady Astor, Lamont explained his bewilderment at the situation. “It is all a bit like Alice in Wonderland to me. Ought we all to forget the principles on which we were trained to help one another, to try to forgive and to try to give the fellow another chance?

“Of course,” continued Lamont, “as the evidence proved, Dick was a thoroughgoing crook. He lied to George up to the last moment, he falsified his books, he deceived his wife and children, etc. etc. But all this was unknown to George last November at the time he tried to help Dick undo the wrong that he had done.”

The SEC ultimately issued a report that accused Lamont and George Whitney of following an “unwritten code of silence” in not reporting Richard’s criminal conduct. The Justice Department declined to prosecute Lamont or George Whitney. But after the report was made public, Douglas, the chair of the SEC, declared that a vast conspiracy with “a powerful figure with money and political connections” had protected them, leading to speculation that the House of Morgan had cashed in its last chit.

Of the men who witnessed 1929 from the uppermost echelons of Wall Street and Washington, the one who fell the hardest was also the one who survived the longest. Richard Whitney died at the age of eighty-six in 1974, not long after the stock market had settled into its second prolonged malaise of the twentieth century. After being paroled from Sing Sing in 1941, he went into dairy farming, then started a textile business in Florida. He was debt free. His brother George, who ultimately rose to chairman of J.P. Morgan in 1950, personally paid back every dollar Richard stole.

Jack Morgan died in 1943. Carter Glass, still serving as senator, died in 1946. William Durant died in 1947, Lamont in 1948, Mitchell in 1955. Pecora served as a New York judge for fifteen years, ran unsuccessfully for mayor of New York City in 1950, and died in 1971.

Herbert Hoover rehabilitated his reputation the best way he knew how—by feeding starving people yet again. He organized relief efforts in Europe and Asia following the Second World War. Congress subsequently appointed him to run a commission on improving government efficiency, which was considered a success. Hoover died as a respected elder statesman in 1964.

Winston Churchill took years to recover from his financial losses incurred in the crash. Through the 1930s, he remained functionally broke, barely staying ahead of creditors by taking writing fees to publish a torrent of articles, including one about being hit by the car in Manhattan. After a long-overdue bill from his shirtmaker threatened to push him into personal bankruptcy, an Austrian-born financier named Sir Henry Strakosch bailed him out. When Churchill became prime minister, he finally had an expense account to match his appetites. A massive book deal for his World War II memoir, as well as relatively lavish sums for film rights to previous books, gave him the financial security he had lacked for most of his life, and when he died in 1965, he had money to leave his heirs.

John Raskob left the most enduring monument, the Empire State Building. When it opened to much pomp and circumstance in 1931—President Hoover ceremoniously turned on the lights by pressing a button in Washington—it was the world’s tallest building. Raskob had successfully outdueled Walter Chrysler and his Chrysler Building for that title by adding an observation deck and a 200-foot mast. The nascent National Broadcasting Company secured exclusive rights to transmit its signal from atop the building, an unexpected new source of revenue.

Like the Chrysler Building, however, as well as Rockefeller Center, the other stupendous addition to the New York skyline during that era, the Empire State Building was a financial albatross for years. At its opening, it was less than 20 percent occupied. Raskob’s friend Al Smith gave space away for free to Catholic charities, just so it didn’t seem so terribly vacant. Nonetheless, the press dubbed it the “Empty State Building.” Because Raskob was personally averse to debt and had financed the construction himself, he was able to weather the lean years. For the most part, he kept out of the spotlight. He hated Glass–Steagall and the reforms that the Pecora commission had forced on Wall Street, and became an avowed enemy of Roosevelt and the New Deal. The press, however, had largely stopped calling, no longer interested in his views on politics, and to the extent he had any involvement with Washington at all, it was mostly to badger the DNC about paying back his loans.

In 1941, Raskob fought one last big fight, engaging in a long-running tax dispute with the Internal Revenue Service. In 1929, he originated a scheme whereby he and his friend Pierre du Pont would sell each other big blocks of stock at a price below what they had paid, then buy them back the following year. In doing so, they could create enormous tax write-offs. According to Raskob’s interpretation of tax law, such wash sales were fully within legal bounds. The courts disagreed, and after the Supreme Court refused to hear Raskob’s appeal, he was forced to pay $1,450,000 in cash to the government immediately.

In 1945, tragedy struck when the pilot of a B-25 bomber, “lost in a blinding fog,” crashed his plane in between the seventy-eighth and seventy-ninth floors of the Empire State Building, killing thirteen people and causing a frightening fire at high altitude. So sturdy was the construction that the building was closed for less than a week. In 1952, a year after Raskob’s death, the building was sold for $51 million, then the highest price paid for a single structure. As an investment, it had not paid off—the land alone had cost Raskob $34.5 million in 1929—but unlike many other bad bets of the era, the Empire State Building had an undeniably enduring impact.

While the wealthiest men of America were largely able to sustain their sumptuous lifestyles through the 1930s, some were not so lucky.

In late 1930, William Durant and his wife, Catherine, were returning home in a chauffeured car after having gone to dinner with friends. Staring dejectedly at the dark streets of New York, Durant admitted to his wife, “I’m wiped out.”

To the outside world, Durant maintained a brave face. He continued to condemn the Federal Reserve for its interference and attack Hoover for failing to prevent the hike in interest rates. Americans would see “longer breadlines, more soup kitchens, continued uneasiness and distress, and a more pronounced tendency to socialism and communism,” he declared, until someone emerged to provide “leadership that has the confidence of the people.”

Durant became the head of the Bank Depositors’ League, which lobbied for “legislation to give depositors in national and state banks absolute protection…[and] provide safe and convenient places where people can put their money, with a United States government guarantee that it will be returned any time they ask for it.” Though Durant had been accused of shorting the market to profit from its collapse, he adamantly denied the allegations and begged Richard Whitney to ban short selling to inspire dispirited investors: “The word TRAITOR is the only term that properly applies to the gamblers who, without let or hindrance, and with the approval of your organization, are taking advantage of the weak and helpless and adding greatly to the demoralization now existing.” Durant, who had participated in many bull pools, saw no irony in this hypocritical barrage.

Despite being broke, Durant kept up appearances until 1936 when, at the age of seventy-four, he declared bankruptcy. He put his net income that year at $5,428. He blamed litigation, unreasonable brokerages, greedy creditors—everyone but himself. “My petition in bankruptcy, filed today, is due to frequent and repeated court proceedings instituted by a few creditors, representing less than 5 percent of my total obligations, who have attempted to gain a preferential position,” he wrote on February 8, 1936, in a declaration in federal district court in New York. “Action by the creditors referred to has prevented me from giving my best efforts to rebuilding my fortune, and I no longer propose to be harassed and annoyed. I wish to state that all creditors will be treated alike, and if fortune favors me all will be paid in full.”

The Durants slowly pared back their lifestyle, moving to a cheaper apartment while their daughter, Margery, continued to live the high life, as if nothing had changed. She took up aviation, bought an airplane, and with her own pilot and mechanic traveled for several years on well-publicized tours of Europe and Africa to promote private air travel. “Let others sit by the fire,” she told reporters. “I seek adventure.”

Durant struggled to get back in the game with various businesses, from the extravagant (“flying machines” for agriculture) to the mundane (a chain of bowling alleys). All met the same fate. But Durant still dressed in fine clothes, and he and Catherine continued to stay in nice hotels when they traveled. “You’d never know he was broke,” observed a friend after encountering him in Detroit. But in the bankruptcy filing he declared debts of $914,000, mostly funds owed for his apartment and office rentals. All he had to his name was $250 worth of clothing. In 1938, the spectacular contents of Raymere, his seaside estate in Deal, New Jersey, were put up for auction. A silk Beauvais Aubusson tapestry, purchased for $5,500, sold for $375, while a seventeenth-century Flemish tapestry, purchased for $10,000, went for $200. The property itself went for $44,000.

In 1938, Durant was compelled to write to Margery, who still had her GM stock, to ask for money. He explained that for the previous five years, his income had totaled about $500 per month, against expenses of $1,700. He needed a “loan (not a gift)” of $1,200 a month until he could get back on his feet. Margery helped out, as did friends, but GM had cut its dividends from $3 to $1 a share, so her own wealth was dwindling and she had her own money problems. Durant died on March 18, 1947, at the age of eighty-five, leaving Catherine, once one of the wealthiest women in the United States, penniless. Later that year, Margery and her husband were arrested for narcotics trafficking. Durant’s only son, Clifford, had died years earlier of a heart attack, likely brought on by obesity and alcoholism. In the Durant saga, much more than a great fortune was lost.

What did it feel like to move through the world of money and power with complete confidence, only to see it all vanish, as if you were no less expendable than those living in Hoovervilles? The male ego certainly took a beating in the aftermath of the crash.

On November 27, 1940, the house photographer at the Stork Club approached Jesse Livermore, then sixty-three, and his third wife, Harriet, and asked if he might take a picture. Livermore smiled and said, “Of course.” The Stork was his favorite club, and a long time had passed since anyone cared about his comings and goings. “But it’s the last picture you will take,” Livermore added, “because tomorrow I’m going away for a long, long time.”

Harriet snapped her head around. “Laurie,” she said, using her pet name for her fifth husband, whose middle name was Lauriston. “What do you mean?”

“Just a joke, darling, only a joke,” Livermore said with a smile.

They posed and the photographer took their picture, Harriet with a happy grin, Livermore looking straight into the camera with a vacant stare. He picked at his food while Harriet danced with several friends and enjoyed the evening out.

The crash had left Livermore richer than he’d ever been, but it didn’t last long. Within a few years, he made another one of his audacious bets and lost nearly everything. He was forced to ask the financier Arthur A. Robertson for a loan of $5,000. “Do men of your kind put away ten million dollars where nobody can ever touch it?” Robertson asked him. “Young man, what’s the use of having ten million if you can’t have big money?” Livermore replied.

His finances and life were falling apart. His second wife, Dorothy, who received a divorce settlement worth about $10 million, was beset by heavy drinking and had a scandalous affair with a twenty-five-year-old undercover Treasury agent who specialized in Prohibition enforcement. Livermore’s own dalliances were somewhat less public. Livermore downsized to a modest office with a handful of employees. At the age of fifty-five he was traveling in Europe when he heard a concert singer named Harriet Metz, from Nebraska. They wed in 1933.

The day after his enigmatic comment to the photographer at the Stork Club in 1940, Livermore left his office in the Squibb Building on Fifth Avenue at lunchtime and walked three blocks to the Sherry-Netherland Hotel on Fifty-Ninth Street, entering under the gaze of its famous gargoyles on the roof. The Livermores had lived in an apartment at the Neo-Romanesque hotel for five years before moving into an apartment at 1100 Park Avenue. But he liked stopping in for a cocktail after work. As he often did, Livermore made a point of talking to the manager, Eugene Voit.

Livermore appreciated having a place where everyone who worked in the restaurant and bar knew him. And the elegance of the Sherry-Netherland, with its frescoes in the style of Raphael painted on the ceiling of the arched lobby, made it even better. He had earned his place in this sumptuous environment. It felt familiar, comfortable.

When he took a seat near the bar, the bartender, Carl Fischer, placed his usual old-fashioned—good whiskey, bitters, a bit of water and ice—in front of Livermore without him saying a word. Livermore ordered lunch and ate alone. Fischer noticed he seemed nervous, a bit troubled. After eating, Livermore chain-smoked and scribbled furiously in a leather-bound notebook. He used a gold pen on a chain, a singular accessory that had appeared in many news stories about him over the years—that and his pinkie ring.

At 2:30 p.m., Livermore rose and walked back to his office, but the Sherry-Netherland staff noticed him return to his regular table at about 4:30 p.m. Fischer, preparing another old-fashioned, noticed that Livermore appeared upset.

The famous trader sipped his drink and again pulled out the notebook, writing urgently, and then tucked it back into his pocket. Livermore signaled the bartender for another cocktail, then left through the door that led to the gilded lobby at 5:25 p.m., quickly making his way toward the men’s restroom. Manager Voit saw Livermore but noticed nothing unusual about his demeanor, recalling, “He looked normal and cheerful enough to me.”

Livermore slipped through a door that led to the darkened cloakroom, where visitors to the now-empty banquet hall checked their coats and hats. He seated himself on a chair and took out a .32-caliber Colt automatic, which he had purchased in 1928 to add to his large collection of firearms. He pressed the cold steel muzzle of the weapon against his head, just behind his right ear, and pulled the trigger. The bullet tore through his skull. No one heard the gunshot.

“My dear,” Livermore had written in an eight-page letter to his wife in the notebook. “Can’t help it. Things have been bad with me. I am tired of fighting. Can’t carry on any longer. This is the only way out. I am unworthy of your love. I am a failure. I am truly sorry, but this is the only way out for me.”

Livermore’s lifelong struggle to balance his obsession with the market and his life was over. Had he stepped away from the stock market in late 1929, he could have lived the rest of his life in prosperity. But his nature made that impossible. Like many gamblers, Livermore lived as much for the action as for the profits.

Livermore had told his oldest son, Paul: “Every stock is like a human being: it has a personality, a distinctive personality. Aggressive, reserved, hyper, high-strung, volatile, direct, logical, predictable, unpredictable. I often studied stocks like I would study people; after a while their reactions to certain circumstances become more predictable.”

One day after the crash, he had been seated at a table in Palm Beach playing bridge with Walter Chrysler, Ed Kelley of United Fruit, and T. Coleman du Pont. Livermore began talking about his latest wheat trade, bemoaning the fact that he had made a bad mistake by cashing out his position after wheat rose 25 cents above his average price.

“J.L., how the hell could it be a bad mistake to make a profit of two and a half million dollars?” Chrysler asked.

“Because, Walter, I sat back and watched wheat rise another twenty cents in price in three days.”

“I still don’t get it,” Chrysler said.

“Why was I afraid?” Livermore replied. “There was no good reason to sell the wheat. I simply wanted to take my profit.”

“It still looks like a pretty good trade to me,” Kelley said. “I’m afraid you lost me, J.L.”

Livermore patiently explained that he was acting out of fear. “I was in too big a hurry to convert a paper profit into a cash profit. I had no other reason for selling out that wheat, except that I was afraid to lose the profit I had made.”

The best traders, Livermore understood, were fearless.

About one hundred people, mostly the luminaries of Wall Street and the social set of Palm Beach, attended his funeral in New York. At his death Livermore’s net worth, when debts were settled, was in the red by $361,010. He’d arranged trusts for his children, but they had consistently lost money. To Harriet’s surprise, he owed $11,000 on the lease of a secret apartment at 550 Park Avenue. To economize, she moved his ashes from the expensive Ferncliff Mausoleum to Acton, Massachusetts, where he shares a modest gravesite with his parents, just a few miles from his childhood home, as if this peripatetic soul had never gone anywhere.

Of all the major actors of 1929, Charles Mitchell remains the most enigmatic. He crossed boundaries. He was the hero. He was the villain. He was the iron-chinned stoic who got knocked down and pulled himself back up.

Throughout the 1920s, being a public figure felt essential to his success as a businessman. After the crash, all he could see was how much it had cost him. “I honestly mean it—that if I could go on and attend to my own living with my name never in the press again, it would be Santa Claus to me,” he reflected after his acquittal.

By that point, Mitchell stood “stripped of all his possessions—threadbare.” The building at 934 Fifth Avenue was sold to the French government for use as its consulate. He and his wife took up residence at their twenty-five-room Tuxedo Park home, most of which they closed off to save money. Living off the relatively small income from Elizabeth’s holdings, they adjusted to new habits, like home-cooked meals. Eventually, Tuxedo Park had to be sold, too, auctioned off in 1940. It was used during the war as a clearinghouse for British child evacuees.

Mitchell kept up his pattern of brisk exercise, which, one friend snidely speculated, could have been a factor in his fall from power: “If Charlie had indulged himself more, and occasionally had awakened in the morning with that dark brown taste in his mouth which kills all ambition for the day, it probably would have been better for the bank.”

Unwilling to let Mitchell off the hook, even after his acquittal, Roosevelt’s Department of Justice filed a civil lawsuit against him with the Board of Tax Appeals. That a jury failed to convict him of a criminal charge, the board decided, did not prevent “the imposition of a fraud penalty of 50 percent of the deficiency,” which cost Mitchell more than $2 million. Government attorney E. S. Greenbaum, who pursued the case for four years, received a personal letter of praise from Roosevelt. “The amounts involved are not important. The government’s successful challenge of the practices to which Mr. Mitchell resorted in this case has served largely to end those practices.”

With the civil suit mostly behind him by 1935, Mitchell rented a three-room office at 41 Broad Street, opposite the site of the old curb market, where he set up a consulting firm, C.E. Mitchell, Inc., representing himself as a “poor fellow going back into business.” He didn’t stay poor for long. Less than six months later, he accepted the position of chairman of the board of Blyth & Co., a West Coast investment bank. Soon he was worth millions again.

Mitchell kept his struggles very much to himself. His son Craig, who was away at boarding school at St. Paul’s during the Pecora hearings, said his father never talked to him about his tribulations. He said he “was left to my own devices in coping with the headlines. No one spoke to me about the matter.” In 1936, the Mitchells’ daughter, Rita, married the boy next door, George Adam Rentschler, son of National City’s president under Mitchell, Gordon Rentschler, in a low-key ceremony at Mitchell’s new home at 1 Sutton Place South. The luxuries Rita and Craig had known in their childhood—governesses, chauffeured cars, country estates—were long gone. Rita did not mind. “It was about time,” she said years later.

In 1939, Mitchell was again compelled to testify, this time before a Senate committee conducting an industry-wide inquiry into alleged monopoly practices in investment banking by “exchange of business favors.” There he disclosed for the first time that his debt to J.P. Morgan—which had once stood at more than $12 million—had been settled in full. If he nursed old grudges, he kept them to himself; he called the Glass–Steagall Act “one of the greatest steps of progress that has been made.”

For decades, the debate continued to rage—how responsible were Sunshine Charlie and his peers on Wall Street for causing the Depression? Did Mitchell do as much as any single man could to push the economy over the cliff, or was he a convenient scapegoat, as his attorney had argued, “a big fish” to be gutted and filleted as an example of what society thought of “banksters”?

In a speech in July 1935, Senator Carter Glass was still raging about Mitchell not being removed from the board of the New York Fed for his role in rekindling speculation when the Federal Reserve had tried to shut it down.

In response, Charles Sumner Hamlin, a longtime member of the Washington board who kept an extensive diary, wrote to Federal Reserve governor Marriner S. Eccles, who had taken over as chairman of the Fed board, citing a report he had written in 1931 that cast a whole new light on Mitchell’s critical actions in March 1929.

The report said that on March 26, 1929, about six weeks after the Fed’s “direct pressure” campaign to reduce total borrowing of the banks, the New York Stock Exchange suffered one of the sharpest breaks in its history.

“Frightened traders all over the country were selling stocks blindly on that day…Under these circumstances, Mr. Mitchell…came to the relief of the money market, advancing six million dollars on call loans.”

Mitchell’s real purpose, Hamlin declared, was to stop the credit market from completely freezing up. If investors believed “that money could not be had no matter what was offered for it,” Hamlin wrote, the effects on the economy—not merely the stock market—would be catastrophic. When Mitchell stepped into the breach, the market took a breath, and call-money rates went down, from as high as 20 down to 9 percent.

Hamlin’s examination of withdrawals from the Federal Reserve over the twelve weeks following Mitchell’s actions revealed that National City Bank had borrowed money on only eleven days—effectively refuting the charge that Mitchell was using Federal Reserve funds to loan to stock traders pushing the stock market higher.

“The final crash of October, 1929,” he concluded, “came not from the withdrawal of Federal Reserve credit from speculative channels, but from the increase of speculative credit in those channels brought about by the avalanche of ‘bootlegging’ credit consisting of loans ‘for others’ over which the Federal Reserve System had no control, which avalanche made the speculative credit structure so top-heavy that it finally broke of its own weight.”

Hamlin argued that Mitchell had not been the feckless stock promoter his critics made him out to be. In fact, he had averted a disaster.

His penchant for making snappy remarks to reporters, however, had been dangerous, Hamlin allowed. “Attention should be called to Mr. Mitchell’s grotesque misinterpretation of credit conditions between the time of the above interviews and the final crash in October,” Hamlin said, citing several articles in which Mitchell repeatedly talked up the market.

“In my opinion,” concluded Hamlin in his report, “it would be better for the Board to leave Mr. Mitchell in the morass in which he has placed himself, and not incur the risk of making a martyr of him by any further proceedings.”

Elliott V. Bell, the reporter who had written down Mitchell’s famous proclamation that day in March of 1929, when he announced that National City would supply funds in contravention of the Fed, later reflected, “I do not presume to set myself up as a champion of Mr. Mitchell, but as far as this particular incident is concerned the charges are hardly just. His position was that banks had no right, even at the behest of the Federal Reserve Board, deliberately to precipitate a stock market panic by a concerted refusal to lend money at any price.”

Years later, economist John Kenneth Galbraith wrote that, in the face of Mitchell’s actions, “The Federal Reserve board remained silent…It meant that it conceded Mitchell’s mastery.”

In fact, the story, as it has emerged, is a lot more complicated than that. Mitchell’s actions in March 1929 were encouraged, and indeed approved, by New York Fed governor George L. Harrison. Throughout the entire episode, the board refused to condemn Mitchell and, in truth, only appeared to be frustrated with the comments he made in his interview with Bell, not the substance of his plan to lend money. For reasons that still remain unexplained, throughout the controversy, Harrison remained in the shadows, letting Mitchell take the heat.

As late as 1950, the federal government was still after Mitchell, adding him to an antitrust lawsuit against seventeen investment banking firms “and especially Blyth,” which it considered merely a successor to the mothballed National City Company.

After nearly three years, Judge Harold R. Medina dismissed the lawsuit as being based on “ill-founded rumors, conjecture, and age-old suspicion.”

Mitchell’s lawyer claimed he was “millions in the red.” Mitchell himself said, “That’s truer than Gospel.” Tone-deaf to the end, he added, “Like everyone else, I presume, I have cut down on club memberships very markedly.”

But unlike so many others from that period that lost so publicly, he kept going.

“I have never lost my nerve,” Mitchell said. “I spent all my life at work. One can’t quit, and I don’t propose to quit. I think I have something from my long experience to offer. I can play a part and I’m going to give myself the chance to play it.”

If Mitchell deserves a second, more nuanced consideration, so, too, does Carter Glass. The man whose name is enshrined on the Glass–Steagall Act, lauded for its boldness in separating commercial and investment banking and reining in financial excess, was not exactly the brave reformer he is often made out to be. He did not set out to transform the existing financial order; he wanted to protect it.

He had to be browbeaten into accepting key elements of his own bill. He initially opposed federal deposit insurance, believing it would reward reckless banks and encourage moral hazard, and objected to regulating interlocking directorates—the practice of corporate leaders serving on multiple, potentially conflicting boards—which was seen by many as the essence of financial oligarchy and the business strategy of J.P. Morgan. And his secret participation notwithstanding, he loathed the Pecora hearings, without which the self-dealing of the banking elite might never have been fully exposed. More than anything, it was those hearings that built public momentum for reform.

“Carter Glass has asserted that the entire proceeding was a circus which brought forth nothing new. Mr. Glass, as a newspaperman himself, should know better than that,” a syndicated columnist, Heywood Broun, wrote after the Pecora hearings. “The headlines themselves show that all the editors of America regard the facts spread on the record through Mr. Pecora’s investigation as decidedly new, vastly vital, and of paramount public importance.”

The Glass–Steagall Act would almost certainly not have passed without the intervention of Winthrop Aldrich and his rallying of Roosevelt to the cause of separating bank functions. Similarly, it was Steagall’s insistence on deposit insurance—something Glass decried—that won the critical backing of rural representatives. Small-town America finally felt like it had won a battle with Wall Street.

One thing Glass knew how to do better than anyone else, however, was take a victory lap. When the final version of the Glass–Steagall Act was signed into law, Steagall wasn’t even invited to the Oval Office. Glass got the glory; Steagall got a footnote.

Even after the Glass–Steagall bill was signed into law, the Pecora hearings continued and uncovered that Albert Wiggin of Chase National Bank had shorted his own company’s stock in the hectic days of 1929. In doing so, Glass’s attacks on Wall Street continued to be vindicated. And to his credit, in 1934, Glass, in an about-face in his view about the Pecora hearings, proposed “a special allowance” of $125,000 be paid to Ferdinand Pecora to recognize his service to the country. “I sit here, hanging my head in shame, when I look back upon the work of our committee in the year and a half, and think of the high-priced lawyers that were brought down here as attorneys for the witnesses that Mr. Pecora put on the stand,” Glass said. Pecora turned down the money.

In Glass’s later years, even as his health continued to deteriorate and he became increasingly absent from Senate proceedings—he didn’t appear in the Senate chamber for two years—he refused to retire. Some Virginia voters actually went to court to have Glass removed, but he would not stand down.

A few weeks after his famous bill signing in 1933, Glass returned from Virginia to Washington and checked into the hotel where he stayed for twenty-seven years. He discovered that while he had been away, the Black waiters in the hotel’s restaurant had been replaced by white women. Glass was furious. As a newspaper account put it, Glass considered the hotel his home, “but, by gosh…no white girl would wait on him. He would have his black boys.” Sure enough, later that night, the hotel management issued a stern directive: “Senator Glass,” it read, “will be served by a Negro waiter at all times, either in the dining room or in his apartment.”

Carter Glass may have changed Wall Street and the banking industry, but there were some things that would never change, so long as he could help it.

AFTERWORD

The United States that bounded full of hope and vigor into the fall of 1929 and the United States that emerged in the dark days of the 1930s were two very different nations.

No cities were bombed or torched in the fall of 1929, and no armies marched on Washington. There were no revolutions or attempted assassinations. No government buildings were taken over by angry mobs. The country faced no earthquakes or floods or fires or pandemics. All the factories remained standing. Most of the farms kept producing. Contrary to conventional wisdom, there was not even any significant loss of life. Popular accounts of despondent stock traders hurling themselves out of windows and leaping off rooftops painted an inaccurate picture. The national suicide rate actually declined slightly that fall, as John Kenneth Galbraith noted in his seminal work The Great Crash 1929.

But daily life in America certainly felt different. To the nation, experiencing the implosion of the stock market felt like watching a heavyweight champion getting knocked out by an untested, unheralded amateur. It wasn’t the way the world was supposed to work. It was destabilizing. A state of shock set in, accompanied by a paralysis of spirit and loss of confidence. People started questioning all the things they had taken for granted. Did a capitalist society make sense anymore? Could it be depended upon going forward? Or had everyone been duped by the glorious market of the 1920s?

One larger question lay behind all the others—who can be trusted?

The United States entered the 1920s believing it had conquered the vertiginous boom-bust pattern that had hobbled the country since its founding. The primary reason for this confidence was the creation of the Federal Reserve, which was established in the aftermath of the crippling 1907 market crash. Its creation was supposed to guarantee that credit would keep circulating throughout the national economy at all times. It was an imperfect institution, limited in power and scope by the exigencies of political compromise, but it was better than the secretive, backroom approach that it replaced.

It did, however, give false comfort to the financial potentates of the 1920s, who believed they were now protected from the vagaries of human nature.

Could the 1929 crash have been avoided? The short answer is yes. There were plenty of opportunities to arrest the forces of speculation before they got out of hand. The long answer is that it would have taken almost divine prescience to look beyond the short-term incentives for making money and focus instead on the long-term consequences.

One big problem was that the main components of America’s financial infrastructure at the time were simply overwhelmed by the crisis. The New York Stock Exchange itself, in its guise as a Roman Renaissance temple, was an old-fashioned, club-like institution, ill-equipped to deal with the deluge of heavy trading that came its way in the 1920s. So was the self-serving brotherhood that worked there.

The national banking system was weak and fragmented, still made up of many fragile, undercapitalized institutions scattered across sparsely populated rural areas that were struggling as the nineteenth-century agricultural economy withered. As cities grew and rural communities stagnated through the 1920s, the banking system became ever more imbalanced and precarious. Before the crash, countless banks were technically insolvent, barely able to stay a half step ahead of their depositors. When credit dried up, they didn’t stand a chance.

As for the Federal Reserve, it was new and untested, and even the people who created it and governed it did not fully understand its power. Some authors and academics have argued that the great Benjamin Strong, the thoughtful and deeply respected head of the New York Fed, could have held off the crash or at least successfully steered the economy through it, had he not died of tuberculosis in 1928. Strong, this argument goes, had the credibility and authority to get margin lending under control in the spring and summer of 1929, and even had he failed to do so, he would have had the wherewithal to aggressively cut interest rates in the aftermath and keep the banking sector from having to pull back so hard on lending and strangle the economy.

It is easy to want to believe that a single man could have prevented a disaster had he not died. It’s equally easy to single out the fine gallery of rogues that populated the Wall Street of the 1920s as the villains of this tale. The difficulty is that, other than the disgraced Richard Whitney and Albert Wiggin, it is hard to make the case that any of the era’s other major financial figures did anything appreciably worse than most individuals would have done in their positions and circumstances.

Markets are not contests of virtue and honor. By pitting the greed of their participants against one another, they wend their messy way toward fair and reasonable prices. Over time, in the aggregate, the system works, even if at any given moment, it can look like pure chaos. Whitney’s and Wiggin’s actions were consequential only after the fact, serving as proof to the general public that Wall Street was corrupt and had to be punished. However contemptible, their behavior—and that of their fellow Wall Street bankers—did not cause the crash on its own. But by encouraging speculation and promising outsized returns to a new class of investors who had never before participated in markets they barely understood, the titans of Wall Street helped magnify the damage when the collapse finally came.

And how should history treat Herbert Hoover? In most rankings of American presidents, Hoover usually falls near the bottom. But there are scholars who have endeavored to rescue him from ignominy, and the case they make is not without merit. As many have observed, Hoover may well have been the most qualified person to ever assume the presidency. He had made a fortune in the mining industry, then distinguished himself as a genuine humanitarian hero during World War I, helping to feed millions of starving Europeans in an impressive feat of diplomatic and logistical prowess. And when the Panic of 1921 struck the stock market and the economy careened into a sharp recession, Hoover, as commerce secretary, was the one person in the hapless Harding administration who seemed to know how to address it, advocating for public spending and rallying the leading economists to declare that recovery was at hand. That strategy worked, or at least appeared to work, in the sense that the economy recovered so rapidly that the Panic of 1921 barely registers in the annals of American history.

For that reason, of all the people who could have been president in 1929, Hoover seemed best prepared to not only handle a crash but maybe even to head one off. On entering the White House, he knew the economy had been running too hot for too long and he tried to make that case to Wall Street, Congress, and the nation. Unable to gain any traction, however, he gave up and turned to other matters. By the time the crash occurred, he had already lost the press—and with it his most powerful tool for shaping public opinion. That vacuum proved fatal. Though he had been a powerful advocate for radio and the first president to install a telephone on his desk, Hoover was, in fact, a terrible communicator. Time, one of the few major media outlets not to endorse him for president, had warned of this deficiency. “In a society of temperate, industrious, unspectacular beavers,” Time wrote, “such a beaver-man would make an ideal King-beaver. But humans are different.”

Hoover committed the ultimate beaver-man blunder when he tried to assuage the public by changing the name for the economic slowdown from a “panic” to a “depression,” which may be the worst rebranding of all time. The one good thing about a panic, after all, is that it doesn’t last long. Whereas a depression? Who knows how long that might go on.

Roosevelt went down in history as an American hero, but in the midst of his tumultuous first year in the White House when he scrapped the gold standard, there were few who foresaw his path to greatness. Roosevelt’s grasp of the economy, wrote John Brooks, was “ludicrously superficial and his attitude toward it scandalously offhand.” Somehow, Americans grew to trust him anyway, and as the whole wide world fell apart, the United States fed off his abundant confidence. People were desperate to believe in something. They certainly didn’t believe in money anymore.

When I embarked on this book, one of my narrative touchstones was Walter Lord’s A Night to Remember, the definitive and riveting account of the sinking of the Titanic. I aimed to do for 1929 what Lord did for that terrible tragedy of 1912—to restore the texture and detail of the human lives at the center of an epic historical event. Who exactly were the people caught up in it, what did their lives look and feel like? Lord did a masterful job of this. But I have tried to resist making the type of sweeping claims he did. “Overriding everything else,” Lord wrote, “the Titanic also marked the end of a general feeling of confidence.” Having spent thousands of hours studying the 1920s, it struck me as highly unlikely that “a general feeling of confidence” had somehow vanished before then.

If there is one valuable insight we can learn from the twentieth century, and probably all of history for that matter, it’s that societies are amazingly resilient. People recover from adversity. In that regard 1929 is unique, in the sense that it led to the longest economic malaise in U.S. history. But the trauma of the crash itself passed relatively quickly.

As early as spring of 1930 Wall Street was ready to move on. It was just the rest of the country wasn’t, and Wall Street ultimately lacked the superpower it thought it had. The devastation wrought by the stock market’s decline—not just during the crash itself but for most of the ensuing decade—caused millions of Americans insufferable pain. It caused them to not just turn away from the market but to revile those who made their living buying and selling stocks.

Yet the forces that drove the market to such stratospheric levels—optimism, ambition, and the belief that the future could be endlessly brighter—did not disappear forever. They never do.

Ultimately, the story of 1929 is not about rates or regulation, nor about the cleverness of short sellers or the failures of bankers. It is about something far more enduring: human nature. No matter how many warnings are issued or how many laws are written, people will find new ways to believe that the good times can last forever. They will dress up hope as certainty. And in that collective fever, humanity will again and again lose its head.

The enduring lesson is not that booms can be prevented or that busts can be fully averted. It is that we need to remember how easily we forget. The antidote to irrational exuberance is not regulation by itself, nor skepticism, but humility—the humility to know that no system is foolproof, no market fully rational, and no generation exempt. The greater the heights of our certainty, the longer and harder we fall.

Charles Edwin Mitchell, chairman of National City Bank, in 1929.

Senator Carter Glass, Democrat from Virginia from 1920 to 1946, co-founder of the Federal Reserve Act, and co-sponsor of the Glass–Steagall Act of 1932. Pictured here in 1932.

Thomas William Lamont, partner at J.P. Morgan & Co.

Albert H. Wiggin (left), chairman and CEO of Chase National Bank; Jack Morgan (center); and Walter E. Frew (right), president of the Corn Exchange Bank, all at the Liberty Loan Parade together in 1917.

Representative Henry B. Steagall, Democrat from Alabama from 1915 to 1943, co-founder of the Federal Reserve Act, and co-sponsor of the Glass–Steagall Act of 1932. Here he is pictured in 1936 when acting as chairman of the House Committee on Banking and Currency.

Senator Reed Owen Smoot, Republican from Utah from 1903 to 1933, co-sponsor of the 1930 Smoot–Hawley Tariff Act.

Benjamin Strong Jr., governor of the Federal Reserve Bank of New York from 1914 to 1928, pictured here in 1917.

Elizabeth Rita Rend Mitchell, second wife of banker Charles Edwin Mitchell, pictured here in her capacity as chairman of the Philharmonic Children’s Concerts in 1929.

William Crapo Durant, co-founder of General Motors and Chevrolet. One of the most influential speculators at the time of the stock market crash.

George Whitney, partner at J.P. Morgan & Co., testifying before the National Monopoly Committee in 1939.

Herbert Clark Hoover, U.S. president from 1929 to 1933. Hoover had the first telephone installed in the Oval Office—creating a direct communication line to the president.

Franklin Delano Roosevelt, president of the United States from 1933 until his death in 1945, on the day of his inauguration. Before he was president, he was the governor of New York State from 1929 to 1933. Here, he is flanked by his wife, Eleanor, on the left and his son Franklin on the right.

Andrew William Mellon (left), American banker, businessman, and Secretary of the Treasury from 1921 to 1932, and Ogden Mills (right), Under Secretary of the Treasury from 1927 to 1932. They are pictured here in 1927 after leaving a session of Congress.

Jesse Livermore, circa 1936.

John Jakob Raskob, executive at DuPont and General Motors.

Bernard Baruch, chief speculator.

Evangeline Adams, the astrologist known as the “stock market’s seer,” circa 1912.

Roger Babson, statistician and economist who predicted the crash, pictured here in 1918.

Irving Fisher, professor at Yale and one of the nation’s leading economists, pictured here in 1927.

On his 1929 visit to the United States, Chancellor of the Exchequer Winston Churchill visited Herbert Hoover at the White House (pictured here), as well as New York City and the Stock Exchange.

Al Smith (right), governor of New York State from 1919 to 1920 and again from 1923 to 1928, meeting with Secretary of the Navy Charles Francis Adams about the construction of the Empire State Building in 1929.

Russell Cornell Leffingwell, partner at J.P. Morgan & Co. and former Under Secretary of the Treasury, circa 1918.

Richard Whitney (right), vice president of the New York Stock Exchange and broker for J.P. Morgan & Co., shaking hands with Senator Burton Wheeler (left) when going to Congress to testify before the Railroad Committee.

The New York Stock Exchange in 1929.

The meeting of the reparations committee in 1929—seated in the front row left to right are Jack Morgan, Secretary of State Henry Stimson, and chairman Owen D. Young; and in the back row, left to right, are Thomas W. Lamont, Thomas Nelson Perkins, Under Secretary of State Joseph P. Cotton, and Assistant Secretary of State William R. Castle.

A profile of Charles E. Mitchell in The New York Times from September 29, 1929.

The New York Times reporting on Jesse Livermore leading a bear clique against a bull clique led by Arthur Cutten.

A crowd forming outside the Brooklyn branch of the Bank of United States after it closed its doors following the crash in 1929.

Following the crash of 1929, a crowd formed outside the Sub-Treasury Building.

Following the crash of 1929, a crowd formed outside the New York Stock Exchange.

The front page of The New York Times between October 28 and November 1, 1929.

President Herbert Hoover holding a meeting with the country’s leading businessmen, including Henry Ford, Andrew Mellon, Pierre du Pont, Alfred P. Sloan Jr., Julius Rosenwald, Clarence Woolley, Walter Teagle, Owen D. Young, Matthew Sloan, E. G. Grace, Myron C. Taylor, Walter Gifford, and Samuel W. Reyburn, on November 21, 1929.

The Empire State Building in 1930 while it was still under construction.

President Franklin D. Roosevelt sits at his desk signing the Glass–Steagall Act into law. Behind him, left to right, stand Senators Alben Barkley, Thomas Gore, and Carter Glass with Comptroller of the Currency J. F. T. O’Connor, Senator William G. McAdoo, Representative Henry B. Steagall, Senator Duncan U. Fletcher, and Representatives Thomas Alan Goldsborough and Robert Luce.

Pierre du Pont and John Jakob Raskob pictured in attendance at the American Liberty League banquet shortly before being charged with tax evasion.

Senator Carter Glass and Ferdinand Pecora shaking hands at the J.P. Morgan Congressional hearing in 1933.

Jack Morgan in the moments before he was called to testify before the Securities and Exchange Commission during the investigation into the collapse of the Whitney firm.

Charles E. Mitchell in 1933 walking on Broadway after being acquitted on two counts of tax evasion following the stock market crash.

From November 29, 1940, Jesse Livermore’s obituary in The New York Times, withheld from the public for a time out of fear that it would cause market reverberations.

ACKNOWLEDGMENTS

A little more than a decade ago, my wife and I went on vacation. Having written about the 2008 financial crisis in Too Big to Fail, I was curious to learn more about what had happened back in 1929. So I bought a half dozen books to read on the trip. I knew the broad strokes but was unfamiliar with many of the underlying forces at work.

Some of the books I read were written nearly a century ago. Others were more recent. All of them offered valuable insights—and yet, when I finished, I found myself wanting to know more: more about the characters, more about the decisions they made, more about how Wall Street and Washington collided during this pivotal moment in history. What began as a passing interest quickly became an obsession, especially as the questions of 1929 began to echo louder in our own time.

A couple of months later, I happened to be on Harvard’s campus to speak to a class and, uncharacteristically, I arrived early. I wandered into Baker Library and asked the archivist if I could look at some of Thomas Lamont’s papers. I was stunned by the wealth of detailed diaries and letters he had kept.

That afternoon in the library, poring over boxes of his archives, convinced me that I might try to do for 1929 what I had done for 2008 in Too Big to Fail—to write a fly-on-the-wall narrative that immerses readers in the moment.

Writing a book often feels like swimming in the ocean by yourself. But I had many life preservers who kept me from drowning over these past eight years.

I owe immense gratitude to the authors and journalists who came before me, uncovering remarkable material that served as my treasure map. (You can find more about their work in the Notes and Sources section.)

So much of my thanks begins with Alix Lerner, who had just completed her PhD in American history at Princeton in 2016. I hardly knew my way around a library when I started. She gave me a tutorial and helped uncover some of the first archival materials about Charles E. Mitchell—including transcripts that allowed me to write the opening scene of this book with a level of granular detail that gave me the confidence to keep going.

Later, Michelle Memran—a spectacular researcher who also worked on Too Big to Fail—helped me locate swaths of archival materials and set up an elaborate database to organize it all.

I took Hugo Lindgren, the former New York Times Magazine editor, to lunch and let him in on the secret of my little project when I was still aimless. He immediately offered smart thoughts on how to approach it. He’s a friend, a terrific sounding board, and a brilliant editor.

As I neared the finish line, I asked my friend Joe Nocera to read the manuscript. He has a magical ability to spot problems—and, more importantly, offer pitch-perfect solutions. Liaquat Ahamed, the Pulitzer Prize–winning author of Lords of Finance, also generously read the manuscript and offered wisdom only someone of his expertise could provide.

Julie Tate, fact-checker extraordinaire, deserves all the praise she receives from every author who works with her—she is unflappable and has eagle eyes. Cameron Peters is a detail-obsessed magician who contributed research and checked and rechecked hundreds of my endnotes and made sure I met my deadlines.

I was fortunate to receive encouragement and wisdom from some of my literary heroes. Walter Isaacson’s friendship and early guidance was priceless. Over lunch, Erik Larson offered a master class in narrative nonfiction writing.

I also need to thank many others who helped along the way—especially some people I never had the chance to meet in person, in part because the pandemic got in the way: Glenna Whitley, an old friend of my wife’s aunt, gave me her time and put me on the right path with some terrific research that was foundational; Matthew Klam, who offered feedback on a very early draft; Avery Erskine, a student at the University of Virginia who searched through Carter Glass’s archives for me when nonstudents weren’t allowed in the library due to COVID; and Patrick Hayes, who dug through William Durant’s papers in Flint, Michigan. I’m also grateful to Gabriel Baumgaertner, Ben Salus, Mia Espino, and Catie Humphreys, whose energy and kindness were infectious; Richard Lambeer, who unexpectedly shared his father’s fascinating memoir from the 1920s; Jared Cohen, for the great little anecdote about Hoover’s vase; and the wonderful librarian at Yale who let me into the stacks when he wasn’t supposed to—you know who you are, and thank you. Tony Marx, president of the New York Public Library, was a mensch, as was his lieutenant, Matthew Kirby.

This voyage would not have happened without Rick Kot, who edited Too Big to Fail and took on this book as his final project before retiring from Viking. The man is a treasure. His dedication and our friendship have meant more to me than I can express. Brian Tart, publisher at Viking, believed in this endeavor from the beginning and put the full muscle of the organization behind it.

Laura Tisdel, who had been Rick’s assistant when Too Big to Fail was published, took the baton after Rick retired and sprinted to the finish. I also must thank Andrea Schulz, Viking’s editor in chief, for her support. And a big thanks to Kim Walker and Laura Stickney, a longtime friend, who both devoted themselves to the British edition. Chelsea Cohen, Tricia Conley, Tess Espinoza, Claire Vaccaro, Meighan Cavanaugh, Dorothy Janick, Mike Brown, Nicole Celli, William Jeffries, Susan VanHecke, Tory Klose, Andy Hafitz, Alicia Cooper, and Laura Ogar in the production department at Viking put the finished book through its paces with fine-tuning and styling notes. The publicity and marketing teams at Viking—Kristina Fazzalaro, Mary Stone, Rebecca Marsh, and Carlos Zayas-Pons—worked around the clock to get the word out.

My literary agent, David McCormick, has been a steady and smart hand throughout. He’s a gem.

I’m deeply grateful to the colleagues I work with every day.

At The New York Times, I owe an enormous thanks to the DealBook team: Michael de la Merced, Bernhard Warner, Sarah Kessler, and Lauren Hirsch—along with Julie Zann and the entire summit crew. I remain profoundly thankful for the support of Joe Kahn, Dean Baquet, Sam Dolnick, Carolyn Ryan, Marc Lacey, Monica Drake, Ellen Pollock, and Meredith Kopit Levien. A special shout-out to two people who shaped the early arc of my journalism career: Glenn Kramon and Stuart Elliott. And I’m especially grateful to A. G. Sulzberger and the entire Sulzberger family.

At CNBC, Squawk Box feels like a Thanksgiving family dinner—just held every morning over breakfast. I’m thankful to my co-hosts, Joe Kernen and Becky Quick, and to our longtime executive producer, Anne Tironi. Jacqueline Corba has been my producer for years, and I’m genuinely indebted to her—as I am to the entire Squawk team of producers and crew who make the show what it is. I’m also grateful for the ongoing trust of KC Sullivan and Mark Lazarus. MSNBC’s Morning Joe crew—Joe Scarborough, Mika Brzezinski, Willie Geist, Jonathan Lemire, and Alex Korson—deserve thanks as well. And my appreciation extends to Brian Roberts, Mike Cavanagh, Adam Miller, Cesar Conde, Libby Leist, and Rebecca Blumenstein.

To my friends and extended family—many of whom endured vacations with me glued to a laptop, weekends spent waiting while I revised chapters, or conversations that always circled back to this book—thank you. There are too many of you to name, and I worry that singling out a few would never do justice to the love and encouragement I’ve felt—not just during the writing of this book but throughout my life.

In the end, it is my family—my wife, Pilar; my children, Henry, Max, and Sydney; my parents, Joan and Larry; my sister, Suzie, her husband, Rob, and their children; and the entire Queen clan—who have been my ultimate support system. You’ve kept me grounded, lifted me up, and borne the greatest brunt of this project. Guys, it’s finally done. I love you more deeply than I could ever find the words to express.

NOTES AND SOURCES

This book is the product of hundreds of sources—private letters, transcripts, oral histories, architectural plans, memoirs, newspaper accounts, corporate filings, and other archives—some of which were recorded contemporaneously and others that were made years or even decades after the moment being described.

I traveled across the United States—as well as to Europe—to visit universities, public and private libraries, museums, and homes that housed the papers and documents that are the basis of this narrative.

Writing an account of such a historical spectacle was a test in amassing detail upon detail about every character, their relationships, and their evolving views of a momentous story they were experiencing in real time. Their own views of their roles in these events, as absolute as they often were as the crisis unfolded, sometimes shifted years later when they were challenged by new facts.

To write this book, I found myself constantly returning to both the journalists of the time and the authors who came later—those who wrote biographies of the individuals of that era, who tried to make sense of the chaos, who pulled the threads together. They served as my guides.

The Day the Bubble Burst by Gordon Thomas and Max Morgan-Witts, Once in Golconda by John Brooks, and John Kenneth Galbraith’s The Great Crash 1929 remain three of the most lucid and essential books about the period. But so, too, is The Hellhound of Wall Street by Michael Perino, which smartly and stylishly reintroduces the Senate investigation that tried—haltingly—to hold Wall Street accountable. Ron Chernow’s The House of Morgan is a towering work that helped frame the contours of financial power. I also relied on Edward Lamont’s The Ambassador from Wall Street for its sharp portrait of Thomas Lamont, and David Farber’s Everybody Ought to Be Rich for the larger-than-life story of John Jakob Raskob. Earl Sparling’s Mystery Men of Wall Street, written in the crash’s immediate aftermath, helped convey how the titans of finance were viewed during their lifetimes.

To understand Herbert Hoover, I drew on Herbert Hoover in the White House by Charles Rappleye, Kenneth Whyte’s elegant and sobering Hoover, and Theodore Joslin’s insider account, Hoover Off the Record, which, while self-protective, is filled with revealing moments of insecurity, anger, and resignation. Eric Rauchway’s Winter War captures the political brinksmanship of the transition from Hoover to Roosevelt with stunning clarity.

Nomi Prins’s All the Presidents’ Bankers traces the intimate entanglements between Washington and Wall Street across a century. It’s a smart, deeply researched book that reminded me how much of financial history is shaped not just by money but by relationships.

For Carter Glass, I relied on Carter Glass by Rixey Smith and Norman Beasley and George Herring’s The Unlikely Reformer, both of which helped explain the contradictions of a man who helped write the rules of modern finance while distrusting almost everything modern.

Understanding William C. Durant required chasing shadows—so much about him was performance. But the most useful window into his mind came from The Dream Maker by Lawrence Gustin. Jesse Livermore proved equally elusive, and I’m grateful to Richard Smitten’s World’s Greatest Stock Trader and Tom Rubython’s Boy Plunger, both of which grappled with the myth and man behind Livermore’s trades.

No book inspired me more in thinking about how to write a story like this—narrative in form, rigorous in research—than Liaquat Ahamed’s Lords of Finance. It frames, with extraordinary clarity, the conversations around reparations, central banks, and the ideological battles of the interwar years—debates that echo into our own time.

Churchill’s time in North America, covered in works like No More Champagne by David Lough and Churchill in North America by Bradley P. Tolppanen, offered insight into the colorful man and how ideas about wealth, debt, and national power were transatlantic in nature.

This book was also shaped by academic work that doesn’t always get the credit it deserves. I’m especially indebted to Alexander Tabarrok’s work on Glass–Steagall and the regulatory landscape, which helped me better understand the complex—and often misunderstood—legacy of financial reform in the wake of the crash. The paper “Charles E. Mitchell: Scapegoat of the Crash,” by Thomas F. Huertas and Joan L. Silverman, added nuance and data to a figure often reduced to caricature.

None of this would have been possible without the extraordinary help of archivists and librarians across the country. I am especially grateful to those at Harvard, Princeton, Yale, Columbia, the University of Virginia, Stanford, the Library of Congress, and the National Archives—all of whom not only opened doors to physical collections but often helped guide me toward files I didn’t know I needed. In many cases, their deep knowledge of forgotten boxes and uncatalogued folders made all the difference.

The papers of Thomas Lamont are housed at Harvard’s Baker Library. Florence Corliss Lamont’s archive resides at Smith College. The University of Virginia is home to the Carter Glass papers. The John Jakob Raskob papers are held at the University of Notre Dame. I relied on the Roosevelt Presidential Library in Hyde Park, New York, for FDR’s early financial thinking. And I’m deeply grateful to the Kettering University Archives in Flint for materials related to Durant and the birth of General Motors. Bernard Baruch’s papers are housed at Princeton University; Russell Cornell Leffingwell’s and Irving Fisher’s papers—both crucial to the story—are at Yale, as is the remarkable Businessweek archive, which offered a unique lens into the financial language of the moment. The Morgan Library—as well as the historical archivists at JPMorganChase and Citigroup (National City)—were very helpful.

I owe a special debt of gratitude to the Federal Reserve Bank of New York. The minutes from the most critical months of 1929 had never been made public, but I formally requested their release. After providing a set of redacted versions, the Fed—after further prompting—chose to release them in full. These were not transcripts, but they were deeply valuable. They confirmed the internal tempo of the moment, added time stamps to key decisions, and provided a grounding that helped verify or challenge the public record. They became one of the clearest anchors for telling this story.

Equally vital—and astonishing in its availability—was the digital archive maintained by the Federal Reserve Bank of St. Louis through its FRASER project. The site itself is a quiet marvel, preserving thousands of pages of overlooked documents, speeches, memos, and financial records from across the Fed system. Among the most revealing were diary entries from Charles Sumner Hamlin, the first governor of the Federal Reserve and a member of the Fed’s board from 1916 to 1936, which gave rare insight into the private mindset of those shaping—and reacting to—the unfolding crisis. These firsthand notes helped confirm, complicate, and contextualize key decisions. I found myself returning to them again and again.

The Center for Research in Security Prices, an affiliate of the University of Chicago, combed its database to provide some of the historical stock prices that are referenced in this volume.

As exacting as I’ve tried to be, I am sure that I have overlooked or forgotten to credit an article, a document, or someone whose work helped illuminate this story. For that, I offer my sincere apologies in advance.

In the endnotes that follow, I’ve tried to directly cite the original source material that I reviewed wherever possible. When multiple authors have used the same quote or covered the same scene, I’ve cited the version that either influenced me most or that I encountered first—though in truth, there are many cases where multiple attributions could have fairly been made.

Many scenes in this book were constructed using multiple sources—often a combination of transcripts, letters, newspaper clippings, and published works—as reflected in the accompanying endnotes. In instances where a single endnote appears near the beginning of a scene or conversation, the cited work is the source drawn upon for the full passage below it. In some cases, language has also been smoothed or updated—“percent,” for example, rather than “per cent”—for readability.

I’ve also included a bibliography at the end of the book, not just to acknowledge those sources but to offer the reader a kind of treasure map—a guide for anyone who wants to go deeper into this remarkable and turbulent period.

NOTES

EPIGRAPH

1. The ordinary human being: George Sylvester Viereck, “What Life Means to Einstein,” Saturday Evening Post, October 26, 1929.

GO TO NOTE REFERENCE IN TEXT

AUTHOR’S NOTE

1. “How did you go bankrupt?”: Ernest Hemingway, The Sun Also Rises (Charles Scribner’s Sons, 1926).

GO TO NOTE REFERENCE IN TEXT

2. “Human history becomes”: H. G. Wells, The Outline of History: Being a Plain History of Life and Mankind (Macmillan Company, 1920).

The full quote: “Civilization is in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.”

GO TO NOTE REFERENCE IN TEXT

PROLOGUE

1. Mitchell strode up the steps: W. F. Wamsley, “The Ruler of the World’s Largest Bank,” New York Times, September 29, 1929.

GO TO NOTE REFERENCE IN TEXT

2. central hall of his: National City is the forerunner to Citigroup. It merged with First National Bank of the City of New York in 1955 and was rebranded as Citibank in 1976. After another series of mergers, it became Citigroup in 1998.

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3. eighty-three-foot ceiling: “City Bank to Move with $50,000,000,” New York Times, December 13, 1908.

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4. doors protecting a safe: “City Bank to Move with $50,000,000,” New York Times.

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5. the largest in the country: Wamsley, “The Ruler of the World’s Largest Bank.”

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6. just past 5:30 p.m.: United States v. Charles E. Mitchell, 32 B.T.A. 1093, 1935 BTA LEXIS 843 (June 1933).

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7. sharp, dizzying drop: Gary Richardson, Alejandro Komai, Michael Gou, and Daniel Park, “Stock Market Crash of 1929,” Federal Reserve History, November 22, 2013.

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8. The darkening downtown streets: “Table of Sunrise/Sunset, Moonrise/Moonset, or Twilight Times for an Entire Year; New York, NY; Rise and Set for the Sun for 1929,” US Naval Observatory Astronomical Applications Department, accessed May 18, 2025.

GO TO NOTE REFERENCE IN TEXT

9. Would the markets even open?: “Exchange Holiday Urged,” New York Times, October 29, 1929.

GO TO NOTE REFERENCE IN TEXT

10. the teller windows: “(Former) National City Bank Building,” New York City Landmarks Preservation Commission, January 12, 1999, https://s-media.nyc.gov/agencies/lpc/lp/1979.pdf.

GO TO NOTE REFERENCE IN TEXT

11. The room was furnished: “Troubles of Mitchell,” Time, November 18, 1929.

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12. whom the press called: Kathleen Day, Broken Bargain: Bankers, Bailouts, and the Struggle to Tame Wall Street (Yale University Press, 2019), 45.

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13. emergency meetings at the Federal Reserve: Helvering v. Mitchell, 303 US 391 (1938).

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14. to confer with Hugh Baker: Helvering v. Mitchell.

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15. “Our portfolio today has been tremendously”: United States v. Charles E. Mitchell, testimony of Hugh B. Baker.

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16. That is unbelievable: United States v. Charles E. Mitchell, testimony of Hugh B. Baker.

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17. a bold acquisition: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times, September 20, 1929.

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18. to pull off the deal: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 81–103.

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19. Corn Exchange shareholders could take $360: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times.

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20. trading at $496 a share: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times.

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21. seventy-one thousand of its own: Huertas and Silverman, “Charles E. Mitchell.”

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22. “knocked over with a feather”: Helvering v. Mitchell.

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23. which cost about $32 million: Helvering v. Mitchell.

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24. “It would be embarrassing”: Helvering v. Mitchell.

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25. A “lack of confidence”: United States v. Charles E. Mitchell.

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26. responsible for originating a quarter: Huertas and Silverman, “Charles E. Mitchell.”

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27. During the Panic of 1907: Frederick Lewis Allen, The Lords of Creation: The History of America’s 1 Percent (Open Road Integrated Media, 1935), 246.

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28. Mitchell had worked behind the cages: Bruce Barton, “Is There Anything Here That Other Men Couldn’t Do?,” American Magazine, February 1923.

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29. He’d built the place: Wamsley, “The Ruler of the World’s Largest Bank.”

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30. the three men piled: Helvering v. Mitchell.

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31. sleeping on the floors: “Weary Runners Nap on Bank’s Marble Floor; Mitchell Orders Chairs Brought for Them,” New York Times, October 31, 1929.

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32. they reviewed the events: Helvering v. Mitchell.

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33. “a perpendicular drop”: Commissioner of Internal Revenue vs. Charles E. Mitchell, trial transcript, vol. 3, part 4.

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34. When Mitchell arrived at his: The Mitchell home, at 934 Fifth Avenue between East Seventy-Fourth and Seventy-Fifth Streets on the Upper East Side of Manhattan, is now the French consulate.

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35. more than a dozen: Craig Mitchell, “I Remember Fifth,” Town & Country, September 1989.

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36. for a formal dinner: James L. Grant, Bernard M. Baruch: The Adventures of a Wall Street Legend (John Wiley & Sons, 1997).

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37. after a sleepless night: Helvering v. Mitchell.

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38. a “setting up” drill: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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39. “No amount of brilliance”: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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40. New York Times front page: “Stock Prices Slump $14,000,000,000 in Nation-Wide Stampede to Unload; Bankers to Support Market Today,” New York Times, October 29, 1929.

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41. the Daily News led with: “Stock Crash 10 Billion Dollars,” New York Daily News, October 29, 1929.

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42. become a lightning rod: “Glass Assails Mitchell for Bank’s Aid to Market, Stocks Up in Buying Rush,” New York Times, March 29, 1929.

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43. had even coined a term: “Business of Nation Unshaken, Declare Treasury Officials,” Philadelphia Inquirer, October 25, 1929.

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44. two drivers on his payroll: Mitchell, “I Remember Fifth.”

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45. “Something must be done”: Helvering v. Mitchell.

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46. “the most devastating day”: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 116.

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47. cars, radios, and dishwashers: Becky Little, “Why the Roaring Twenties Left Many Americans Poorer,” History, March 23, 2021.

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48. starting to sell its vehicles: “Culture of Debt Was Driven by GM,” Marketplace, December 26, 2009.

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49. Sears, Roebuck & Co. offered: “Installment Buying, 1920–1930,” CQ Press, January 1930.

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50. middle-class Americans opened: Gene Smiley and Richard H. Keehn, “Margin Purchases, Brokers’ Loans and the Bull Market of the Twenties,” Business and Economic History 17 (1988): 129–42.

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51. in excess of $100 million: “William C. Durant, Auto Pioneer, Dies,” New York Times, March 19, 1947.

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52. proudly committed to slashing taxes: John Hendrikson, “Budget and Tax Lessons from President Calvin Coolidge,” Calvin Coolidge Presidential Foundation, December 10, 2014.

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53. He was wildly popular: David Greenberg, Calvin Coolidge (Henry Holt and Company, 2006), 57.

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54. Dorothy Parker presided: James R. Gaines, Wit’s End: Days and Nights of the Algonquin Round Table (Harcourt Brace Jovanovich, 1977).

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55. Central Park West: Guide to New York City Landmarks, 3rd ed. (John Wiley & Sons, 2004).

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56. swelled to almost seven million: “1900–1930—Fifteenth Census of the United States: 1930, Population, Volume 6: Families, Table 4,” U.S. Census Bureau, October 8, 2021.

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57. Women were neither welcomed: Paulina Bren, She-Wolves: The Untold History of Women on Wall Street (W. W. Norton & Company, 2024).

On December 28, 1967, Muriel “Mickie” Siebert became the first woman to buy a seat on the NYSE.

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58. according to his son: Arthur Marx, My Life with Groucho (Barricade Books, 1992), 95.

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59. “Look at this, will you?”: Marx, My Life with Groucho, 95.

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60. “this thing is bigger”: Marx, My Life with Groucho, 96.

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61. Groucho was impressed: Marx, My Life with Groucho, 96.

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62. took stock tips: William K. Klingaman, 1929: The Year of the Great Crash (Harper & Row, 1989), 90.

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63. the Goldman Sachs Trading Corporation: “Investment Trust Stock Subscribed, 900,000 Shares of New Goldman Sachs Trading Corp. Priced at 104 Each,” Brooklyn Daily Times, December 7, 1928.

Goldman Sachs, then a private partnership, launched Goldman Sachs Trading Corporation in 1928.

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64. Marx got a phone call: Marx, My Life with Groucho, 125.

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CHAPTER ONE

1. On the chilly, windswept evening: “Morgan and Young Sail with Advisers,” New York Times, February 2, 1929.

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2. designed by the same architects: “Grand Central Grandeur, in the Village,” Village Preservation Blog, January 31, 2013, https://www.villagepreservation.org/2013/01/31/grand-central-grandeur-in-the-village/.

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3. a luxurious, four-funneled: “Giant Cunarder Launched To-Day,” Jersey Journal, April 21, 1913.

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4. Lamont, the distinguished fifty-eight-year-old: “Morgan and Young Sail with Advisers,” New York Times.

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5. Germany was either unwilling: John Maynard Keynes, The Economic Consequences of the Peace (Harcourt, Brace and Howe, 1920).

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6. “Mr. Lamont! Mr. Lamont!”: “Morgan and Young Sail with Advisers,” New York Times.

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7. Lamont effectively ran the bank: “Business: Faith, Bankers & Panic,” Time, November 11, 1929.

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8. Jack made sure to always: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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9. “Mr. Morgan speaks to Mr. Lamont”: Anonymous, The Mirrors of Wall Street (G. P. Putnam’s Sons, 1933).

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10. Jack was also bound for Paris: “Morgan and Young Sail with Advisers,” New York Times.

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11. the so-called House on the Corner: “The House on the Corner,” Wall Street Journal, September 23, 1926.

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12. “Tell him a joke”: “Business: Faith, Bankers & Panic,” Time.

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13. Lamont was especially proud: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993).

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14. “most coveted posts in Wall Street”: “Sons of 3 Partners Enter Morgan Firm,” New York Times, January 1, 1929.

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15. handed out bonus envelopes: Chernow, The House of Morgan.

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16. “Some influences that will serve”: “The Financial Outlook for 1929,” New York Times, January 1, 1929.

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17. “There are basic indications”: Randolph Bartlett, “Portrait of a Year: 1929,” American Mercury, October 1935, 144.

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18. the Lamonts hosted a dinner party: Lamont, The Ambassador from Wall Street, 250–51.

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19. In an after-dinner parlor game: Lamont, The Ambassador from Wall Street, 250–51.

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20. a letter about the evening: Lamont, The Ambassador from Wall Street, 250.

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21. encouraged his four children: Corliss Lamont, The Thomas Lamonts in America (A. S. Barnes, 1971).

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22. he became an editor: “T. W. Lamont Is Dead in Florida,” Harvard Crimson, February 3, 1948.

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23. “The other reporters used to poke”: Thomas William Lamont, Across World Frontiers (Harcourt, Brace and Company, 1951).

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24. to give his new wife: Edward Lamont, The Ambassador from Wall Street, 35.

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25. The legendary Morgan was seventy: “J. P. Morgan’s Life One of Triumphs,” New York Times, April 1, 1913.

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26. “greatest international banking firm”: Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022).

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27. “what the business world considered”: Frederick Lewis Allen, The Lords of Creation: The History of America’s 1 Percent (Open Road Integrated Media, 1935).

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28. Morgan had been attending: Robert F. Bruner, The Panic of 1907: Lessons Learned from the Market’s Perfect Storm (John Wiley & Sons, 2007).

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29. On the evening of Saturday: Chernow, The House of Morgan.

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30. he never forgot the experience: Thomas William Lamont, Across World Frontiers, 36.

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31. he played solitaire and smoked: Bruner, The Panic of 1907, 131.

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32. “The situation must not get”: Thomas William Lamont, Across World Frontiers, 36.

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33. Lamont got a surprise: Edward Lamont, The Ambassador from Wall Street, 41.

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34. “Come over by me”: Thomas William Lamont, Across World Frontiers, 40.

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35. Lamont nodded in agreement: Edward Lamont, The Ambassador from Wall Street, 47; Thomas William Lamont, Across World Frontiers.

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36. By now Thomas and Florence: Lamont was known as a family man, devoted to his wife, Florence, and four children. In 1926, she sent him a letter, suggesting she had discovered he was having an affair: “How could you keep this secret so long? And why didn’t you confide in me? I think I have always been very generous about your lady friends & little peccadilloes, and that I deserved your trust and confidence. And her name is Eleanor too…I feel that I can not have her in the New York house…After all your tender little episodes with Amelia B…I am getting letters of sympathy from every side. Your broken-hearted, Florence.”

At the time, Thomas was vacationing on the island of Nassau. The letter was prompted by the publication of a picture of their daughter, fifteen-year-old Eleanor Lamont, in the New York Times’s Sunday Rotogravure magazine. But it clearly wasn’t the young woman. This Eleanor Lamont was older—Tom’s paramour, perhaps?

The paper had mistakenly printed a portrayal of another woman by an artist who had also painted the younger Eleanor. But the “other woman” was a stranger. Florence had written the letter to her husband in fun, attaching the newspaper article; according to Lamont’s son Corliss “the whole episode remained one of the big family jokes for a long time.”

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37. three sons and a daughter: While Thomas Lamont may have been a great capitalist, his son Corliss grew up to become an avowed socialist. Corliss did not appear to have a falling-out with his father, but he did write a book in 1939 about his views called You Might Like Socialism: A Way of Life for Modern Man.

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38. “Take along a couple of nurses”: Thomas William Lamont, Across World Frontiers.

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39. “the seats of the mighty”: Edward Lamont, The Ambassador from Wall Street, 43.

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40. to bribe journalists and plant stories: Chernow, The House of Morgan.

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41. Through personal letters and lunches: Horn, J.P. Morgan & Co. and the Crisis of Capitalism, 49.

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42. Critics called it “the money trust”: “No Money Trust, Says Morgan Firm; in Statement to Pujo Committee It Denies That 180 Men Control $25,000,000,000,” New York Times, January 25, 1913.

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43. “The great monopoly”: Ray Stannard Baker and William E. Dodd, eds., The Public Papers of Woodrow Wilson, College and State, 2 vols. (Harper & Brothers Publishers, 1925), 307.

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44. The main target: “No Money Trust, Says Morgan Firm,” New York Times.

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45. Lamont convinced Morgan: Chernow, The House of Morgan, 150.

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46. Lamont’s plan was simple: Edward Lamont, The Ambassador from Wall Street, 49.

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47. Lamont returned to Morgan’s library: Edward Lamont, The Ambassador from Wall Street, 50.

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48. Morgan fiercely held his ground: “Testimony of J.P. Morgan Before the Bank and Currency Committee of the House of Representatives, at Washington D.C.,” Library of Congress, December 18 and 19, 1912.

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49. Perhaps the finest distillation: “Testimony of J.P. Morgan Before the Bank and Currency Committee of the House of Representatives, at Washington D.C.”

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50. Morgan died three months later: “J.P. Morgan’s Bier Seen Only by Few,” New York Times, April 13, 1913.

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51. Morgan left instructions for the ceremony: “J.P. Morgan’s Bier Seen Only by Few,” New York Times.

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52. Morgan’s successor as head: Edward Lamont, The Ambassador from Wall Street, 40, 56.

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53. he had been the subject: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University, 855. Lamont told Pecora: “He was always a shy man that avoided public contact as much as possible…. When the younger Morgan was in his teens, an attempt was made to kidnap him. It threw a deep alarm into the whole family, particularly his father, because this was his only son…. From that time on, the younger Morgan was always surrounded by bodyguards, even when he went to college.”

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54. nearly 230 letters and telegrams: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 143, fraser.stlouisfed.org/title/87.

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55. The most audacious: Chernow, The House of Morgan, 307.

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56. With the aid of Morgan partners: “Van Sweringen, Oris Paxton and Mantis James,” Encyclopedia of Cleveland History, accessed May 19, 2025, Case Western Reserve University, case.edu/ech/articles/v/van-sweringen-oris-paxton-and-mantis-james.

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57. Lamont availed himself: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 143, fraser.stlouisfed.org/title/87.

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58. read like a casual friendly note: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 143, fraser.stlouisfed.org/title/87.

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59. Lamont personally dictated the telegrams: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 5, 2521, fraser.stlouisfed.org/title/87.

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60. the only man to have ever: “International: Nothing Resounding,” Time, August 24, 1931; Nomi Prins, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power (Hachette, 2014).

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61. “Car No. 27, Room A”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 5, 2521, fraser.stlouisfed.org/title/87.

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62. the 3,230-passenger ship: “A New Cunarder ‘Aquitania,’ ” Scientific American, June 6, 1914.

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63. balustrade copied from a French château: “Luxury on the Aquitania,” New York Times, March 8, 1914.

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64. At 11 a.m. waiters served consommé: “Artist Steals Ride 1st Class in Aquitania,” New York Herald Tribune, October 19, 1929.

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65. The spacious first-class dining room: “Artist Steals Ride 1st Class in Aquitania,” New York Herald Tribune.

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66. Daily social events included: “Program of Events—RMS Aquitania—September 1929,” Gjenvick-Gjønvik Archives, accessed May 19, 2025, ggarchives.com/OceanTravel/OnboardEvents/Cunard-1929-09-EventsProgram-Aquitania.html.

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67. one other audacious piece of business: Warren Sloat, 1929: America Before the Crash (Macmillan, 1979), 96–97.

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68. Lamont represented ITT: Sloat, 1929, 96.

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69. Lamont now found himself: Chernow, The House of Morgan.

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70. “Long talks with Young”: Thomas W. Lamont Papers, 1894–1948, box 173, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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71. two lengthy cables to his office: Thomas W. Lamont, “Diary of T.W. Lamont,” February 1–7, 1929.

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72. “not very cold, but no sunshine”: Lamont, “Diary of T.W. Lamont.”

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73. After eight days at sea: Lamont Papers, 1894–1948, box 173.

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74. “Had quiet and fairly restful trip”: Lamont, “Diary of T.W. Lamont.”

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75. “Had a wonderfully fine crossing”: Henry Wales, “Morgan Smiles at First Tests as ‘Public Man,’ ” Chicago Tribune, February 9, 1929.

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76. “Plenty of hard work”: Wales, “Morgan Smiles at First Tests as ‘Public Man.’ ”

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CHAPTER TWO

1. his office at 55 Wall Street: “(Former) National City Bank Building,” New York City Landmarks Preservation Commission, January 12, 1999, s-media.nyc.gov/agencies/lpc/lp/1979.pdf.

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2. Charles Mitchell walked three blocks: “Wall Street Breathes Easier After Federal Reserve Board Leaves Rediscount Rate Same,” Associated Press, February 15, 1929.

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3. The structure occupied a full block: “Federal Reserve Bank of New York,” New York City Landmarks Preservation Commission, December 21, 1965, s-media.nyc.gov/agencies/lpc/lp/0054.pdf.

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4. it had just opened in 1924: “Reserve Bank Here Begins Removal,” New York Times, May 30, 1924.

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5. The lowest of the bank’s four: John C. Williams, “The Gold Beneath Our Feet,” speech at Federal Reserve Bank of New York, November 6, 2019.

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6. Mitchell had been appointed: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 100.

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7. the Fed itself was barely fifteen: Albert Kraus, “Reserve System: How It All Began; Wilson Signed Act in ’13 to Halt Monetary Crises,” New York Times, December 7, 1965.

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8. the reality that had emerged: David Wessel, In Fed We Trust: Ben Bernanke’s War on the Great Panic (Crown Business, 2009).

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9. When the Fed was born: Huertas and Silverman, “Charles E. Mitchell,” 81–103.

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10. board of the New York Fed: “Directors and Officers of the Federal Reserve Bank of New York, 1914–1956,” Federal Reserve Bank of New York, fraser.stlouisfed.org/files/docs/historical/brookings/17502_newyork.pdf.

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11. Mitchell owed his ascension: “People: Fed’s Formative Years,” Federal Reserve History, accessed May 19, 2025, federalreservehistory.org/people/feds-formative-years?page=3.

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12. when unemployment jumped: Spencer Howard, “The President’s Conference on Unemployment—1921,” Hoover Heads, National Archives, September 28, 2016, https://hoover.blogs.archives.gov/2016/09/28/the-presidents-conference-on-unemployment-1921/.

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13. In August 1928: Benjamin Strong, letter to Owen Young, August 1928, Papers of Benjamin Strong, Jr., Federal Reserve Bank of St. Louis.

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14. had not always thought so highly: Correspondence with the Federal Reserve Bank of New York: Deputy Governor, James Herbert Case, 1924–1928, Papers of Benjamin Strong, Jr., Federal Reserve Bank of St. Louis, fraser.stlouisfed.org/archival-collection/papers-benjamin-strong-jr-1160/correspondence-federal-reserve-bank-new-york-2210/fulltext.

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15. “Mitchell, as you realize”: Correspondence with the Federal Reserve Bank of New York: Deputy Governor, James Herbert Case, 1924–1928, 166.

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16. “Should he become a director”: Correspondence with the Federal Reserve Bank of New York: Deputy Governor, James Herbert Case, 1924–1928, 166.

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17. “so long as [Mitchell] is”: Correspondence with the Federal Reserve Bank of New York: Deputy Governor, James Herbert Case, 1924–1928, 156.

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18. “to tell him very frankly”: Benjamin Strong, letter to J. H. Case, August 25, 1925, Papers of Benjamin Strong, Jr., Federal Reserve Bank of St. Louis.

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19. Mitchell had celebrated: Charles E. Mitchell, opinion, The Bank Director, January 1929, 12.

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20. issued an advisory: Federal Reserve Board, Federal Reserve Bulletin (U.S. Government Printing Office, February 1929), 94.

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21. Buying on margin was not: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 24–25.

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22. he aggressively extended credit: George T. Hughes, “Stocks’ Recovery Carried Higher in Orderly Trading,” World-News, March 27, 1929.

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23. Margin loans had grown: Galbraith, The Great Crash 1929, 20–21.

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24. they were already using credit: Susan Currell, American Culture in the 1920s (Edinburgh University Press, 2009), 172.

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25. announcement triggered a nosedive: Galbraith, The Great Crash 1929, 33.

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26. George Harrison, the governor: Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022), 93.

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27. “to have the stock market”: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (Penguin Press, 2009); Matthew Josephson, Infidel in the Temple (Alfred A. Knopf, 1967).

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28. issued a formal statement: Minutes from a meeting of the Federal Reserve Board, February 5, 1929, fraser.stlouisfed.org/files/docs/historical/nara/bog_minutes/19290205_Minutes.pdf.

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29. Its tactic here was “moral suasion”: Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation (Penguin Books, 2000), 199.

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30. stock market was so appealing: Galbraith, The Great Crash 1929, 34.

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31. On February 12, a Philadelphia banker: “Warn Banks to Act Against Speculation,” New York Times, February 13, 1929.

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32. So many women had started investing: Eunice Fuller Barnard, “Ladies of the Ticker,” North American Review (Spring 1929).

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33. “Twenty percent of the persons”: “Warn Banks to Act Against Speculation,” New York Times.

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34. prepared to make the case: William K. Klingaman, 1929: The Year of the Great Crash (Harper & Row, 1989), 119.

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35. should raise the discount rate: Klingaman, 1929, 119.

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36. in the ensuing five-hour session: Minutes of the Federal Reserve Bank of New York Board of Directors, February 14, 1929.

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37. “Governor Young advised Governor Harrison”: Minutes of the Federal Reserve Bank of New York Board of Directors, February 14, 1929.

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38. Harrison then emerged: “Reserve Bank Keeps 5% Rate; Brokers Tense,” Holyoke Daily Transcript and Telegram, February 15, 1929.

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39. “I’m sorry, gentlemen”: “Reserve Bank Keeps 5% Rate; Brokers Tense,” Holyoke Daily Transcript and Telegram.

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40. the first to leave the boardroom: “Reserve Bank Keeps 5% Rate; Brokers Tense,” Holyoke Daily Transcript and Telegram.

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41. To the top Ivy League graduates: Frederick Lewis Allen, The Lords of Creation: The History of America’s 1 Percent (Open Road Integrated Media, 1935), 318.

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42. “Look down there”: Bruce Barton, “Is There Anything Here That Other Men Couldn’t Do?,” American Magazine, February 1923.

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43. Up until the 1920s: Kathleen Day, Broken Bargain: Bankers, Bailouts, and the Struggle to Tame Wall Street (Yale University Press, 2019), 41.

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44. “It has always seemed to me”: “Department Stores of Finance,” National Magazine, August 1923.

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45. confidence of a self-made man: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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46. Born in 1877, Mitchell was raised: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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47. his friends voted him “the greatest”: “Mitchell: Court Found Him Innocent; Tax Board, Guilty,” Newsweek, August 17, 1935.

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48. daughter of Colonel William P. Rend: “William P. Rend, Coal Pioneer, Passes Away,” Chicago Tribune, December 1, 1915.

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49. Colonel Rend offered to give: Elizabeth Mitchell, Music with a Feather Duster (Little, Brown and Company, 1941), 62.

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50. “This was exactly in line”: B. C. Forbes, “Career of New President Inspiration to Young Men,” Dayton Daily News, May 5, 1921.

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51. what he referred to as: “The Crash of 1929,” American Experience, aired April 24, 2012, on PBS.

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52. the premier issue: “Revolutionizing Security Selling,” Forbes, September 15, 1917.

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53. “I am fully mindful”: Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010), 79.

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54. “I know what I am up”: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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55. Now in control of both: Nomi Prins, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power (Hachette, 2014), 50, 70.

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56. the first U.S. bank to reach: Prins, All the Presidents’ Bankers.

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57. the five miles between: “C. E. Mitchell Hoping for Comeback,” Hartford Courant, February 13, 1934.

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58. at a blistering pace: W. F. Wamsley, “The Ruler of the World’s Largest Bank,” New York Times, September 29, 1929.

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59. he drove his employees harder: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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60. “I always want to pay more”: Barton, “Is There Anything Here That Other Men Couldn’t Do?”

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61. Mitchell fired him on the spot: Edmund Wilson, Travels in Two Democracies (Harcourt, Brace and Company, 1936), 62.

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62. “as if Attila the Hun”: Edmund Wilson, “Sunshine Charley,” New Republic, June 28, 1933, 176–77.

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63. Mitchell was paid a base salary: Helvering v. Mitchell, 303 US 391 (1938).

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64. threw herself into hosting home musicals: Mitchell, Music with a Feather Duster, 131.

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65. a breathtaking showplace: Lansing Warren, “Vichy Buys the Palatial Mitchell Mansion on Fifth Ave. for Use as Consulate General,” New York Times, March 26, 1942.

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66. a housekeeper, a butler: Craig Mitchell, “I Remember Fifth,” Town & Country, September 1989.

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67. The Mitchells entertained lavishly: Elizabeth Mitchell, Music with a Feather Duster.

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68. known to close the curtains: Craig Mitchell, “I Remember Fifth.” As Craig Mitchell recalled: “Father, alas, hated music; he’d go to the opera, pull the curtains of the box and fall asleep in the cloak section.”

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69. “maybe I’ll be able to catch”: A. St. John, “Men in Wall Street’s Eye: Introducing Mr. Charles E. Mitchell,” Barron’s, March 5, 1923.

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70. “I wish I knew what”: Elizabeth Mitchell, Music with a Feather Duster, 133.

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71. “National City judgment”: Review of Reviews Incorporating the Literary Digest (Funk and Wagnalls, 1928), 62.

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72. “inefficiency and ineptitude”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56 and S. Res. 97: Part 16, 7696, fraser.stlouisfed.org/title/87.

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73. Some tried to warn against: Prins, All the Presidents’ Bankers.

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74. He delisted National City: “Banks Vote to Take Shares from List,” New York Times, January 11, 1928.

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75. At the time, Mitchell suggested: “Move to Stop Speculation in Bank Stocks,” Associated Press, December 10, 1927.

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76. Without the Exchange: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 136.

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77. By January 1929, the stock: Louis Prashker, “Corporation Finance and Bull Markets: Wall Street Under Oath,” St. John’s Law Review 14, no. 1 (November 1939): 75–87.

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78. Volume tended to be light: William Watts, “A Brief History of Trading Hours on Wall Street,” MarketWatch, May 29, 2015; “3:30 Closing Is Set by Stock Exchange,” New York Times, July 18, 1952; “Stock Markets to Extend Hours,” New York Times, September 13, 1974.

The New York Stock Exchange’s regular hours were from 10 a.m. to 3 p.m. on weekdays and from 10 a.m. to noon on Saturdays. Trading on Saturdays was eliminated and the trading day on weekdays was extended to 3:30 p.m. on September 29, 1952. The trading day was extended again, until 4 p.m., in October 1974.

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79. This Saturday was different: “Stocks Break Again as Wall St. Awaits Credit ‘Show-Down,’ ” New York Times, February 17, 1929.

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80. “Many fine reputations have been built”: Joe Nocera, A Piece of the Action: How the Middle Class Joined the Money Class (Simon & Schuster, 2013), 39.

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81. the next day’s edition: “Stocks Break Again as Wall St. Awaits Credit ‘Show-Down,’ ” New York Times.

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82. “gambling wit matched against gambling wit”: John F. Sinclair, “Stock Mart Critic Harsh,” Los Angeles Times, February 14, 1929.

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CHAPTER THREE

1. Later that same afternoon: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 80.

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2. the eight-story Neo-Georgian building: “National Register of Historic Places Registration Form: Hotel Durant, Genesee Co., MI,” National Park Service, January 26, 2009; Lawrence Gustin, Billy Durant: Creator of General Motors (Eerdmans, 1973), 273.

Gustin writes that “[a] portion of the top floor of the Durant Hotel in downtown Flint was planned as a residence for Durant, but he resigned as president of General Motors just before the hotel opened in 1920, and it is believed he never occupied the suite.” However, it appears he did stay in other rooms at the hotel.

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3. half a foot of fresh snow: “Michigan Road Report,” Flint Journal, February 17, 1929.

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4. “You know, W.C. is never happy”: Commerce and Finance (Giant Publishing Company, 1936), 380.

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5. become one of the richest: “William C. Durant, Auto Pioneer, Dies,” New York Times, March 19, 1947.

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6. one of the three telephones: “Troubles of Mitchell,” Time, November 18, 1929.

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7. Durant had spent the past decade: “Durant Argues for Lower Re-Discounts,” Automobile Topics, October 8, 1921.

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8. shift the dynamic in Washington: Thomas and Morgan-Witts, The Day the Bubble Burst.

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9. six years in the White House: Coolidge took office in 1923 after Warren G. Harding’s death of a heart attack; he was reelected in 1924 and subsequently served a full four-year term.

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10. making his own sandwiches: Henry Haller and Virginia Aronson, The White House Family Cookbook (Random House, 1987), 174.

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11. “the Coolidge market”: “Business & Finance: Wall Street,” Time, October 31, 1927.

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12. he had amassed a respectable fortune: “Years of Adventure 1874–1914,” Herbert Hoover Presidential Library and Museum, National Archives, accessed May 19, 2025, https://hoover.archives.gov/exhibits/years-adventure-1874-1914.

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13. he had tried Andrew Mellon: Thomas and Morgan-Witts, The Day the Bubble Burst, 79–81.

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14. he started a company in Flint: Gustin, Billy Durant, 40.

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15. “Look for a self-seller”: Gustin, Billy Durant, 41.

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16. In 1904, Durant acquired: Gustin, Billy Durant, 54.

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17. Durant had a deliberate style: Axel Madsen, The Deal Maker: How William C. Durant Made General Motors (John Wiley & Sons, 1999), 148.

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18. “I cannot hope to find words”: Bernard A. Weisberger, The Dream Maker: William C. Durant, Founder of General Motors (Little, Brown and Company, 1979), 220.

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19. he was also a keen observer: Gustin, Billy Durant, 10–11.

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20. By 1919, GM was a colossus: Gustin, Billy Durant.

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21. Despite his tremendous success: Madsen, The Deal Maker, 132.

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22. Four years later: Gustin, Billy Durant, 214–16.

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23. He bought a magnificent seaside villa: Madsen, The Deal Maker, 168.

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24. “I had never experienced luxury”: Walter P. Chrysler, Life of an American Workman (William E. Rudge’s Sons, 1937), 143.

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25. In New York, Durant: Christopher Gray, “Upstairs, Downstairs, Apartment-Style,” New York Times, April 5, 2012.

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26. Durant loved to bestow on “Muddie”: Weisberger, The Dream Maker, 311.

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27. A fleet of assistants: Weisberger, The Dream Maker, 303.

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28. But as an oft-repeated: Jason Zweig, “Keynes: He Didn’t Say Half of What He Said. Or Did He?,” Wall Street Journal, February 11, 2011. According to the Journal: “In an e-mail in 2003, Keynes’ most authoritative biographer, Lord Robert Skidelsky, told investment advisor William Bernstein that he believed they were ‘both apocryphal.’ This week I asked another renowned expert on Keynes, Donald Moggridge of the University of Toronto, if he could identify the source of either of the oft-quoted remarks. ‘The simple answer,’ Prof. Moggridge replied by e-mail, ‘is there is no evidence.’ ”

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29. when Mitchell got Durant: Thomas and Morgan-Witts, The Day the Bubble Burst.

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CHAPTER FOUR

1. handsome redbrick mansion: “Sheridan–Kalorama Historic District,” Historic Preservation Office, 2000.

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2. a wet, overcast morning: Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920–1933 (Macmillan, 1952), 186.

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3. Hoover was dressed casually: L. C. Speers, “Hoover Enjoys Day; Busy from the Dawn,” New York Times, March 5, 1929.

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4. By one count: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 369.

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5. “at the moment when the strength”: “At the White House,” The Times, March 4, 1929.

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6. Hoover had his usual breakfast: Whyte, Hoover, 368.

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7. “Wall Street’s Hoover Boom is starting”: Arthur Brisbane, “Today,” Evansville Journal, March 2, 1929.

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8. Bertie Charles Forbes echoed the sentiment: B. C. Forbes, “How American Business Has Sized Up Herbert Hoover,” Omaha Morning Bee-News, March 4, 1929.

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9. Coolidge had so relied on: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001).

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10. an “unfaithful public servant”: “Secretary Mellon Assailed in Senate,” Baltimore Sun, March 3, 1929.

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11. The son of a wealthy: John Steele Gordon, The Great Game: The Emergence of Wall Street as a World Power, 1653–2000 (Scribner, 1999), 224.

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12. He was so tied into: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969), 42.

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13. Coolidge never cared much: M. C. Murphy, Calvin Coolidge: The Presidency and Philosophy of a Progressive Conservative (McFarland & Company, Inc., 2003), 202.

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14. Mellon had distinguished himself: Frederick Lewis Allen, The Lords of Creation: The History of America’s 1 Percent (Open Road Integrated Media, 1935), 222.

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15. “the greatest Secretary of the Treasury”: David Cannadine, Mellon: An American Life (Alfred A. Knopf, 2006), 310.

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16. “a symbol of prosperity”: “Hoover’s Heritage,” Collier’s, January 5, 1929.

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17. told journalist Clarence Barron: Clarence Barron, They Told Barron: Conversations and Revelations of an American Pepys in Wall Street, the Notes of the Late Clarence W. Barron (Harper & Brothers, 1930), 263.

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18. Mellon had made no secret: Hoover, The Memoirs of Herbert Hoover, 201.

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19. the first treasury secretary: Arthur Sears Henning, “Hoover to Keep Mellon on Job in His Cabinet,” Chicago Tribune, January 8, 1929.

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20. Hoover repaired to his bedroom: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 59.

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21. Kosta Boris, Hoover’s Serbian valet: Rappleye, Herbert Hoover in the White House, 59.

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22. At about 10:45 a.m.: Speers, “Hoover Enjoys Day; Busy from the Dawn.”

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23. Moses joked as he grasped: Speers, “Hoover Enjoys Day; Busy from the Dawn.”

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24. The Hoovers waited: Whyte, Hoover, 370.

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25. When he finally appeared: William Allen White, A Puritan in Babylon: The Story of Calvin Coolidge (Capricorn Books, 1965), 419.

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26. At one point Hoover seemed: White, A Puritan in Babylon, 325.

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27. He wrote his enigmatic statement: White, A Puritan in Babylon, 366.

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28. “Poppa says there’s a depression coming”: Robert Sobel, Coolidge: An American Enigma (Regnery History, 2015), 373.

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29. with the Ohio primary approaching: Whyte, Hoover, 340.

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30. It was hardly a ringing endorsement: Klein, Rainbow’s End, 140.

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31. efforts to feed starving Belgians: George H. Nash, Kendrick A. Clements, and Glen Jeansonne, The Life of Herbert Hoover: The Humanitarian, 1914–1917 (W.W. Norton, 1983).

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32. his organization of rescue efforts: Bruce A. Lohof, “Herbert Hoover, Spokesman of Humane Efficiency: The Mississippi Flood of 1927,” American Quarterly 22, no. 3 (1970): 690–700.

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33. napping for up to four hours: David Greenberg, Calvin Coolidge (Henry Holt and Company, 2006), 57.

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34. On the day Hoover won: Richard Norton Smith, An Uncommon Man: The Triumph of Herbert Hoover (Simon & Schuster, 1984), 45.

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35. The only advice Coolidge offered: Sobel, Coolidge, 237.

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36. Led by a cavalry escort: Whyte, Hoover, 370.

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37. “I would have given much”: Hiram Johnson, The Diary Letters of Hiram Johnson, 1917–1945 (Garland, 1983), 47.

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38. Coolidge’s mood seemed to lift: Whyte, Hoover, 370.

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39. Among the dignitaries: Eugene Lyon, Herbert Hoover: A Biography (Doubleday & Company, Inc., 1964), 183.

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40. sent someone to look for them: Whyte, Hoover, 370.

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41. Then Coolidge surprised everyone: Whyte, Hoover, 370.

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42. When the new president stepped forward: Whyte, Hoover, 371.

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43. Hoover mopped rain from his face: Bruce Rae, “Crowd Holds Its Ground; Masses in Downpour at Capitol to Watch the Inauguration,” New York Times, March 5, 1929.

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44. one campaign reporter dryly observed: “On the Stump with Two Candidates,” St. Louis Globe-Democrat, October 21, 1928.

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45. Hoover closed his speech: “Inaugural Address of Herbert Hoover, Monday, March 4, 1929,” The Avalon Project, Yale Law School, n.d., https://avalon.law.yale.edu/20th_century/hoover.asp.

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CHAPTER FIVE

1. Livermore assembled a small group: “Rise in Cotton Prices Forecast by Livermore,” New York Herald Tribune, March 5, 1929.

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2. had his life story lightly fictionalized: Edwin Lefèvre, Reminiscences of a Stock Operator: With New Commentary and Insights on the Life and Times of Jesse Livermore, annotated ed., ed. Jon D. Markman (John Wiley & Sons, 2010).

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3. The first tip Livermore gave everyone: Jesse L. Livermore, How to Trade in Stocks: The Livermore Formula for Combining Time Element and Price (Duell, Sloan and Pearce, 1940), 113.

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4. Livermore’s notoriety came with a price: Richard Smitten, Jesse Livermore: World’s Greatest Stock Trader (John Wiley & Sons, 2001), 131.

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5. Passing through the lobby: Smitten, Jesse Livermore, 131.

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6. Livermore’s private office: Smitten, Jesse Livermore, 114.

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7. The invention of stock tickers: Eric Owles, “Wall Street’s Race to the 48-Millisecond Trade,” New York Times DealBook, August 15, 2012.

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8. “The game taught me the game”: Lefèvre, Reminiscences of a Stock Operator.

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9. Because the prices: Smitten, Jesse Livermore, 132.

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10. “In my opinion it would be”: “Rise in Cotton Prices Forecast by Livermore,” New York Herald Tribune.

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11. In its coverage of the meeting: “Rise in Cotton Prices Forecast by Livermore,” New York Herald Tribune.

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12. Born in 1877 on a farm: Smitten, Jesse Livermore, 17.

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13. So he headed west: Smitten, Jesse Livermore, 29–32.

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14. Livermore called the moment: Smitten, Jesse Livermore, 49.

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15. Livermore had an account with Hutton: Smitten, Jesse Livermore, 49–51.

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16. On October 24, 1907: Smitten, Jesse Livermore, 62.

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17. Livermore’s instinct was: Smitten, Jesse Livermore, 64–67.

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18. Over the next few years: Smitten, Jesse Livermore, 75–80.

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19. “Anticipation of coming events”: Robert Sobel, The Big Board: A History of the New York Stock Market (Beard Books Inc., 2000), 246.

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20. son of a Confederate Army surgeon: James Grant, Bernard Baruch: The Adventures of a Wall Street Legend (John Wiley & Sons, 1997).

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21. When the two men encountered: Smitten, Jesse Livermore, 28.

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22. The New York Times ran: W. F. Wamsley, “The Magnet of Dancing Stock Prices,” New York Times, March 24, 1929.

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23. “The fact of the matter”: “Review of the Week,” Liverpool Daily Post, March 23, 1929.

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24. “Go, go, go!”: Tom Rubython, Jesse Livermore Boy Plunger: The Man Who Sold America Short in 1929 (The Myrtle Press, 2015), 300.

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CHAPTER SIX

1. a series of parties: “Patio Marguery,” Palm Beach Post, March 9, 1929; “Two Hundred and More Guests Pass in Review for Judges,” Palm Beach Post, March 8, 1929; Nancy Randolph, “They’re Being Chased at Palm Beach More Than Ever in History,” Daily News, March 17, 1929.

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2. had announced that week: “Fox in Talkies Only; Signs 200 Show Folk,” New York Times, March 25, 1929.

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3. as the Fed met again: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001), 178.

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4. beating all previous records: “Business & Finance: Crash,” Time, April 1, 1929.

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5. unable to keep up: Klein, Rainbow’s End, 178.

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6. the New York Stock Exchange decided: “Simmons to Stay as Exchange Head,” New York Times, March 26, 1929.

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7. headed toward a historic disaster: Klein, Rainbow’s End, 178.

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8. Mitchell had taken part in: Minutes of the Federal Reserve Bank of New York Executive Committee, March 25, 1929.

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9. Just weeks earlier: Minutes of the Federal Reserve Bank of New York Board of Directors, February 21, 1929.

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10. The call rate had leaped: John F. Sinclair, “Most Tragic Stock Market Session in Recent Years,” Boston Globe, March 27, 1929.

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11. “A landslide of selling”: Claude A. Jagger, “Record Turnover on New York Stock Market,” Associated Press, March 27, 1929.

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12. Especially in a “panicky” moment: Charles S. Hamlin diaries, box 10, volume 16, reel 4, March 23–November 1, 1929.

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13. which The Boston Globe described: Sinclair, “Most Tragic Stock Market Session in Recent Years.”

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14. “From the nadir of despair”: Elliott V. Bell, “National City Throws In Funds to Avert Money Market Crisis,” New York Herald Tribune, March 27, 1929.

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15. A young financial reporter: Hanson W. Baldwin and Shepard Stone, eds., We Saw It Happen: The News Behind the News That’s Fit to Print (Simon & Schuster, 1938).

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16. “So far as this institution”: Bell, “National City Throws In Funds to Avert Money Market Crisis.”

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17. “dynamite in a sentence”: Hanson and Stone, eds., We Saw It Happen.

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18. The price for call money: “Stocks Rally Vigorously as Bankers Aid Market; All Needed Funds Ready,” New York Times, March 28, 1929.

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19. “Such a situation”: “Stocks Rally Vigorously as Bankers Aid Market; All Needed Funds Ready,” New York Times.

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20. In the bank’s newsletter: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954.

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21. “telephoned from New York”: Charles S. Hamlin diaries, box 10, volume 16, reel 4, March 23–November 1, 1929.

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CHAPTER SEVEN

1. Thomas Lamont had just arrived: Thomas W. Lamont Papers, 1894–1948, box 173, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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2. gotten wind of the secret deal: “R.C.A. Traffic Units Bought by I.T.&T. for World System,” New York Herald Tribune, March 29, 1929.

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3. New York Times front-page headline: “Radio Subsidiary Sold for $100,000,000,” New York Times, March 29, 1929.

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4. had left Paris with his family: Lamont Papers, 1894–1948, box 173.

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5. worked “like a beaver”: Lamont Papers, 1894–1948, box 173.

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6. After its invention in 1895: “Inventor’s Life Devoted to Perfecting His Uses of Radio Waves,” New York Times, July 21, 1937.

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7. “has helped to create”: Warren Sloat, 1929: America Before the Crash (Macmillan, 1979), 104.

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8. One major obstacle to the deal: Sloat, 1929, 96–97.

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9. RCA’s recent run-up: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 121–22.

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10. Meehan had signed: Thomas and Morgan-Witts, The Day the Bubble Burst, 122.

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11. “RCA to extend activity abroad”: “RCA to Extend Activity Abroad,” Wall Street Journal, March 9, 1929.

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12. The stock bumped to 92: Thomas and Morgan-Witts, The Day the Bubble Burst, 122.

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13. a financial column: Thomas and Morgan-Witts, The Day the Bubble Burst, 122.

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14. By Wednesday, The Wall Street Journal: “Abrupt Changes: Prices Blow Hot and Cold on Credit Rumors—Money 7%,” Wall Street Journal, March 12, 1929.

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15. Meehan’s crew made a net profit: Thomas and Morgan-Witts, The Day the Bubble Burst, 129–30.

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16. the J.P. Morgan office cabled: Lamont Papers, 1894–1948, box 108.

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17. Still, Lamont was restless: Lamont Papers, 1894–1948, box 173.

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18. The first headline was: “Glass Assails Mitchell for Bank’s Aid to Market; Stocks Up in Buying Rush,” New York Times, March 29, 1929.

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19. “The stock market will not have”: Thomas W. Lamont, letter to Russell Cornell Leffingwell, March 21, 1929, Lamont Papers, 1894–1948, box 103, folder 13.

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20. The second story: Edwin L. James, “Young Asks Schacht to Make Debt Offer Without More Ado,” New York Times, March 29, 1929.

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21. “During our vacation”: James, “Young Asks Schacht to Make Debt Offer Without More Ado.”

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CHAPTER EIGHT

1. it was his weak heart: “Carter Glass, 88, Dies in Capital,” New York Times, May 29, 1946.

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2. his chronic indigestion: Ellen Welch, “Senator Carter Glass 1858–1946: The Good and the Bad,” Albert and Shirley Small Special Collections Library at the University of Virginia Library, September 1, 2021.

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3. The first was segregation: Welch, “Senator Carter Glass 1858–1946.”

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4. “exactly what we propose”: Statement of the Honorable Carter Glass, Virginia Constitutional Convention 1901–1902, Proceedings and Debates, Carter Glass Papers, University of Virginia, Charlottesville, VA.

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5. Glass said in an interview: “Senator Glass on the 14th, 15th, and 18th Amendments,” Daily Press, April 24, 1928.

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6. “Few men in public or private”: Russell C. Leffingwell, letter to Carter Glass, April 1, 1929, Carter Glass Papers.

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7. eyes glaring from beneath: Oliver P. Newman, “A Political Paradox from Virginia,” Baltimore Sun, April 10, 1932.

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8. Mitchell’s decision to bolster: “Congress Inquiry Likely into Stock Speculation; Mitchell Explains Stand,” New York Times, March 30, 1929.

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9. Because of his sickly nature: Welch, “Senator Carter Glass 1858–1946.”

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10. His weapon of choice: James E. Palmer Jr., Carter Glass: Unreconstructed Rebel (Institute of American Biography, 1938).

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11. from the Raleigh Hotel: Charles S. Hamlin diaries, box 10, volume 16, reel 4, March 23–November 1, 1929.

As Hamlin recorded in his diary on April 5, 1929: “I was to see [Glass] at Raleigh hotel. He said he had finished up his tests at Johns Hopkins hospital; that his teeth were badly infected and that he had gall stones. He said he was in a very strained, nervous condition and Dr. Barker said he must spend a month in the hospital. He was very depressed.”

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12. “It has seemed to me that”: Carter Glass, letter to Russell C. Leffingwell, April 5, 1929, Carter Glass Papers.

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13. Carter Glass had just: “In Stock Row,” South Bend Tribune, April 5, 1929.

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14. a town of about seven thousand people: Fourteenth Census of the United States; State Compendium: Virginia (U.S. Government Printing Office, 1925).

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15. The youngest of five children: Rixey Smith and Norman Beasley, Carter Glass: A Biography (Longmans, Green and Co., 1939), 8.

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16. he lost his mother: Palmer Jr., Carter Glass, 16, 17.

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17. His older sister, Nannie: Palmer Jr., Carter Glass, 16, 17.

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18. served as an officer: Bernard S. Katz, Biographical Dictionary of the United States Secretaries of the Treasury, 1789–1995 (Greenwood Press, 1996).

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19. His earliest memory: Matthew P. Fink, The Unlikely Reformer: Carter Glass and Financial Regulation (George Mason University, 2019), 7.

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20. Two years later, in Lynchburg: Fink, The Unlikely Reformer, 7.

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21. not even a high school education: Palmer Jr., Carter Glass, 22.

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22. When first elected: Palmer Jr., Carter Glass, 52.

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23. In his maiden speech: Edward L. Morris, Wall Streeters: The Creators and Corruptors of American Finance (Columbia University Press, 2015), 40.

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24. Glass later recommended Lamont: Smith and Beasley, Carter Glass, 160–61; Carter Glass Papers.

In a January 1919 telegram to Wilson, Glass wrote, “I have concluded to ask your approval also of sending Thomas W. Lamont of New York. He would be particularly useful in connection with the armistice discussions at Spa. You know he is a member of the firm of J. P. Morgan and Company and the owner of the New York Evening Post. The armistice discussions, it seems to me, are likely to involve the whole economic and financial problem of Germany. The British, the French and the Germans will doubtless be represented by their strongest financial men.”

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25. Glass was appointed chairman: Genevieve Podleski and David C. Wheelock, “Carter Glass,” Federal Reserve History, September 13, 2021.

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26. an elite group of bankers: Gary Richardson and Jessie Romero, “The Meeting at Jekyll Island,” Federal Reserve History, December 4, 2015.

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27. He wrote a bill: Carter Glass, “Mr. Warburg and the Bank: A Reply to Prof. Seligman on the Paternity of the Federal Reserve,” New York Times, February 15, 1927.

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28. Glass’s refusal to submit: Podleski and Wheelock, “Carter Glass.”

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29. the same year he was appointed: Podleski and Wheelock, “Carter Glass.”

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30. potential Democratic presidential candidate: “Davis, Glass, Simmons and Harrison Put Before Convention,” New York Times, July 2, 1920.

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31. he published a self-congratulatory memoir: Carter Glass, An Adventure in Constructive Finance (Doubleday, Page & Company, 1927).

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32. Glass was an enigma: Oliver P. Newman, “A Political Paradox from Virginia,” Baltimore Sun, April 10, 1932.

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33. emerged from the right corner: Newman, “A Political Paradox from Virginia.”

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34. “He did all that”: S. J. Woolf, “Carter Glass Still Plays Rebel Role,” New York Times, May 13, 1934.

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35. “I unhesitatingly declare”: “Money Situation Primary Topic at National Capital,” The News & Observer, April 3, 1929.

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36. “slapped the board in the face”: “Congress Inquiry Likely into Stock Speculation; Mitchell Explains Stand,” New York Times, March 30, 1929.

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CHAPTER NINE

1. He arrived by train: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 138–40.

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2. going to the White House: The meeting between Durant and Hoover was described by Durant to both The New York Times and to Earl Sparling in the fall of 1929. Sparling included the anecdote in an article and in his book Mystery Men. The New York Times wrote about Durant’s telling of the visit and also included the anecdote in his obituary.

However, it is worth noting there is no direct confirmation—nor does it appear it was ever sought contemporaneously—from Hoover or the White House. The meeting does not appear on any White House schedule or log, though, given the way the meeting came about, as described by Durant, it is unclear that it would be. John Kenneth Galbraith mentioned the meeting in his book The Great Crash 1929 but noted in citing Sparling that “[t]he authority is dubious, although the author’s facts, as distinct from his interpretation, are frequently accurate.”

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3. “Won’t you please bring”: Mabel Walker Willebrandt, letter to Lawrence Richey, April 4, 1929, Herbert Hoover Presidential Library and Museum.

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4. “Senator Glass probably is not aware”: “Durant Answers Glass,” Covington Virginian, April 4, 1929.

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5. “Some members of the Senate”: “Mitchell’s Loan Splits Opinions,” Atlanta Constitution, March 31, 1929.

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6. Glass and the Fed: Joseph Stagg Lawrence, Wall Street and Washington (Princeton University Press, 1929), v.

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7. “Some hardened Wall Streeters”: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 40.

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8. “I believe it would be”: “Williams Attacks Glass, Congratulates Mitchell,” News and Advance, April 2, 1929.

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9. “We have had testimony”: “Congress Inquiry Likely into Stock Speculation,” New York Times, March 30, 1929.

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10. threw his weight behind Glass: “Congress Inquiry Likely into Stock Speculation,” New York Times.

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11. in his annual report: “Reserve Policy Hit by Warburg,” Wall Street Journal, March 8, 1929.

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12. “sandbagging American prosperity”: Maury Klein, “The Stock Market Crash of 1929,” Business History Review 75, no. 2 (Summer 2001): 325–51.

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13. As his friend: Gary Hoover, “Workingman’s Friend, Industry Disruptor: The Walter Chrysler Story,” American Business History, June 11, 2020.

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14. slipped out of the hotel: Thomas and Morgan-Witts, The Day the Bubble Burst, 139–40.

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15. “I preferred to let American institutions”: Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920–1933 (Macmillan, 1952), 1880.

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CHAPTER TEN

1. enjoyed the finest hotel services: “The Lost Ritz-Carlton Hotel—370-384 Madison Avenue,” Daytonian in Manhattan, July 8, 2024.

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2. With enough discretion: Frank R. Kent, “Charley Michelson,” Scribner’s Magazine, September 30, 1930. As Kent wrote: “What happened was this—Mr. John J. Raskob, chairman of the Democratic National Committee, became impressed with the idea that what the Democratic party needed to give it better than a fighting chance in a presidential election was a little life between campaigns.”

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3. “the organizing genius”: Samuel Crowther, “John. J. Raskob, and the World’s Largest Business,” World’s Work, October 1920.

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4. Known to friends: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013), 38.

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5. he started his career: Farber, Everybody Ought to Be Rich, 2.

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6. Then, like so many others: Farber, Everybody Ought to Be Rich, 4, 38.

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7. “I was raised”: “Management—Ambition—Initiative,” Philadelphia Inquirer, March 31, 1929.

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8. “our second billionaire”: “Henry Ford at Work. Our Second Billionaire,” World’s Work, April 1929.

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9. Prior to the election: Roger Butterfield, ed., Saturday Evening Post Treasury (Simon & Schuster, 1970), 359.

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10. “an awful crank”: Robert A. Slayton, Empire Statesman: The Rise and Redemption of Al Smith (Free Press, 2001), 266.

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11. self-made hero of American business: Farber, Everybody Ought to Be Rich.

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12. he told a journalist: Farber, Everybody Ought to Be Rich, 251.

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13. Two million shares traded hands: Farber, Everybody Ought to Be Rich, 251.

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14. The two men had become friends: Farber, Everybody Ought to Be Rich, 228.

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15. “Business, big or little”: “Raskob’s Statement Causes Stocks to Rise,” News Journal, June 27, 1928.

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16. Stocks perked up the next day: “Stocks Up in ‘Smith Market’ as Raskob Tells Business It Need Not Fear the Governor,” New York Times, June 27, 1928.

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17. he gave the governor a gift: Farber, Everybody Ought to Be Rich, 228.

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18. Feeling indebted to Raskob: Farber, Everybody Ought to Be Rich, 233.

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19. A few days after their conversation: Farber, Everybody Ought to Be Rich, 233–35.

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20. he was formally elected: W. A. Warn, “Raskob Elected Chairman, Stresses Dry Law Change as Big Democratic Issue; Smith’s Personal Choice,” New York Times, July 12, 1928.

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21. “an actual contempt”: David Burner, Herbert Hoover: A Public Life (Alfred A. Knopf, 1979).

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22. a “grave mistake”: Arthur M. Schlesinger Jr., The Age of Roosevelt: The Crisis of the Old Order, 1919–1933 (Houghton Mifflin Company, 1957), 127.

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23. Raskob also made a critical blunder: Farber, Everybody Ought to Be Rich, 237–38.

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24. It had been his plan: “Raskob Quits Post in General Motors to Appease Critics,” New York Times, July 25, 1928.

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25. After a week of turmoil: “Raskob Quits Post in General Motors to Appease Critics,” New York Times; Farber, Everybody Ought to Be Rich, 241.

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26. Raskob quickly sold: Farber, Everybody Ought to Be Rich, 241.

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27. Under direct fire: Farber, Everybody Ought to Be Rich, 249, 253.

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28. “It is a cardinal rule”: “Chairmen Who Talk,” New York Times, September 3, 1928.

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29. In September, Raskob predicted: “National Affairs: Raskob’s Rainbow,” Time, September 10, 1928.

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30. He later upped his forecast: “Raskob Says Smith Will Win 37 States,” New York Times, November 4, 1928.

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31. Smith took just 41 percent: Richard V. Oulahan, “Hoover Wins All but Eight States, Thanks Nation; Smith Out of Politics; Roosevelt Claims His Victory by 28,959,” New York Times, November 8, 1928.

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32. failing to carry: “Hoover Wins 407 to 69; Doubtful 55; Smith Loses State; South Broken; Roosevelt Is Elected Governor,” New York Times, November 7, 1928.

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33. “In accordance with democratic principles”: Thomas Wrigley, “Solid South Broken, New York Captured by G.O.P. Candidate,” Washington Herald, November 7, 1928.

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34. At a January meeting: W. A. Warn, “Raskob in Parley with Roosevelt,” New York Times, January 16, 1929.

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35. He had two Cadillacs: Earl Sparling, Mystery Men of Wall Street: The Powers Behind the Market (Greenberg, 1930).

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36. He intended to raise money: “Democrats Study Plans of Clearing $1,300,000 Debt,” News Journal, April 20, 1929.

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37. “have an active headquarters”: “Democrats Shy About $1,300,000; Raskob Seeks Means to Pay Party’s Deficit,” Spokesman-Review, April 20, 1929.

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38. $1.3 million in debt: “Democrats Study Plans of Clearing $1,300,000 Debt,” News Journal.

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39. Its primary creditor was: Farber, Everybody Ought to Be Rich, 271.

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40. the likes of Herbert H. Lehman: Farber, Everybody Ought to Be Rich, 251.

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41. even Arthur H. Sulzberger: Arthur Hays Sulzberger would go on to be the publisher of The New York Times from 1935 to 1961; his great-grandson A. G. Sulzberger is now publisher.

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42. “When the underwriters”: Bernard M. Baruch Papers, Princeton University Library, Princeton, NJ.

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CHAPTER ELEVEN

1. Durant arrived at Steinway Hall: “W. C. Durant Demands Reserve Board Keep Hands Off Business,” New York Times, April 15, 1929.

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2. Paley had just purchased WABC: “WABC Joins Columbia Radio Chain Hookup,” Daily Item, December 29, 1928.

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3. “I understand he prefers”: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 117.

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4. “In this peaceful country”: “W. C. Durant Demands Reserve Board Keep Hands Off Business,” New York Times.

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5. “authorized, approved, and caused”: “W. C. Durant Demands Reserve Board Keep Hands Off Business,” New York Times.

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6. Durant arranged for a copy: Edwin J. Clapp, letter to Lawrence Richey, April 20, 1930, Herbert Hoover Presidential Library and Museum.

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7. Five days later: Axel Madsen, The Deal Maker: How William C. Durant Made General Motors (John Wiley & Sons, 1999), 252.

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8. “When men like Durant”: “Couzens Denounces Federal Reserve Board for ‘Dumbness’ in Delaying,” Baltimore Sun, June 5, 1929.

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9. One of the wealthiest men: Bill Bryson, One Summer: America, 1927 (Doubleday & Company, Inc., 2013), 237.

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10. “has lured more innocent”: “Debate in Senate on Smoot-Hawley Bill to Provide for Issuance of Short Term Non-Interest Bearing Tax Exempt Treasury Bills—Senators Glass, Couzens and Others Attack Federal Reserve’s Policy Anent Speculation—Stock Tax Proposed as Rider to Tariff Bill,” Commercial & Financial Chronicle, June 8, 1929.

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11. “The gamblers have run away with”: “Debate in Senate on Smoot-Hawley Bill to Provide for Issuance of Short Term Non-Interest Bearing Tax Exempt Treasury Bills,” Commercial & Financial Chronicle.

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12. considered “economic insanity”: “Senator Glass Hotly Assails Hoover Regime,” Buffalo News, November 2, 1932.

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13. “constitutes moral insensibility”: “Senator Glass Hotly Assails Hoover Regime,” Buffalo News.

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CHAPTER TWELVE

1. “Go ahead and do things”: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013), 16. The full statement read: “Go ahead and do things, the bigger the better, if your fundamentals are sound. Avoid procrastination. Do not quibble for an hour over things that might be decided in minutes. However, if the issue at stake is large, stay as long as the next man, but go ahead and do things.”

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2. already managed to knock $750,000 off: “Political Notes: Democratic Doings,” Time, May 13, 1929.

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3. And he tapped Jouett Shouse: “Political Notes: Democratic Doings,” Time.

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4. the Daily Press wrote: “Smith and Raskob Out, Tucker Tells Valley Democrats,” Daily Press, May 8, 1929.

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5. a New York Evening Post article: “Raskob Proposes Trust to Build Up Workers’ Wealth,” New York Evening Post, May 6, 1929.

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6. the ceiling was punctuated: “New York Central Building/Now Helmsley Building,” New York City Landmarks Preservation Commission, March 31, 1977, s-media.nyc.gov/agencies/lpc/lp/1298.pdf.

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7. When the crowd of journalists: “Raskob Would Aid Small Investor,” Boston Globe, May 7, 1929.

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8. Raskob said that the company: “Mr. Raskob’s ‘Poor Man’s Investment Trust,’ ” Literary Digest, June 1, 1929.

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9. “Say a wage earner”: “Mr. Raskob’s ‘Poor Man’s Investment Trust,’ ” Literary Digest.

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10. The plan, he touted: “Vast Raskob Company to Invest for Workers,” Holyoke Telegram, May 7, 1929.

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11. “It has been my observation”: “Vast Raskob Company to Invest for Workers,” Holyoke Telegram.

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12. Raskob understood that debt: “Vast Raskob Company to Invest for Workers,” Holyoke Telegram.

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13. “all the man”: “Mr. Raskob’s ‘Poor Man’s Investment Trust,’ ” Literary Digest.

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14. “I have heard some opinions”: “Raskob Will Help Workers to Invest,” New York Times, May 7, 1929.

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15. “Who in hell is Charley Michelson”: Charles Michelson, The Ghost Talks (G. P. Putnam’s Sons, 1944), 16.

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16. a journalist celebrated for his: Thomas F. Schwartz, “Charles Michelson’s Campaign Against Herbert Hoover,” Hoover Heads, National Archives, August 4, 2021.

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17. Raskob offered him: Frank R. Kent, “Charley Michelson,” Scribner’s Magazine, September 30, 1930.

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18. One of his first journalism jobs: Michelson, The Ghost Talks, 81–86.

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19. tried to reenter Cuba: Michelson, The Ghost Talks, 88.

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20. Michelson worked for the Examiner: Michelson, The Ghost Talks, 98.

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21. After a brief but lucrative job: Michelson, The Ghost Talks, 88.

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22. Raskob stepped aside: Michelson, The Ghost Talks, 16. Michelson would later deny news reports about his role: “I am afraid that this drab recital does not fit into the picture so industriously circulated later on, of a careful conspiracy, worked out in its utmost details between the Democratic chairman and the publicity director, to ‘smear Hoover’ and destroy the President’s prestige.”

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23. “like a fireman to a fire”: Kent, “Charley Michelson.”

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CHAPTER THIRTEEN

1. “All breathe sigh of relief”: Thomas W. Lamont Papers, 1894–1948, box 173, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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2. As a testament: “Young Plan Is Climax of 10 Years’ Parleys,” New York Times, June 5, 1929.

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3. “If Hell is anything like Paris”: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001), 6.

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4. Lamont’s wife, Florence: “These Americans,” New Yorker, July 13, 1929.

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5. The negotiations had taken place: May Birkhead, “Cold Snap Curbs Paris Social Life,” New York Times, February 17, 1929.

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6. journalist Sisley Huddleston: Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022), 83.

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7. “in a terrible gloom”: Lamont Papers, 1894–1948, box 27.

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8. Exasperated with Schacht’s obstinacy: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 258–60.

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9. asked to prepare a message: Eugene Lyons, David Sarnoff: A Biography (Harper & Row, 1966), 150–54.

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10. On the train from Cherbourg: Lyons, David Sarnoff, 149–50.

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11. Lamont believed that Sarnoff: Lyons, David Sarnoff, 149–50.

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12. Sarnoff and Schacht met: Lyons, David Sarnoff, 150–54.

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13. “If anyone can do this job”: Lyons, David Sarnoff, 150.

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14. One evening Schacht arrived: Lyons, David Sarnoff, 181–82.

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15. There was no racial prejudice: Lyons, David Sarnoff, 181.

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16. praised the group in an editorial: Lamont, The Ambassador from Wall Street, 258.

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17. On the journey home aboard: Lamont Papers, 1894–1948, box 173.

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18. He sent thank-you notes: Lyons, David Sarnoff, 153.

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19. But when New York City mayor: Lamont Papers, 1894–1948, box 173.

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20. In a letter he sent: Lamont Papers, 1894–1948.

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CHAPTER FOURTEEN

1. Charles Mitchell walked up: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 204–5.

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2. When Mitchell and Durant entered: Thomas and Morgan-Witts, The Day the Bubble Burst, 206.

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3. her clients paid her: The American Photo Engraver (International Photo Engravers’ Union of North America, 1930), 432.

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4. She followed what she called: “Evangeline Adams, Astrologer, Dead,” New York Times, November 11, 1932.

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5. Adams was taken seriously enough: Charles Willis Thompson, “Don’t Blame Your Parents for the Way You Look,” New York Times Book Review, January 29, 1928.

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6. Adams haughtily replied: Thomas and Morgan-Witts, The Day the Bubble Burst, 206.

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7. Durant had just returned: William C. Durant, “Power of Federal Reserve Board Criticized,” The Morning Call, June 28, 1929.

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8. “Before I left Paris recently”: Durant, “Power of Federal Reserve Board Criticized.”

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9. Mitchell and Durant nodded: Thomas and Morgan-Witts, The Day the Bubble Burst, 206.

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10. Both pools had been managed: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), fraser.stlouisfed.org/title/87.

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11. National City’s balance sheet: Thomas and Morgan-Witts, The Day the Bubble Burst, 207–9.

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12. Raskob, for his part: Samuel Crowther, “Everybody Ought to Be Rich,” Ladies’ Home Journal, August 1929; Thomas and Morgan-Witts, The Day the Bubble Burst, 206.

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13. “The way to wealth”: Crowther, “Everybody Ought to Be Rich.”

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14. “This plan of equity investments”: Crowther, “Everybody Ought to Be Rich.”

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15. Crowther called Raskob: Crowther, “Everybody Ought to Be Rich.”

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16. “This is the greatest vision”: “Mr. Raskob’s ‘Poor Man’s Investment Trust,’ ” Literary Digest, June 1, 1929.

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17. When a female reporter: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013), 257.

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18. Still, Raskob was well aware: Thomas and Morgan-Witts, The Day the Bubble Burst, 207.

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19. He had quietly been shorting: Farber, Everybody Ought to Be Rich, 269.

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20. Newspapers had invoked: “Senators Attack ‘Stock Gambling’; Curb Is Demanded,” Philadelphia Inquirer, June 5, 1929.

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21. It called for a 5 percent: Congressional Record of the Senate, U.S. Congress, June 18, 1929, www.congress.gov/71/crecb/1929/06/18/GPO-CRECB-1929-pt3-v71-12.pdf.

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22. “Let me say, in a word”: Congressional Record of the Senate, U.S. Congress, June 18, 1929.

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23. the Dow had rocketed: Phyllis S. Pearce, The Dow Jones Averages, 1885–1995 (Irwin Professional Pub., 1996), 21.

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24. “he had lined up”: Charles W. Storm, “Public Interest in Market Seen at Lowest Ebb,” Bayonne Times, June 20, 1929.

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25. But on July 17, Livermore: “J.L. Livermore Sued,” New York Times, July 18, 1929.

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26. The most outrageous suit: “93 Sue for $1,450,000 in Boca Raton Crash,” New York Times, April 5, 1929.

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27. the Mizners were running a scam: “$1,450,000 Suit Against Florida Land Promoters,” Brooklyn Eagle, April 4, 1929.

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28. one of the lengthiest complaints: “93 Sue for $1,450,000 in Boca Raton Crash,” New York Times, April 5, 1929.

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29. “He is more inclined to sit”: Storm, “Public Interest in Market Seen at Lowest Ebb.”

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30. When they glimpsed Mitchell: Thomas and Morgan-Witts, The Day the Bubble Burst, 247–48.

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31. who handled the mechanics: Thomas Fleming, “Good-bye to Everything!,” American Heritage, August 1965.

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32. He could also glance up: Jason M. Barr, Building the Skyline: The Birth and Growth of Manhattan’s Skyscrapers (Oxford University Press, 2016), 364.

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33. had just moved into the building: “The Chase National Bank Announces That It Is Now Located in Its Own Building,” Brooklyn Eagle, August 27, 1928.

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34. “Albert the Munificent”: James McMullin, “National Whirligig,” Palm Beach Post, December 29, 1932.

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35. a prize he’d coveted: “Unequivocally Deny Bank Merger Rumor,” New York Times, February 15, 1926.

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36. the biggest in the world: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times, September 20, 1929.

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37. in Lynchburg to write letters: Carter Glass Papers, box 117, folder 8, University of Virginia, Charlottesville, VA.

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38. say that he preferred: Rixey Smith and Norman Beasley, Carter Glass: A Biography (Longmans, Green and Co., 1939), 196.

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39. He continued to focus his ire: Smith and Beasley, Carter Glass, 290.

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40. That month, The New York Times: Carter Glass, “Stock Gambling,” New York Times, August 21, 1929.

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41. Everywhere, it seemed: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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42. at Forty-Sixth Street on the Hudson: “Barnitt to Reach City Late Today,” Paterson Evening News, August 12, 1929.

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43. the first oceangoing: “Stock Trading Begins on the Leviathan,” New York Times, August 18, 1929.

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44. a bit of family lore: Jean Strouse, Morgan: American Financier (Random House, 2014), 206.

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45. The journalists who had gathered: “Al Smith Will Help Build Skyscraper,” Associated Press, August 30, 1929.

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46. “close to one thousand feet high”: “Former Gov. Smith Heads Firm Putting Up 80-Story Building,” Baltimore Sun, August 30, 1929.

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47. “it can house at one time”: “Former Gov. Smith Heads Firm Putting Up 80-Story Building,” Baltimore Sun.

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48. “the building will occupy”: “Al Smith Will Help Build Skyscraper,” Associated Press.

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49. “Not that I know of yet”: “Al Smith Will Help Build Skyscraper,” Associated Press.

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50. the new building: Farber, Everybody Ought to Be Rich, 8.

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51. Baruch was hunting grouse: Bernard Mannes Baruch, Baruch: My Own Story (Henry Holt and Company, 1957).

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52. He sent a cable: Bernard M. Baruch Papers, Princeton University, Princeton, NJ.

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53. Even a failed $1 million investment: James L. Grant, Bernard M. Baruch: The Adventures of a Wall Street Legend (John Wiley & Sons, 1997), 220.

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54. “General situation looks”: Grant, Bernard M. Baruch, 221.

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55. the market kept going higher: David Cannadine, Mellon: An American Life (Alfred A. Knopf, 2006), 389.

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56. “Have patience and wait”: Jesse L. Livermore, How to Trade in Stocks: The Livermore Formula for Combining Time Element and Price (Duell, Sloan and Pearce, 1940).

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CHAPTER FIFTEEN

1. Facing a slow news day: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001), 13.

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2. she had relocated her office: “Miscellany,” Time, January 30, 1928.

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3. the euphoric stock market: William J. Barber, From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921–1933 (Cambridge University Press, 1989), 78.

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4. Two days later stocks set: “Stock Prices Break on Dark Prophecy,” New York Times, September 6, 1929.

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5. intended to raise the alarm: “Babson Predicts ‘Crash’ in Stocks,” New York Times, September 6, 1929.

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6. “while the number of declining stocks”: “Babson Predicts ‘Crash’ in Stocks,” New York Times.

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7. his words made their way: “Stock Prices Break on Dark Prophecy,” New York Times, September 6, 1929.

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8. The market’s plunge of 3 percent: Babson College, “The Man Who Predicted the Crash of ’29,” Newswise, October 26, 2004.

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9. “Prophet of Loss”: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (Penguin Press, 2009), 350.

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10. When he returned to New York: Lisa Endlich Heffernan, Goldman Sachs: The Culture of Success (Simon & Schuster, 1999), 46; William D. Cohan, Money and Power: How Goldman Sachs Came to Rule the World (Doubleday & Company, Inc., 2011), 57.

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11. “one of the nation’s leading economists”: “Fisher Answers Babson,” Los Angeles Times, September 7, 1929.

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12. “Stock prices are not too high”: “Fisher Answers Babson,” Los Angeles Times.

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13. “We would not be stampeded”: “Topics in Wall Street,” New York Times, September 6, 1929.

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14. A staggering $8.5 billion: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 404.

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15. The president had had personal experience: Whyte, Hoover. Hoover traded stock in his brother’s name without his knowledge and lost it all. He discharged his brother’s considerable debt to him as compensation. Hoover used inside information, which wasn’t illegal at the time, to trade “in his own name, his wife’s name, and in friends’ names,” according to Whyte’s account.

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16. From the moment of his announcement: Hearings Before the Committee on the Judiciary, House of Representatives, 72d Cong., first sess., on H. Res. 92 (1932) (charges of Hon. Wright Patman Against the Secretary of the Treasury).

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17. “Mellon is not disqualified”: Official Opinions of the Attorneys General of the United States, Advising the President and Heads of Departments, in Relation to Their Official Duties (W.H. & O.H. Morrison, 1932), 19.

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18. But by September, Hoover and Mellon: “Mellon Will Stay in Office till 1933,” New York Times, October 8, 1929.

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19. the White House was forced: “Mellon Will Stay in Office till 1933,” New York Times.

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20. “Mr. Mellon has promised”: “Mellon Will Stay in Office till 1933,” New York Times.

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21. Thomas Lamont traveled to Washington: Public Papers of the Presidents of the United States: Herbert Hoover, 1930 (U.S. Government Printing Office, 1976), 684.

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22. Lamont had been working: Thomas W. Lamont Papers, 1894–1948, box 98, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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23. “I wanted to pay my respects”: Lamont Papers, 1894–1948, box 98.

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24. Lamont was thrilled: Lamont Papers, 1894–1948, box 98.

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25. Just before midnight: “C.E. Mitchell Sails for Europe to Rest,” New York Times, September 21, 1929.

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26. stocks had fallen amid rumors: “Firm Goes to Wall,” United Press International, September 21, 1929.

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27. “Money is all right”: “C.E. Mitchell Sails for Europe to Rest,” New York Times.

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28. Andrew Mellon and his son: “C.E. Mitchell Sails for Europe to Rest,” New York Times.

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29. “There is nothing to worry about”: “C.E. Mitchell Sails for Europe to Rest,” New York Times.

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30. clinched the headline-grabbing deal: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times, September 20, 1929.

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31. lengthy laudatory profile: W. F. Wamsley, “The Ruler of the World’s Largest Bank,” New York Times, September 29, 1929.

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32. raise its number: “National City Unites with Corn Exchange; Forms Largest Bank,” New York Times.

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33. Shareholders still had to approve: “C.E. Mitchell Sails for Europe to Rest,” New York Times.

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34. Mitchell visited Germany: “Business Sound, Mitchell Says,” New York Times, October 9, 1929.

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35. In Berlin, Mitchell celebrated: Henry Mann, “Col. Behn Gives Birthday Party for Mr. Mitchell in Berlin,” National City Bank Newsletter, November 1929.

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36. daylong party to honor Mitchell: Mann, “Col. Behn Gives Birthday Party for Mr. Mitchell in Berlin.”

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37. On September 22, Jesse Livermore sat: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 296–97.

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38. “the most dangerous time of all”: Thomas and Morgan-Witts, The Day the Bubble Burst, 297.

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39. He told Livermore: Thomas and Morgan-Witts, The Day the Bubble Burst, 296.

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40. they had exchanged: Thomas and Morgan-Witts, The Day the Bubble Burst, 296.

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41. renewed their passion: Thomas and Morgan-Witts, The Day the Bubble Burst, 296.

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42. They declined invitations: Thomas and Morgan-Witts, The Day the Bubble Burst, 296.

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43. “Don’t trade every day”: Thomas and Morgan-Witts, The Day the Bubble Burst, 297.

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44. “conspiring to obtain money”: Commercial & Financial Chronicle, “The Financial Situation,” September 28, 1929.

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45. The first missive said: Thomas and Morgan-Witts, The Day the Bubble Burst, 279.

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46. The third reported: Thomas and Morgan-Witts, The Day the Bubble Burst, 292–98.

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47. He read aloud again: Thomas and Morgan-Witts, The Day the Bubble Burst, 298.

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48. “The stock market is a mirror”: Jesse L. Livermore, How to Trade in Stocks: The Livermore Formula for Combining Time Element and Price (Duell, Sloan and Pearce, 1940).

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49. in the words of an aide: Thomas and Morgan-Witts, The Day the Bubble Burst, 292–98.

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CHAPTER SIXTEEN

1. John Raskob organized lunch: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013).

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2. “In a healthy market we prosper”: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 317.

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3. Manhattan was already home: “New York Heads Skyscraper List,” Brooklyn Daily Times, July 7, 1929.

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4. of the 207 Americans: Literary Digest, April 16, 1927.

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5. “tallest structure in the city”: “Chrysler Building Now Tallest Edifice,” New York Times, October 16, 1929.

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6. kept its final height a secret: Neal Bascomb, “For the Architect, a Height Never Again to Be Scaled,” New York Times, May 26, 2005.

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7. All he asked: Thomas and Morgan-Witts, The Day the Bubble Burst, 318.

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CHAPTER SEVENTEEN

1. Winston Churchill arrived: Bradley P. Tolppanen, Churchill in North America, 1929: A Three Month Tour of Canada and the United States (McFarland & Company, Inc., 2014), 192–97.

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2. Churchill, for his part: Martin Gilbert, Winston S. Churchill, companion vol. v, part 2, The Wilderness Years 1929–1935 (Heinemann, 1981), 9–10, 16–17.

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3. Earlier that summer: David Lough, No More Champagne: Churchill and His Money (Picador, 2015).

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4. “He knew nothing of what”: Thomas Maier, When Lions Roar: The Churchills and the Kennedys (Crown, 2014).

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5. Churchill wrote his wife: Andrew Roberts, “Churchill’s Surprising Anti-Americanism and What Changed,” Time, November 15, 2018; Gilbert, Winston S. Churchill, 198.

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6. “I’m afraid your known hostility”: Andrew Roberts, Churchill: Walking with Destiny (Penguin Books, 2019), ccxxii.

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7. Baruch orchestrated every detail: Lough, No More Champagne.

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8. wearing a brown suit: Tolppanen, Churchill in North America, 1929, 5.

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9. He boarded the Empress of Australia: Lough, No More Champagne, 190.

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10. “Jack and I have large cabins”: Lough, No More Champagne, 185.

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11. “There is a stock exchange”: Lough, No More Champagne, 190.

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12. Taking a train south: Lough, No More Champagne, 188.

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13. He traveled to San Simeon: Gilbert, Winston S. Churchill.

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14. in a cable to Clementine: Maier, When Lions Roar, 32.

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15. “A vast income”: Maier, When Lions Roar, 32.

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16. While Hearst rarely smiled: Maier, When Lions Roar, 33.

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17. While at Hearst’s home: Lough, No More Champagne.

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18. “This ‘mass of manoeuvre’ ”: Lough, No More Champagne.

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19. Hearst hosted a party: Maier, When Lions Roar, 33.

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20. Churchill’s mind remained on money: Lough, No More Champagne.

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21. Schwab provided the private train car: Tolppanen, Churchill in North America, 1929.

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22. Though he was Jewish: Tolppanen, Churchill in North America, 1929.

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23. On their first night: Tolppanen, Churchill in North America, 1929.

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24. Schwab loaned him another: Tolppanen, Churchill in North America, 1929, 208.

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CHAPTER EIGHTEEN

1. was so overjoyed: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 265.

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2. Lamont carefully curated: Thomas W. Lamont Papers, 1894–1948, box 52, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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3. MacDonald’s chief of staff: Lamont Papers, 1894–1948, box 52.

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4. MacDonald was in Philadelphia: “City of Brotherly Love Greets Britain’s Premier,” Toronto Star, October 11, 1929.

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5. MacDonald held forth: Lamont Papers, 1894–1948.

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6. “It seemed too good”: Lamont Papers, 1894–1948.

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7. “The protracted bull market in stocks”: Russell Cornell Leffingwell Papers, Archives at Yale, New Haven, CT.

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8. Yale’s Irving Fisher: “Fisher Sees Stocks Permanently High,” New York Times, October 16, 1929.

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9. “Even in the present high markets”: “Fisher Sees Bear Market Almost Over,” Brooklyn Citizen, October 22, 1929.

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10. “Industrial and commercial activity during”: “Wall Street Ticker Talk,” Times Union, October 15, 1929.

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11. as Mitchell boarded an ocean liner: “Mitchell Asserts Stocks Are Sound,” New York Times, October 16, 1929.

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12. “Although in some cases”: “No Reason Seen for Predicted Slump,” Daily Gleaner, October 18, 1929.

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13. the first president to put: “The Presidency: Telephone,” Time, April 8, 1929.

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14. he often spoke: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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15. the president dispatched an envoy: Chernow, The House of Morgan.

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16. “Hoover knows nothing about finance”: “Socialists Take Up Attack on Hoover,” New York Times, August 1, 1928.

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17. had dubbed Hoover: Chernow, The House of Morgan.

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18. he relayed Hoover’s concerns: Chernow, The House of Morgan.

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19. trends in the American economy: Thomas Lamont, letter to President Herbert Hoover, October 19, 1929, Lamont Papers, 1894–1948, box 98.

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20. “far less bearish”: Thomas Lamont, memorandum to Russell C. Leffingwell, October 16, 1929. Lamont Papers, 1894–1948, box 98.

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21. “We must remember”: Lamont to Hoover, October 19, 1929, Lamont Papers, 1894–1948, box 98.

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22. “Is it not just possible”: Lamont to Hoover, October 19, 1929, Lamont Papers, 1894–1948, box 98.

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23. “If it should turn out”: Lamont to Hoover, October 19, 1929, Lamont Papers, 1894–1948, box 98.

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24. “Corrective action on the part”: Lamont to Hoover, October 19, 1929.

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25. Hoover so eagerly awaited: Chernow, The House of Morgan, 315.

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26. Leffingwell was more apprehensive: Lamont, The Ambassador from Wall Street, 268.

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27. “almost all that it contains”: Lamont Papers, 1894–1948; Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022), 99.

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28. The session ended badly: Phyllis S. Pearce, The Dow Jones Averages, 1885–1995 (Irwin Professional Pub., 1996), 108.

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29. $1 billion in equity vanished: “Stocks Driven Down as Wave of Selling Engulfs the Market,” New York Times, October 20, 1929.

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30. The New York Times reported: “Stocks Driven Down as Wave of Selling Engulfs the Market,” New York Times.

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31. Livermore realized he could use: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 335–36.

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32. Livermore handed him: Paul Sarnoff, Jesse Livermore: Speculator King (Traders Press, 1985,) 10–12; “Livermore Not in Bear Pool; Says It Is Foolish to Think That Any One Group Can Sway Market,” New York Times, October 22, 1929.

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33. “What can a professor know”: Sarnoff, Jesse Livermore, 10–12.

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34. “on the short side”: Sarnoff, Jesse Livermore, 10.

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35. “What little business”: “Livermore Not in Bear Pool; Says It Is Foolish to Think That Any One Group Can Sway Market,” New York Times.

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36. was immediately pressed: “Mitchell Terms Decline Healthy,” Wall Street Journal, October 23, 1929.

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37. meet the next day: “Reserve Bank to Discuss Cut in Rate Today,” New York Herald Tribune, October 24, 1929.

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38. The Fed had only recently raised: “The Discount Rate,” New York Times, August 10, 1929.

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39. “Certainly lowering the present rate”: “Wall Street News and Comment,” Boston Globe, October 23, 1929.

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40. a far less sanguine Hoover: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001), 206.

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41. but forwarded the message: Lamont Papers, 1894–1948.

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42. “far-reaching decline of the year”: “Topics in Wall Street,” New York Times, October 24, 1929.

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43. the final hour on the Exchange: “Market Break Forces Down Stock Values,” Buffalo News, October 24, 1929.

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44. A somewhat callous banker: “Topics in Wall Street,” New York Times.

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45. “It will send”: “Topics in Wall Street,” New York Times.

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46. bonds had been steadily advancing: Karol Jan Borowiecki, Michał Dzieliński, and Alexander Tepper, “The Great Margin Call: The Role of Leverage in the 1929 Wall Street Crash,” Economic History Review 76 (2023): 807–26.

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47. Fisher gave yet another speech: Richard Hatton, “Fisher Denies Inflation of Stock Values,” Washington Herald, October 24, 1929.

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CHAPTER NINETEEN

1. Lamont was astonished: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 269–70.

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2. Police wagons began to arrive: Gordon Thomas and Max Morgan-Witts, The Day the Bubble Burst: A Social History of the Wall Street Crash of 1929 (Doubleday & Company, Inc., 1979), 353.

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3. “In case there’s trouble”: Thomas and Morgan-Witts, The Day the Bubble Burst, 353.

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4. “Nobody Goes Home Until I Say So”: Thomas and Morgan-Witts, The Day the Bubble Burst, 353.

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5. Lamont and his partners crowded: Thomas and Morgan-Witts, The Day the Bubble Burst, 353.

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6. “People just stood there”: Thomas and Morgan-Witts, The Day the Bubble Burst, 353.

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7. Bologna had a lot: Thomas and Morgan-Witts, The Day the Bubble Burst, 356.

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8. “A wise man never sells out”: Thomas and Morgan-Witts, The Day the Bubble Burst, 356.

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9. Crawford made his way: Thomas Fleming, “Good-bye to Everything!,” American Heritage, August 1965.

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10. Montgomery Ward immediately plummeted: “Business & Finance: Bankers v. Panic,” Time, November 4, 1929.

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11. Bologna, the bootblack, managed to wriggle: Thomas and Morgan-Witts, The Day the Bubble Burst, 356.

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12. “In the crowd”: Thomas and Morgan-Witts, The Day the Bubble Burst, 356.

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13. “run, curse, push or go coatless”: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2001), 210; Thomas Fleming, “Good-bye to Everything!”

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14. Tickers continued to run: Thomas and Morgan-Witts, The Day the Bubble Burst, 358.

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15. “a kind of madness”: Thomas and Morgan-Witts, The Day the Bubble Burst, 358.

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16. a comparable frenzy erupted: Thomas and Morgan-Witts, The Day the Bubble Burst, 358.

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17. “a fat, perspiring man”: Thomas and Morgan-Witts, The Day the Bubble Burst, 358.

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18. almost an hour late: Thomas and Morgan-Witts, The Day the Bubble Burst, 358.

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19. Lamont had inherited the mantle: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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20. it took Lamont’s aide ten minutes: Thomas and Morgan-Witts, The Day the Bubble Burst, 357.

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21. a British journalist: Claud Cockburn, In Time of Trouble: An Autobiography (R. Hart-Davis, 1957), 167.

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22. “found himself part”: Cockburn, In Time of Trouble, 167.

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23. “an enormous murmuring crowd”: Cockburn, In Time of Trouble, 167.

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24. shoving people on the sidewalks aside: Thomas and Morgan-Witts, The Day the Bubble Burst, 360.

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25. After watching the tape: Matthew Josephson, The Money Lords (Weybright and Talley, 1972), 92–93; Lamont, The Ambassador from Wall Street, 369.

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26. As the crowd grew denser: Lamont, The Ambassador from Wall Street, 369.

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27. The Wall Street Journal later estimated: “Bankers Halt Stock Debate,” Wall Street Journal, October 25, 1929.

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28. Lamont asked each man to contribute: Lamont, The Ambassador from Wall Street, 370.

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29. initial commitment of $120 million: Lamont, The Ambassador from Wall Street, 269–70.

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30. Bernard Baruch declined Lamont’s urgent request: Bernard Baruch, Baruch: The Public Years (Holt, Rinehart & Winston, 1960), 225.

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31. “The day was past”: Baruch, Baruch, 226.

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32. Before leaving for the meeting: Thomas and Morgan-Witts, The Day the Bubble Burst, 363.

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33. Reporting for The Saturday Evening Post: Edwin Lefèvre, “The Little Fellow in Wall Street,” Saturday Evening Post, January 4, 1930.

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34. “It’s going to be all right”: Thomas and Morgan-Witts, The Day the Bubble Burst, 363.

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35. Cockburn described Lamont: Cockburn, In Time of Trouble, 168.

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36. “a little distress selling”: “Bankers Come to Market’s Rescue; Rise Follows Lamont’s Statement,” Brooklyn Daily Times, October 24, 1929.

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37. “We consider the situation”: “Bankers Come to Market’s Rescue; Rise Follows Lamont’s Statement,” Brooklyn Daily Times.

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38. “Since becoming a journalist”: Cockburn, In Time of Trouble, 168.

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39. Cockburn left for a lunch appointment: Cockburn, In Time of Trouble, 170–71.

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40. “built of red brick”: Lauren Gambier, “History of 22 Washington Square,” Jean Monnet Center for International and Regional Economic Law & Justice, New York University.

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41. Cockburn noticed sounds: Cockburn, In Time of Trouble, 170.

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42. Cockburn described the scene: Cockburn, In Time of Trouble, 170–71.

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43. unlike his brother: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969), 134–35.

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44. Whitney was not unduly alarmed: “Business & Finance,” Time, November 4, 1929.

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45. serving as the steward: Vernon van Ness, “Essex Hounds’ Race Ends in Dead Heat,” New York Times, October 24, 1929; Brooks, Once in Golconda, 113.

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46. Whitney had expected: Chernow, The House of Morgan, 316.

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47. the tall, supercilious Whitney: Lamont, The Ambassador from Wall Street, 370.

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48. “Ten thousand at two-oh-five”: Josephson, The Money Lords, 92–93.

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49. Within minutes he had deployed: Chernow, The House of Morgan, 316.

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50. “Wall Street’s White Knight”: “Business: Ex-Knight,” Time, March 21, 1938.

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51. Dangling his pince-nez: Chernow, The House of Morgan, 317.

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52. The pool winnowed: Lamont, The Ambassador from Wall Street, 270.

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53. “I am still of the opinion”: “Wall Street Optimistic After Stormy Day,” New York Times, October 25, 1929.

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54. Rumors circulated that the bankers: “Financiers Ease Tension; Five Wall Street Bankers Hold Two Meetings at Morgan Office,” New York Times, October 25, 1929.

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55. But he did not explain: Burton Rascoe, “The Grim Anniversary,” New Republic, October 29, 1930.

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56. Lamont informed the stock exchange board: Lamont, The Ambassador from Wall Street, 271.

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57. met twice that day: “Financiers Ease Tension,” New York Times, October 25, 1929.

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58. By the time it ended: “Losses Recovered in Part,” New York Times, October 25, 1929.

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59. A short news item: Thomas and Morgan-Witts, The Day the Bubble Burst, 368.

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60. Charles Merrill of Merrill Lynch: Tom Shachtman, The Day America Crashed: A Narrative Account of the Great Stock Market Crash of October 24, 1929 (G. P. Putnam’s Sons, 1979), 278.

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61. a new brokerage office: Karen Blumenthal, Six Days in October: The Stock Market Crash of 1929: A Wall Street Journal Book (Simon & Schuster, 2002), 32–34.

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62. a “death watch”: “Stock Crash Starts Excited Trading on Liner,” New York Times, October 26, 1929.

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63. “My son and I”: “Rockefeller Backs Morgan to Buy Stock,” Associated Press, October 31, 1929.

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64. “Severe disturbances in the stock market”: “Wall Street Optimistic After Stormy Day,” New York Times.

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65. “I expected it long ago”: “Early Investigation of Reserve Board and Financial Conditions Is Predicted,” United States Daily, October 25, 1929.

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66. Evangeline Adams hosted: Klein, Rainbow’s End, 216.

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67. The seer reassured her clients: Klein, Rainbow’s End, 216.

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68. Adams contacted her own broker: Thomas and Morgan-Witts, The Day the Bubble Burst, 370.

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69. Jesse Livermore had been plotting: Richard Smitten, Jesse Livermore: World’s Greatest Stock Trader (John Wiley & Sons, 2001), 197.

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70. At night he battled insomnia: Smitten, Jesse Livermore, 3.

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71. Richard Whitney’s theatrical stock-buying: Axel Madsen, The Deal Maker: How William C. Durant Made General Motors (John Wiley & Sons, 1999), 255.

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72. Durant, convinced the Federal Reserve: Madsen, The Deal Maker, 255.

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73. President Hoover issued a public statement: Herbert Hoover, “Statement on the National Business and Economic Situation, October 25, 1929,” The American Presidency Project, n.d., presidency.ucsb.edu/node/207721.

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74. “greater dangers and greater troubles”: William J. Barber, From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921–1933 (Cambridge University Press, 1989), 78–79.

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75. “Yesterday’s happenings will be followed”: Barber, From New Era to New Deal, 78–79.

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76. The market weathered: “Stocks Gain as Market Is Steadied,” New York Times, October 26, 1929.

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77. Lamont sensed the worst had passed: Lamont, The Ambassador from Wall Street, 271.

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78. “The day’s developments”: “Stocks Hold Firm in Normal Trading; Pool Still On Guard,” New York Times, October 27, 1929.

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79. Lamont wrote to his daughter: Lamont, The Ambassador from Wall Street, 271.

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CHAPTER TWENTY

1. tour buses rumbled: James Grant, Bernard Baruch: The Adventures of a Wall Street Legend (John Wiley & Sons, 1997), 225.

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2. Just before 10 a.m.: Helvering v. Mitchell, 303 US 391 (1938).

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3. Mitchell got a call to attend: Helvering v. Mitchell.

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4. All the blue chips took: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954.

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5. Mitchell then made his way: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 272.

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6. nine million shares: Grant, Bernard Baruch, 225.

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7. National City had bought: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 81–103.

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8. Mitchell arrived at Baruch’s home: “Baruch Mansion on Fifth Avenue Is Sold,” New York Times, November 1, 1946.

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9. After everyone had been seated: Lamont, The Ambassador from Wall Street, 272.

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10. “happened to be walking down”: Martin Gilbert, Winston S. Churchill, companion vol. v, part 2, The Wilderness Years 1929–1935 (Heinemann, 1981), 25.

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11. “I expected to see pandemonium”: Martin Gilbert, Churchill: A Life (Heinemann, 1991).

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12. Successful financiers were: Grant, Bernard Baruch, 23.

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13. Baruch himself had been wary: Grant, Bernard Baruch, 225–26.

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14. “I decided to sell everything”: Bernard Baruch, Baruch: The Public Years (Holt, Rinehart & Winston, 1960), 244.

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15. He didn’t tell anyone: Baruch, Baruch, 244.

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16. He lost an estimated $14,737,000: “14 Million Blow to Baker,” New York Times, October 29, 1929.

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17. “Think I am able to see”: Grant, Bernard Baruch, 226.

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18. his “overnight cogitations”: City Bank Farmers Trust Company v. Cannon et al., 51 N.E.2d 674,291 (N.Y.1943), Affidavit of David Brady—Exhibit B.

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19. Lamont had a complicated view: Thomas W. Lamont Papers, 1894–1948, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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20. Lamont had been informed by a reporter: Lamont Papers, 1894–1948.

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21. But very little of that mattered: United States v. Charles E. Mitchell, 32 B.T.A. 1093, 1935 BTA LEXIS 843 (June 1933).

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22. Mitchell requested a total: Helvering v. Mitchell.

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23. A cryptic invitation was extended: Chernow, The House of Morgan.

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24. Lamont stepped into a blue haze: Tom Shachtman, The Day America Crashed: A Narrative Account of the Great Stock Market Crash of October 24, 1929 (G. P. Putnam’s Sons, 1979), 278.

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25. Richard Whitney reminded: Richard Whitney, Work of the New York Stock Exchange in the Panic (Boston Association of Stock Exchange Firms, 1930).

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26. over 16 million shares were traded: “Stocks Collapse in 16,410,030-Share Day, but Rally at Close Cheers Brokers; Bankers Optimistic, to Continue Aid,” New York Times, October 30, 1929.

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27. “the day was the most disastrous”: “Stocks Collapse in 16,410,030-Share Day, but Rally at Close Cheers Brokers; Bankers Optimistic, to Continue Aid,” New York Times.

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28. “continue in a cooperative way”: “Leaders See Fear Waning,” New York Times, October 30, 1929.

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29. One stoic banker: Frederick Lewis Allen, Only Yesterday: An Informal History of the 1920s (Harper Perennial Modern Classics, 2010), 291.

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30. After the close of the market: Studs Terkel, Hard Times: An Oral History of the Great Depression (New Press, 2005), 67.

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31. “because at the time”: Terkel, Hard Times, 67.

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32. The firm’s public fund: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 115.

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33. “It was like a thunder clap”: Terkel, Hard Times, 93.

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34. As midnight approached: Harold and Gwyneth Barger, “Surviving Black October,” New York Times, September 30, 1979.

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35. That same evening: Richard Smitten, Jesse Livermore: World’s Greatest Stock Trader (John Wiley & Sons, 2001), 13–14.

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36. “We’re going to be fine”: Smitten, Jesse Livermore, 14.

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37. Churchill lost money: Winston Churchill, “Stock Crash in U.S. Seen by Churchill as Passing Episode,” Washington Post, December 8, 1929.

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38. His optimism about American capitalism: David Lough, No More Champagne: Churchill and His Money (Picador, 2015), 194–95.

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CHAPTER TWENTY-ONE

1. Lamont and his team dictated: Thomas W. Lamont Papers, 1894-1948, box 108, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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2. “Charles E. Mitchell had assured us”: Lamont Papers, 1894–1948, box 108.

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3. “We cannot help feeling”: Lamont Papers, 1894–1948, box 108.

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4. “Rather horrified by your previous cable”: Lamont Papers, 1894–1948 , box 108.

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CHAPTER TWENTY-TWO

1. John Raskob got a panicked call: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013), 270.

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2. Riordan had sat down: “J.J. Riordan Ends Life with Pistol in His Home,” New York Times, November 10, 1929. According to the New York Times, New York City chief medical examiner Dr. Charles Norris “estimated that the shot had been fired between 4 P.M. and 5 P.M., and that in normal circumstances a man so wounded might live an hour and a half”; Riordan was reportedly discovered by his brother-in-law, J. P. Geagan, at 5:50 p.m.

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3. Riordan was a member: Farber, Everybody Ought to Be Rich, 270.

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4. Riordan had extended a loan: Farber, Everybody Ought to Be Rich, 271.

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5. a self-made man who got: “J.J. Riordan Ends Life with Pistol in His Home,” New York Times.

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6. he had to lay off: “J.J. Riordan Ends Life with Pistol in His Home,” New York Times.

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7. In the hours before Riordan: “J.J. Riordan Ends Life with Pistol in His Home,” New York Times.

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8. When Riordan was found dead: “J.J. Riordan Ends Life with Pistol in His Home,” New York Times.

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9. Raskob knew he could ill afford: John J. Raskob, letter to Sen. Pat Harrison, November 2, 1929, Congressional Record—Senate, November 4, 1929.

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10. a “stock plunger”: Raskob letter to Harrison, November 2, 1929, Congressional Record—Senate, November 4, 1929.

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11. “I do not gamble”: Raskob letter to Harrison, November 2, 1929.

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12. arranged for an immediate audit: “Raskob in Charge of Riordan’s Bank,” New York Times, November 10, 1929.

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13. “None of us put up anything”: “Raskob in Charge of Riordan’s Bank,” New York Times.

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14. “It is very understandable”: “Raskob in Charge of Riordan’s Bank,” New York Times.

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15. Raskob was blunt: Farber, Everybody Ought to Be Rich, 271.

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16. He had been receiving threatening calls: Richard Smitten, Jesse Livermore: World’s Greatest Stock Trader (John Wiley & Sons, 2001), 17.

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17. Worried about his family’s safety: “Livermore Has Bodyguard,” New York Times, December 21, 1929.

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18. By the middle of November: “Stocks Sink to New Lows,” New York Times, November 13, 1929.

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19. “who for many weeks”: “Stocks Sink to New Lows,” New York Times.

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20. “no reason why”: “Stocks Sink to New Lows,” New York Times.

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21. The day the article appeared: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (Penguin Press, 2009), 361.

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CHAPTER TWENTY-THREE

1. Herbert Hoover did not like: Thomas Schwartz, “An Average Day in the Life of a President,” Hoover Heads, National Archives, April 14, 2021.

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2. traipsing through the White House garden: Harvey O’Connor, Mellon’s Millions: The Biography of a Fortune; the Life and Times of Andrew W. Mellon (John Day Company, 1933), 130, 314.

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3. Hoover had not been particularly: Herbert Hoover, “The President’s News Conference, November 5, 1929,” The American Presidency Project, n.d., presidency.ucsb.edu/documents/the-presidents-news-conference-843.

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4. “I see no particular reasons”: Hoover, “The President’s News Conference, November 5, 1929.”

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5. “there has been a complete isolation”: Hoover, “The President’s News Conference, November 5, 1929.”

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6. Mellon, on the other hand: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 407.

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7. Hoover received a nerve-racking letter: Letter from R. P. Lamont to Herbert Hoover, November 14, 1929, President’s Subject File, box 159, Financial Matters, New York Stock Exchange Correspondence, November–December 1929.

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8. Hoover opened another letter: “Hearst Asks Hoover to Take Steps to End Stock Market Panic,” Washington Times Herald, November 14, 1929.

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9. the 11.7 percent plunge: Floyd Norris, “Looking Back at the Crash of ’29,” New York Times, October 15, 1999.

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10. Previous market crashes: William J. Barber, From New Era to New Deal: Herbert Hoover, the Economists, and American Economic Policy, 1921–1933 (Cambridge University Press, 1989), 80.

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11. a strictly controlled: Hoover, “The President’s News Conference, November 5, 1929.”

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12. “In market booms”: Herbert Hoover, “Statement Announcing a Series of Conferences with Representatives of Business, Industry, Agriculture, and Labor,” The American Presidency Project, n.d., https://www.presidency.ucsb.edu/node/208315.

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13. “I was never so confused”: Henry Lee, “1929: The Crash That Shook the World,” American Mercury, November 1949.

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14. surprised Hoover by handing out: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 111.

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15. “constitutionally gloomy,” in the words: William Allen White, Selected Letters of William Allen White, 1899–1943 (Henry Holt and Company, 1947), 316–17.

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16. “The President has great capacity”: White, Selected Letters of William Allen White, 1899–1943, 316–17.

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17. the floor of the U.S. Senate: “Senators in Anger Denounce Critics,” New York Times, November 22, 1929.

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18. Glass believed he knew: “Gotham Banker Gets Blame for Crash in Stocks,” Fort Myers Press, November 21, 1929.

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19. Back on Wall Street, as the: Lawrence Gustin, Billy Durant: Creator of General Motors (Eerdmans, 1973), 244.

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20. “I’m sorry you can’t see”: Gustin, Billy Durant, 244.

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21. the five telephones sitting silently: Earl Sparling, Mystery Men of Wall Street: The Powers Behind the Market (Greenberg, 1930), 14.

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22. a sign that said : Sparling, Mystery Men of Wall Street, 25.

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23. “We may as well tell the truth”: Sparling, Mystery Men of Wall Street, 17; “W.C. Durant Says He Warned President Before Stock Crash,” St. Louis Globe-Democrat, December 14, 1929.

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24. “Am I broke?”: Sparling, Mystery Men of Wall Street, 29.

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CHAPTER TWENTY-FOUR

1. Less than a week before Christmas: United States v. Charles E. Mitchell, 32 B.T.A. 1093, 1935 BTA LEXIS 843 (June 1933).

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2. down from the average price: United States v. Charles E. Mitchell.

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3. Mitchell toyed with the idea: United States v. Charles E. Mitchell.

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4. Forbes advised him: Helvering v. Mitchell, 303 US 391 (1938).

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5. They agreed that Elizabeth: United States v. Charles E. Mitchell, opening statements (May 11, 1933).

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6. in her sitting room: Helvering v. Mitchell.

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CHAPTER TWENTY-FIVE

1. the Ukrainian sculptor Alexander Archipenko: Walter Winchell, “Things I Never Knew till Now,” Washington Herald, November 15, 1929.

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2. while ignoring a volunteer: Paul Gallico, “The Whiskers Come Off,” Daily News, December 21, 1929.

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3. Eight blocks away, the Chrysler Building: “Chrysler Building,” New York City Landmarks Preservation Commission, September 12, 1978, https://s-media.nyc.gov/agencies/lpc/lp/0992.pdf.

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4. “The collapse of the market”: E. B. White, comment, New Yorker, November 2, 1929.

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5. gaining 61 percent of the vote: “Vote for Mayor of New York City,” New York Times, November 6, 1929.

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6. Walker gave himself: Herbert Mitgang, Once Upon a Time in New York (Cooper Square Press, 2003), 53.

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7. An essay by John Raskob: John J. Raskob, “What Next in America,” North American Review 229, no. 5 (November 1929): 513–18; “The Past Year in Our Financial History,” New York Times, December 31, 1929.

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8. On its financial page: “Some Popular Theories Which Prevailed in 1929, and How They Were Tested by Events of the Autumn,” New York Times, December 31, 1929.

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9. one of the youngest rear admirals: “Hoover’s Pen Makes Byrd Rear Admiral for Polar Exploits,” New York Times, December 22, 1929.

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10. “You will be wondering”: Thomas W. Lamont Papers, 1894–1948, box 198, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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11. batted back rumors: “Broken Broker,” Time, December 7, 1936.

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12. the final hour and a half: “Celebrations Held on the Exchanges,” New York Times, January 30, 1930.

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13. “At one of the trading posts”: “Celebrations Held on the Exchanges,” New York Times.

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14. audible as far away as Broadway: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969), 129.

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PART II

1. By the late spring of 1930: Ariel Nelson, “Beware the Bear Market Rally,” CNBC, May 11, 2009.

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2. like Joseph Kennedy: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (Penguin Press, 2009), 311.

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3. Stocks ended 1930: Dow Jones Yearly Performance History, S&P Dow Jones Indices.

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4. a trader nicknamed the Jolly Bear: Matthew Josephson, The Money Lords (Weybright and Talley, 1972), 109.

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5. traversed the country: “Power of Bears Is Exaggerated, Whitney Says,” Associated Press, October 11, 1930.

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6. public spending was essential: Zachary D. Carter, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes (Random House, 2020), 186.

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7. Hoover believed that spending: Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression (Macmillan, 1952), 164.

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8. Whitney went before a Senate committee: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), fraser.stlouisfed.org/title/87.

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9. “down on my knees”: David Burner, Herbert Hoover: A Public Life (Alfred A. Knopf, 1979), 258.

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10. More than a thousand economists signed: Congressional Record—Senate, Monday, May 5, 1930, 8326.

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11. Washington had been debating Smoot–Hawley: Representative Milligan, speaking on Smoot–Hawley Tariff, 71st Cong., 2d sess., Congressional Record 22, pt. 11 (1930): 12675–76.

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12. “vicious, extortionate, and obnoxious”: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 199.

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13. Hoover signed the bill: “Hoover Signs Tariff Bill as Borah in Senate Seeks Cuts by Flexible Clause; New Duties Go into Effect,” New York Times, June 18, 1930.

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14. The price of grain collapsed: “New Low Prices Hit by Wheat and Rye,” New York Times, June 21, 1930.

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15. fell by 60 percent: Hearings Before the Committee on Ways and Means, United States House of Representatives (Seventy-eighth Congress, First Session, 1943), Reciprocal Trade Agreements Act, Extension of H.J. Res. 111 and Renegotiation of War Contracts (H.R. 2324, 2698, 3015).

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16. small banks across the country: “History of Banking and Deposit Insurance, 1930–1939,” FDIC, accessed May 21, 2025, https://www.fdic.gov/history/1930-1939.

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17. Hoover’s instincts were: Rappleye, Herbert Hoover in the White House, 406.

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CHAPTER TWENTY-SIX

1. Thomas Lamont celebrated: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 275, 287.

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2. an estate they called Torrey Cliff: “Estate of Lamont Given to Columbia,” New York Times, December 23, 1948; Jamie Malanowski, “Research; Near the Hudson, Studying Earth,” New York Times, January 11, 2004.

Following Thomas Lamont’s death in 1948, Florence donated Torrey Cliff to her alma mater, Columbia University, to serve as a research center for geology and geophysics; it is now the Lamont-Doherty Earth Observatory.

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3. The year had started off: Lamont, The Ambassador from Wall Street, 278.

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4. The New York Times ran: “T.W. Lamont 60 Years Old,” New York Times, October 1, 1930.

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5. The discussions he was having: Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022), 100, 115.

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6. His birthday coincided with: “Stock Prices Break; Sisto & Co. Suspended,” New York Times, October 1, 1930.

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7. sent him a copy: Thomas W. Lamont Papers, 1894–1948, box 198, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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8. traveled around the United States: Matthew Josephson, “Mass Civilization and the Individual,” Outlook and Independent, June 5, 1929.

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9. her pathbreaking foray: Ida M. Tarbell, “John D. Rockefeller: A Character Study,” McClure’s Magazine, August 1905.

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10. credulous portraits of Benito Mussolini: Ida Tarbell, “Mussolini, Italy and the World,” McCall’s, June 11, 1926.

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11. General Electric chairman Owen Young: John H. Finley, “Owen Young: Industrial Leader; Miss Tarbell’s Biography Sees in Him the Flowering of a New Type,” New York Times, June 12, 1932.

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12. which did virtually no original reporting: “About Time,” Time, March 26, 2023.

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13. From his home in Connecticut: Matthew Josephson, Infidel in the Temple (Alfred A. Knopf, 1967), 71.

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14. Josephson brought a jaundiced eye: Josephson, Infidel in the Temple, 94.

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15. Sherrod had been a bond salesman: Julian Sherrod, Scapegoats: By One of Them (Brewer, Warren & Putnam, 1931), ix–x.

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16. Utilizing internal memos and notes: Sherrod, Scapegoats, ix–x.

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17. “The past twelve years”: Sherrod, Scapegoats, ix–x.

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18. “Chairman has just made”: Sherrod, Scapegoats.

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19. “Wall Street and bankers”: Mary Burke King, “Book Reviews,” The Register, February 20, 1932.

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CHAPTER TWENTY-SEVEN

1. John Raskob bustled: “Raskob WEAF Speech,” Brooklyn Eagle, October 26, 1930.

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2. “The goal set”: Frank R. Kent, “Charley Michelson,” Scribner’s Magazine, September 30, 1930.

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3. The story took on: “Sees Raskob Plot to Slander Hoover,” New York Times, September 2, 1930.

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4. “John J. Raskob’s personally underwritten propagandist”: “Sees Raskob Plot to Slander Hoover,” New York Times.

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5. Senator Arthur Robinson declared: “G.O.P. Heavy Guns Trained Upon Raskob,” United Press International, September 11, 1930.

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6. “Now, we know”: “It Is Raskob’s Fault,” Marion Leader-Tribune, September 13, 1930.

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7. Raskob described the stories: “Raskob Urges Referendum on Dry Laws,” Associated Press, October 28, 1930.

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8. “No one ever heard me”: “Raskob Urges Referendum on Dry Laws,” Associated Press.

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9. “The only way to increase production”: “Raskob Advocates Tariff by Experts,” New York Times, October 28, 1930.

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10. In a separate statement: “G.O.P., by Innuendo, Accuses Raskob of Smashing Market,” Springfield Evening Union, November 1, 1930.

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CHAPTER TWENTY-EIGHT

1. On the morning of November 5: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 423–24.

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2. Unlike his boss: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 158.

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3. “A President cannot with decency”: Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941 (Macmillan, 1952), 220.

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4. he couldn’t stand Michelson: Jared Cohen, Life After Power: Seven Presidents and Their Search for Purpose Beyond the White House (Simon & Schuster. 2024), 184.

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5. Hoover seemed to understand: Rappleye, Herbert Hoover in the White House, 297.

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6. “He wants another term more”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” November 30, 1931, Herbert Hoover Presidential Library and Museum.

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7. More than 1,300 banks: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 290.

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8. “I believe if the newspapers”: Rappleye, Herbert Hoover in the White House, 381.

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9. “the only trouble with capitalism”: Mr. Mark Sullivan, Jr., interview by Raymond Henle, November 30, 1968, Herbert Hoover Presidential Library and Museum, 9.

In the same oral history, Sullivan also recalled an exchange he heard in 1928, while in a car with Hoover: “My father and Hoover…worried about the degree of speculation on the stock exchange and they were deploring the previous year’s, I guess, action of the Federal Reserve in keeping the interest rate down in an effort to help European banks which were floundering and having trouble; and I can remember perfectly clearly Mr. Hoover saying that ‘this gambling in the American stock market is a direct result of that. They should have tightened the money market. I’m afraid we’re going to have trouble.’ ”

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10. Salmon Levinson, a prominent Chicago lawyer: “Mr. Levinson’s Way,” Time, October 13, 1930.

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11. inviting business leaders: Spencer Howard, “The President’s Conference on Unemployment—1921,” Hoover Heads, National Archives, September 28, 2016.

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12. Survey of Current Business: Andrew D. Reamer, “The Origins of the Survey of Current Business,” Bureau of Economic Analysis, October 2020.

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13. Either the federal budget would: Rappleye, Herbert Hoover in the White House, ch. 13.

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14. the results of November 5: “Republicans Lay Defeat to Slump,” New York Times, November 6, 1930.

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15. Roosevelt had emerged: Lela Stiles, The Man Behind Roosevelt: The Story of Louis McHenry Howe (World Publishing Company, 1954), 117.

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16. a small, strange man: Stiles, The Man Behind Roosevelt, 225.

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17. had originally targeted 1936: Stiles, The Man Behind Roosevelt, 101.

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18. it was presumed that Hoover: Stiles, The Man Behind Roosevelt, 101.

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19. Governor Roosevelt had traveled: W. A. S. Douglas, “Roosevelt Ignites 1930 Campaign Fuse,” Baltimore Sun, December 11, 1929.

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20. On Election Day, he coasted: “Governor Received 725,001 Plurality,” New York Times, December 4, 1930.

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21. Hoover and the White House: “False Rumor Leads to Trouble at Bank,” New York Times, December 11, 1930.

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22. A series of bank runs: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990), 326.

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23. “We want our money!”: “Depositors’ Loans Begin Tomorrow,” New York Times, December 21, 1930.

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24. Six people were arrested: “Depositors’ Loans Begin Tomorrow,” New York Times.

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25. unlike previous panics: Alexander D. Noyes, “Financial Markets: The Appeal to Cheerfulness, Today and Last Spring, Observing an Anniversary,” New York Times, October 27, 1930.

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CHAPTER TWENTY-NINE

1. publicly lambast him: J. F. Essary, “Finance Probe by Glass Due to Be Sweeping,” Baltimore Sun, January 17, 1931.

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2. On the same day in November: “51 Banks in South Close Doors in Day,” New York Times, November 17, 1930.

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3. even started to sound: “Revival of Business Developing Gradually,” United Press International, January 13, 1931.

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4. As the hearing got underway: “Mitchell Declares Cash Bonus Would Ruin Many Banks,” Evening Sun, February 2, 1931.

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5. Glass was not buying it: “Mitchell Declares Cash Bonus Would Ruin Many Banks,” Evening Sun.

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6. “what makes a horse race”: “Mitchell Declares Cash Bonus Would Ruin Many Banks,” Evening Sun.

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7. Across from his home: Christopher Gray, “Streetscapes: Central Park’s ‘Hooverville’; Life Along ‘Depression Street,’ ” New York Times, August 29, 1993.

Today, the drained reservoir that was the site of the shantytown has been transformed into Central Park’s Great Lawn.

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8. “The thing I admire most”: B. C. Forbes, “Finance and Industry,” Tampa Times, October 5, 1931.

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9. essentially slammed the door: “The Immigration Act of 1924 (The Johnson-Reed Act),” Office of the Historian, United States State Department, accessed May 21, 2025, history.state.gov/milestones/1921-1936/immigration-act.

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10. Hoover was exasperated: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 288.

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11. “In this emergency”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” August 10, 1931, Herbert Hoover Presidential Library and Museum.

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12. “There are always”: Herbert Hoover, “The President’s News Conference,” October 21, 1930, The American Presidency Project; Herbert Hoover, Public Papers of the Presidents of the United States: Herbert Hoover, 1930 (U.S. Government Printing Office, 1976), 441.

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13. “This is a cruel world”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” May 27, 1931, Herbert Hoover Presidential Library and Museum.

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14. “We have Germans”: “Charles Mitchell Tells Senate Committee of Serious Menace,” Kansas City Journal, December 19, 1931.

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15. Lamont called Hoover: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (Penguin Press, 2009).

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16. “I am taking the liberty”: Thomas W. Lamont Papers, 1894–1948, box 98, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA.

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17. Lamont tried framing the issue: Lamont Papers, 1894–1948, box 98.

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18. Hoover had been obsessively studying: William Leuchtenburg, Herbert Hoover: The American Presidents Series (Times Books, 2009), 126.

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19. “This is the most daring statement”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” June 5, 1931, Herbert Hoover Presidential Library and Museum.

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20. he laid it out: Herbert Hoover, “The President’s News Conference, June 20, 1931,” The American Presidency Project, n.d., presidency.ucsb.edu/documents/the-presidents-news-conference-671.

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21. It was, at long last: Richard V. Oulahan, “Full Debt Holiday Insisted On Here,” New York Times, June 24, 1931.

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22. When he presented the debt-moratorium: David Cannadine, Mellon: An American Life (Alfred A. Knopf, 2006), 437.

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23. to attend his son Paul’s graduation: Ahamed, Lords of Finance.

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24. By the time Mellon returned: Cannadine, Mellon.

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25. From April to August: “History of Banking and Deposit Insurance, 1930–1939,” Federal Deposit Insurance Corporation, updated May 15, 2025, https://www.fdic.gov/history/1930-1939.

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26. the United Kingdom gave up: Charles E. Selden, “Britain Calm Under Gold Suspension; Act Gets Royal Assent; Pound at $4.22; Stocks Rally Here After Early Slump,” New York Times, September 22, 1931.

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27. “Conditions could not be much worse”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” September 29, 1931, Herbert Hoover Presidential Library and Museum.

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28. Hoover had had enough: Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920–1933 (Macmillan, 1952).

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29. he chose to meet them: Hoover, The Memoirs of Herbert Hoover.

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30. the McCormick Apartments: “McCormick Apartments,” DC Historic Sites, https://historicsites.dcpreservation.org/items/show/365.

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31. between the reception foyer: Majorie Hunter, “Andrew Mellon’s Drawing Room Is the First Target as the Renovation of Capital Mansion Begins,” New York Times, November 11, 1977.

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32. “We had a long”: Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941 (Macmillan, 1952), 97.

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33. “God help you when they”: Rappleye, Herbert Hoover in the White House, 363.

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34. Winston Churchill was back: Winston Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile,” Ottawa Citizen, January 9, 1932.

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35. a $75,000 hole: David Lough, No More Champagne: Churchill and His Money (Picador, 2015), 194.

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36. He was scheduled to give one: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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37. Bernard Baruch’s house on Fifth: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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38. an Alaskan gold-mining concern: James Grant, Bernard M. Baruch: The Adventures of a Wall Street Legend (John Wiley & Sons, 1997), 237–38.

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39. “When I got near”: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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40. “It occurred to me”: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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41. “Suddenly upon my right”: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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42. “rushing forward at full speed”: “To Rule All Traffic from Times Square,” New York Times, January 5, 1922; “Yellow Traffic Lights,” New York Times, February 9, 1952.

In the 1920s and parts of the 1930s, cars often sped through the streets because not all intersections were manned with a police officer to control traffic, nor a traffic light. To the extent that there were traffic lights, many still only had two lights: red and green, leading drivers to screech to a halt when the light switched to red. Yellow lights were invented in the 1920s but rolled out slowly—they weren’t widely seen in New York City until the 1950s.

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43. “I now saw”: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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44. “Tell me, Baruch”: Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile.”

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45. “Last night he was very sad”: Mary Soames, Clementine Churchill: The Biography of a Marriage (Houghton Mifflin, 1979), 290.

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CHAPTER THIRTY

1. “Fighting this depression”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” February 18, 1932, Herbert Hoover Presidential Library and Museum.

According to Joslin, Hoover specifically lamented the failure of the director of the President’s Organization on Unemployment Relief, Walter S. Gifford, describing him as “a sorry disappointment…he lacks the qualities that I thought he possessed.”

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2. Almost 11,000 banks had closed: Edward Morris, Wall Streeters: The Creators and Corruptors of American Finance (Columbia University Press, 2015), 57.

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3. described in his diary: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” August 27, 1931, Herbert Hoover Presidential Library and Museum.

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4. That was due: Janet Schmelzer, “Wright Patman and the Impeachment of Andrew Mellon,” East Texas Historical Journal, March 1985.

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5. With “Capone out of the way”: Janet Schmelzer, “Wright Patman and the Impeachment of Andrew Mellon.”

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6. “Mellonites, poll parrots and ‘yes’ men”: Janet Schmelzer, “Wright Patman and the Impeachment of Andrew Mellon.”

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7. the creation of the Reconstruction: Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941 (Macmillan, 1952), 117.

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8. Mellon hated the idea: David Cannadine, Mellon: An American Life (Alfred A. Knopf, 2006), 442.

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9. he had come to the view: Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency 1920–1933 (Macmillan, 1952), 101.

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10. “shocked at the revelation”: Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941, 90.

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11. Hoover tapped Charles Dawes: Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941, 108; Herbert Hoover, “Statement on the Appointment of Andrew W. Mellon as United States Ambassador to Great Britain, February 3, 1932,” The American Presidency Project, n.d., presidency.ucsb.edu/documents/statement-the-appointment-andrew-w-mellon-united-states-ambassador-great-britain.

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12. “densely ignorant, pitifully ignorant”: Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 311.

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13. Hoover’s White House: Rappleye, Herbert Hoover in the White House, 311.

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14. “My personal observation”: Rappleye, Herbert Hoover in the White House, 311.

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15. signed into law by Hoover: Herbert Hoover, “Statement on Signing the Federal Reserve Act, February 27, 1932,” The American Presidency Project, n.d., presidency.ucsb.edu/node/208357.

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16. One of his biggest ideas: Rappleye, Herbert Hoover in the White House, 395–97.

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17. Steagall’s big idea was: “Banking Reform Drafted,” New York Times, April 8, 1933.

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18. Glass was strongly against: Matthew P. Fink, The Unlikely Reformer: Carter Glass and Financial Regulation (George Mason University, 2019).

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19. “You know, this fellow Hoover”: Diana B. Henriques, Taming the Street: The Old Guard, the New Deal, and FDR’s Fight to Regulate American Capitalism (Random House, 2023), 104.

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20. Hoover was on his own: Rappleye, Herbert Hoover in the White House, 311.

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21. “You have no idea”: Richard Norton Smith, An Uncommon Man: The Triumph of Herbert Hoover (Simon & Schuster, 1984), 121.

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22. “take adequate measures”: Herbert Hoover, “Statement on the New York Stock Exchange, February 19, 1932,” The American Presidency Project, n.d., presidency.ucsb.edu/documents/statement-the-new-york-stock-exchange.

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23. dismissed Hoover’s concerns: Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010), 16.

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24. Hoover saw this: Perino, The Hellhound of Wall Street, 17.

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25. Hoover reached out: Perino, The Hellhound of Wall Street, 17.

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26. “gratefully does all the little chores”: Drew Pearson and Robert S. Allen, More Merry-Go-Round (Liveright, 1932), 352.

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27. an outright ban: “Bear Raiders to Face Committee,” Associated Press, February 27, 1932.

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28. “We are going to let”: “Bear Raiders to Face Committee,” Associated Press.

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29. a self-described “Prairie Statesman”: Gilbert C. Fite, “Peter Norbeck and the Defeat of the Nonpartisan League in South Dakota,” Mississippi Valley Historical Review 33, no. 2 (September 1946).

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30. “We are going into this”: Perino, The Hellhound of Wall Street, 48.

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31. a Republican lawyer: Perino, The Hellhound of Wall Street, 49.

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32. “was doing its utmost”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), 729, fraser.stlouisfed.org/title/87.

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33. John Raskob firmly rejected: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), 729, fraser.stlouisfed.org/title/87.

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34. “It has been charged in letters”: “Raskob Challenges Short Sales Charge at Senate Inquiry,” New York Times, June 4, 1932.

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35. was called before the committee: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency United States Senate (1932–1934).

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36. “You don’t hold us responsible”: “5 Bankers Called in Market Inquiry,” New York Times, February 8, 1933.

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37. From the perspective: Morris, Wall Streeters, 59.

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38. complained that the hearing was: Morris, Wall Streeters, 59.

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39. revelations about how Michael Meehan: “R-K-O ‘Freeze-Out’ Charged at Inquiry,” New York Times, June 11, 1932.

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40. When Norbeck and other members: Morris, Wall Streeters, 60.

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41. He collected 98 percent: Arthur Krock, “Hoover, Curtis Renamed on First Ballots; Dry-Wet Plank Is Defended by Stimson,” New York Times, June 17, 1932.

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42. His advisors urged him: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 493.

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43. until the fourth ballot: Arthur Krock, “Roosevelt Nominated on Fourth Ballot,” New York Times, July 2, 1932.

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44. Hoover was so confident: Rappleye, Herbert Hoover in the White House, 419–20.

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45. “He is a sick man”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” April 27, 1932, Herbert Hoover Presidential Library and Museum.

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CHAPTER THIRTY-ONE

1. The Hoovers spent election night: Eugene Lyons, Herbert Hoover: A Biography (Doubleday & Company, Inc., 1964), 308.

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2. built during 1919 and 1920: “The Lou Henry and Herbert Hoover House,” National Park Service, February 10, 2021.

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3. the first scientific: Helmut Norpoth, “The American Voter in 1932: Evidence from a Confidential Survey,” PS: Political Science & Politics 52, no. 1 (2019): 14–19.

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4. When the survey report was delivered: Kenneth Whyte, Hoover: An Extraordinary Life in Extraordinary Times (Alfred A. Knopf, 2017), 512.

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5. “business in general is picking up”: Helmut Norpoth, “The American Voter in 1932.”

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6. Democrats in the House of Representatives: “House Democrats Total 313, a Record,” New York Times, November 11, 1932.

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7. And they had taken control: “Election a Blow to Congress Blocs; Democratic Sweep Will Re-Establish Party Control of Both Houses,” New York Times, November 10, 1932.

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8. “I had little hope”: Herbert Hoover, The Memoirs of Herbert Hoover: The Great Depression 1929–1941 (Macmillan, 1952), 218.

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9. Hoover rallied quickly: Herbert Hoover, Public Papers of the Presidents of the United States: Herbert Hoover, 1932–1933 (U.S. Government Printing Office, 1977).

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10. “We must have continued unity”: Herbert Hoover, Herbert Hoover: Containing the Public Messages, Speeches, and Statements of the President, 1932–1933 (U.S. Government Printing Office, 1977), 651.

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11. “Forces of recovery triumphed”: “Wrecked Progress Made Before 1932 Election, Hoover’s Former Aide Writes,” Buffalo News, June 4, 1935.

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12. The recipients of the loans: “Garner Urges Bank Deposit Guarantees,” United Press International, February 14, 1933.

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13. “If the truth scares people”: “Garner Urges Bank Deposit Guarantees,” United Press International.

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14. would be “unflinchingly maintained”: “20 Economists Urge Roosevelt to Cut Tariffs,” Associated Press, January 2, 1933.

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15. Norbeck, who had won reelection: “Unofficial Count Finished,” Rapid City Daily Journal, November 19, 1932.

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16. To get the ball rolling: “Pecora, $255 Month Lawyer, Worked Long on Morgan,” News Journal, May 25, 1933.

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17. unwilling to take such a risk: Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010), 52.

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18. “People have no faith”: Perino, The Hellhound of Wall Street, 55.

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19. With only six weeks left: Perino, The Hellhound of Wall Street.

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20. admitted to the bar in 1911: “Ex-Justice Ferdinand Pecora, 89, Dead,” New York Times, December 8, 1971.

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21. He had worked with Untermyer: “Pecora Appointed for Stock Inquiry,” New York Times, January 25, 1933.

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22. He had recently lost a bid: “Crain Picked by Tammany for District Attorney,” New York Times, August 9, 1929.

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23. That Pecora was even up: Perino, The Hellhound of Wall Street, 60.

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24. the 1924 law that sharply: James Ciment, Encyclopedia of the Jazz Age: From the End of World War I to the Great Crash (M.E. Sharpe, 2008).

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25. while welcoming “agents of Mussolini”: Congressional Record—Senate, April 25, 1930, 7711, https://www.congress.gov/71/crecb/1930/04/25/GPO-CRECB-1930-pt7-v72-12.pdf.

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26. On Sunday, January 22: Perino, The Hellhound of Wall Street.

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27. Pecora noticed a brief news item: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University.

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28. “invited by Mussolini”: Pecora, “Reminiscences of Ferdinand Pecora, 1962.”

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29. He focused on Mitchell: Ferdinand Pecora, Wall Street Under Oath: The Story of Our Modern Money Changers (Simon & Schuster, 1939), 71.

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30. Norbeck announced that the committee: “Mitchell Called in Senate Inquiry,” New York Times, February 2, 1933.

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31. Pecora began receiving: Perino, The Hellhound of Wall Street, 134, 136.

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32. she “shouldn’t have gambled”: Perino, The Hellhound of Wall Street, 135.

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33. “I can only hope that”: Perino, The Hellhound of Wall Street, 137.

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34. Authorization for the Senate committee’s investigation: “Senate to Continue Its Market Inquiry; Votes Extension to March 4 and Approves $50,000 Additional Funds for Expenses,” New York Times, June 22, 1932.

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CHAPTER THIRTY-TWO

1. Roosevelt was a guest: “Roosevelt Hears Party Chiefs Lampooned in Stunts at Dinner of the Inner Circle,” New York Times, February 19, 1933.

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2. he gave a look: Raymond Moley, After Seven Years (Harper & Brothers, 1939), 139.

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3. Moley read it: Moley, After Seven Years, 139–40.

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4. “A most critical situation”: Timothy Walch and Dwight M. Miller, Herbert Hoover and Franklin D. Roosevelt: A Documentary History (Greenwood Press, 1998), 132.

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5. Moley could scarcely believe: Moley, After Seven Years, 140.

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6. Roosevelt’s first choice: “Glass’s Stand,” Time, May 8, 1933.

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7. Glass was hesitant: Rixey Smith and Norman Beasley, Carter Glass: A Biography (Longmans, Green and Co., 1939), 331.

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8. “I must again advise you”: Dr. A. W. Terrell, letter to Carter Glass, February 2, 1933, Carter Glass Papers, University of Virginia, Charlottesville, VA.

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9. Glass wrote to a Republican senator: Carter Glass Papers.

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10. “I regard the condition”: John T. Flynn, The Roosevelt Myth (Devin-Adair, 1948), 23.

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11. “It’s your duty to your party”: Russell Cornell Leffingwell Papers, Archives at Yale, New Haven, CT.

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12. “Unless Roosevelt is wise enough”: Russell Cornell Leffingwell Papers.

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13. “So far as inflation goes”: Arthur Meier Schlesinger, The Age of Roosevelt: The Crisis of the Old Order, 1919–1933 (Houghton Mifflin, 1957), 469.

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14. He had written it: E. J. Perkins, “The Divorce of Commercial and Investment Banking: A History,” The Banking Law Journal 88, no. 6 (1971): 483–528.

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15. Glass formally declined: Raymond Moley, The First New Deal (Harcourt, Brace & World, 1966), 83.

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16. had also come under increasing pressure: Alexander Dana Noyes, “Influence of the Michigan Bank Episode—the Court of Home and Foreign Sentiment,” New York Times, February 20, 1933.

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17. Roosevelt named William Woodin: “Hull and Woodin Named for Cabinet to Speed Action on World Economics; Roosevelt Confers with French Envoy,” New York Times, February 22, 1933.

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18. “sick of this”: Moley, After Seven Years, 122.

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19. Hoover immediately instructed: Moley, After Seven Years, 143–44.

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20. “Every last man who has”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” February 20, 1933, Herbert Hoover Presidential Library and Museum.

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21. Mills reported back to Hoover: Moley, After Seven Years, 143–44.

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22. When Roosevelt finally replied: Moley, The First New Deal, 143.

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23. Roosevelt needed a clean slate: Broadus Mitchell, The Depression Decade: From New Era Through New Deal, 1929–41 (Taylor & Francis, 2017).

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24. “I realize that if these declarations”: Herber Hoover, letter to David A. Reed, February 20, 1933; Schlesinger, The Age of Roosevelt, 477.

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25. Roosevelt’s “new deal” campaign plank: “Text of Governor Roosevelt’s Speech at the Convention Accepting the Nomination,” New York Times, July 3, 1932; Ronald Sullivan, “Stuart Chase, 97; Coined Phrase ‘a New Deal,’ ” New York Times, November 17, 1985.

Franklin D. Roosevelt, during his speech accepting the Democratic nomination for president on July 2, 1932, in Chicago, Illinois, said: “I pledge you—I pledge myself—to a new deal for the American people.” Economist Stuart Chase, a member of Roosevelt’s “brain trust,” is credited with having coined the phrase “a new deal.”

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CHAPTER THIRTY-THREE

1. Charles Mitchell made his way: Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010), 132.

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2. Tanned and rested: “5 Bankers Called in Market Inquiry,” New York Times, February 8, 1933.

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3. After he had been served: “Pecora Subpoenas 3 in Stock Inquiry,” New York Times, January 31, 1933.

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4. along with a number of other: “Pecora Subpoenas 3 in Stock Inquiry,” New York Times; “5 Bankers Called in Market Inquiry,” New York Times.

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5. violation of protocol: Perino, The Hellhound of Wall Street, 88–90.

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6. made her debut: “Tuxedo Park Ball Is Brilliant Event,” New York Times, October 30, 1932.

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7. a “supper dance”: “Miss Rita Mitchell Has Supper Dance Debut at Her Home,” New York Times, December 27, 1932.

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8. the Federal Reserve Bank in Chicago: “All Chicago Banks Closed,” New York Times, March 5, 1933.

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9. “an impressive figure”: Ferdinand Pecora, Wall Street Under Oath: The Story of Our Modern Money Changers (Simon & Schuster, 1939).

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10. “like the mumbling of bees”: Perino, The Hellhound of Wall Street, 138.

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11. “You see, the National City Company”: “Mitchell Avoided Income Tax in 1929 by ‘$2,800,000 Loss,’ ” New York Times, February 22, 1933.

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12. “the loftiest moral tone”: Pecora, Wall Street Under Oath.

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13. Mitchell’s own annual salary: “Mitchell Avoided Income Tax in 1929 by ‘$2,800,000 Loss,’ ” New York Times.

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14. “Do you think it?”: “Mitchell Avoided Income Tax in 1929 by ‘$2,800,000 Loss,’ ” New York Times.

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15. Pecora had banned photographers: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University; Perino, The Hellhound of Wall Street.

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16. As the hearing proceeded: United States v. Charles E. Mitchell, 32 B.T.A. 1093, 1935 BTA LEXIS 843 (June 1933).

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17. But because the bank had already: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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18. “If I go in and buy”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, fraser.stlouisfed.org/title/87.

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19. “I held in the midst of the panic”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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20. He acknowledged that he had purchased: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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21. “frankly, for tax purposes”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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22. “You did not have a similar”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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23. The gangster Al Capone: “Prison Doors Close Behind Al Capone,” New York Times, May 5, 1932.

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CHAPTER THIRTY-FOUR

1. Mitchell’s first day of testimony: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239, Part 6, 1811, fraser.stlouisfed.org/title/87.

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2. reporters besieged him: “Senator Wheeler Assails Mitchell,” New York Times, February 23, 1933.

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3. “I shall make no statement”: “Senator Wheeler Assails Mitchell,” New York Times.

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4. When Pecora walked over that morning: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University.

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5. creating an “incorrect impression”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954.

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6. “Whatever wrong impression was created”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954.

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7. “sustain the morale of the organization”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954.

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8. “know that the National City Company”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932– 1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954, 1990.

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9. “Isn’t this the spectacle”: “Mitchell for Federal Control,” New York Times, February 25, 1933.

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10. “in view of these letters?”: “Mitchell for Federal Control,” New York Times.

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11. there was nothing nefarious: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 239: Part 6, 1817, fraser.stlouisfed.org/title/87#33954, 1990.

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12. “People running poker games”: “Mitchell for Federal Control,” New York Times.

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13. “We are trying to remedy”: “Bankers Facing Threat of Trial in Federal Court,” Virginian-Pilot, February 25, 1933.

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14. After the revelations: “Federal Inquiry on National City and Insull Starts,” New York Times, February 25, 1933.

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15. Before the week ended: “Financial Inquiry Slated to Continue,” New York Times, February 26, 1933.

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16. “Nothing will restore confidence”: “Financial Inquiry Slated to Continue,” New York Times, February 26, 1933.

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17. Editorialists at newspapers: Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010), 220.

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18. The influential journalist: Perino, The Hellhound of Wall Street, 223.

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19. “No set of men”: Walter Lippmann, “The Morgan Inquiry,” Flint Daily, May 31, 1933.

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20. “prove conclusively the truth”: Ray Tucker, “Bank Reform Need Proven, Glass Insists,” Scripps Howard News, February 24, 1933.

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21. At about 11:30 p.m.: Pecora, “Reminiscences of Ferdinand Pecora, 1962.”

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22. “I personally have been brought”: “J.H. Perkins Gets Mitchell’s Post,” Times Union, February 27, 1933.

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23. Mitchell’s resignation should be accepted: Perino, The Hellhound of Wall Street.

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24. “Of course, Mr. Pecora”: Pecora, “Reminiscences of Ferdinand Pecora, 1962.”

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25. “he’d have to resume the stand”: When Mitchell finished his testimony on March 3, 1933, he left the Senate building with his head hung low. Pecora was in conversation with Senator Norbeck when they both noticed Mitchell from afar walking to the train station by himself. “There’s a famous picture, Pecora, I suppose you’re familiar with it, that portrays the great Napoleon on his way to St. Helena, on the decks of a steamer conveying him from France to exile,” Norbeck said. “Mitchell’s figure very much resembles that of Napoleon in that picture.”

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26. The March 6, 1933, issue: “Damnation of Mitchell,” Time, March 6, 1933.

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CHAPTER THIRTY-FIVE

1. he and his family visited: “Hoover’s Last Day a Rush of Work,” New York Times, March 4, 1933.

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2. an unscheduled meeting: Raymond Moley, After Seven Years (Harper & Brothers, 1929), 145; Charles Rappleye, Herbert Hoover in the White House: The Ordeal of the Presidency (Simon & Schuster, 2016), 561.

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3. “Don’t hoard it”: Theodore Joslin, “Diary of Theodore Joslin, Secretary to President Herbert Hoover,” February 27, 1933, Herbert Hoover Presidential Library and Museum.

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4. Stock Exchange had stopped trading: “Exchanges Close for Bank Holiday,” New York Times, March 5, 1933.

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5. Roosevelt received a letter: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 329.

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6. “Urban populations cannot do”: Lamont, The Ambassador from Wall Street, 329.

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7. “How horrible it is for me”: Rappleye, Herbert Hoover in the White House, 449.

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8. the outflow of currency and gold: Moley, After Seven Years, 144.

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9. “Like hell I will!”: Jonathan Darman, Becoming FDR: The Personal Crisis That Made a President (Random House, 2022), 325.

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10. Back at the Mayflower: William E. Leuchtenburg, The American President: From Teddy Roosevelt to Bill Clinton (Oxford University Press, 2015), 147.

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11. “I think the president”: Carter Glass, letter to Russell Cornell Leffingwell, July 12, 1933, Carter Glass Papers, University of Virginia, Charlottesville, VA.

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12. “Lamont called from New York”: Moley, After Seven Years, 146.

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13. Hoover made one last effort: Raymond Moley, The First New Deal (Harcourt, Brace & World, 1966), 150.

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14. “believed the country should go temporarily”: Moley, After Seven Years, 146.

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15. “Planning to close them”: Rixey Smith and Norman Beasley, Carter Glass: A Biography (Longmans, Green and Co., 1939), 341.

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16. Roosevelt and Hoover rode together: “Hoover, as Citizen, Here on Way Home,” New York Times, March 5, 1933.

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17. Just before the inauguration: Lamont, The Ambassador from Wall Street, 330.

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18. facing the crowd of 150,000: Edward G. Lengel, “Franklin Delano Roosevelt’s Historic First Inauguration,” The White House Historical Association, January 4, 2017.

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19. laid out his vision: “Text of the Inaugural Address; President for Vigorous Action,” New York Times, March 5, 1933.

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20. “Practices of the unscrupulous”: “Text of the Inaugural Address; President for Vigorous Action,” New York Times.

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21. “to include all ramifications”: Edward Morris, Wall Streeters: The Creators and Corruptors of American Finance (Columbia University Press, 2015), 61.

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22. “a thorough and complete investigation”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 143, fraser.stlouisfed.org/title/87.

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23. Roosevelt ended the epidemic: Franklyn Waltman Jr., “Roosevelt Proclaims National Bank Holiday to Last Until Friday,” Baltimore Sun, March 6, 1933.

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24. briefly defied the order: David Cannadine, Mellon: An American Life (Alfred A. Knopf, 2006), 467.

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25. Yale psychologist Edward Robinson: Edmund O. Stillman, The American Heritage History of the 20’s & 30’s (American Heritage Publishing Company, 1970), 230.

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26. “It is ridiculous and misleading”: “On Gold Standard, Woodin Declares,” New York Times, March 6, 1933.

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27. more than five thousand bank failures: “History of Banking and Deposit Insurance, 1930–1939,” Federal Deposit Insurance Corporation, May 15, 2025, https://www.fdic.gov/history/1930-1939.

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28. American banks began to reopen: William L. Silber, “Why Did FDR’s Bank Holiday Succeed?,” Federal Reserve Bank of New York Policy Review, July 2009.

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29. all but nine were active immediately: “Nine Banks Here Unlicensed As Yet,” New York Times, March 14, 1933.

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30. the “Roosevelt market”: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969), 149.

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31. a flurry of bills: R. L. Duffus, “Roosevelt’s Record: Platform and Deeds,” New York Times, May 14, 1933; Arthur Schlesinger Jr., “The ‘Hundred Days’ of F.D.R,” New York Times, April 10, 1983.

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CHAPTER THIRTY-SIX

1. On the morning of March 8: “National City Bank to Drop Affiliate,” New York Times, March 8, 1933.

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2. The fine print of Glass’s bill: Harold van Buren Cleveland and Thomas F. Huertas, Citibank, 1812–1970 (Harvard University Press, 1985).

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3. waded into the fray: “The 73d Congress Faces the Banking Problem,” Congressional Digest 12, issue 4 (April 1933).

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4. “I do not think”: “Statement Issued by President Aldrich,” Associated Press, March 9, 1933.

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5. Aldrich was the brother-in-law: Henry Robinson Luce, Fortune (Time, Incorporated, 1936).

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6. Aldrich promptly ousted: “Business: Wiggin Out,” Time, January 2, 1933.

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7. “A clashing of the Rockefeller interests”: “Chase Head Urges Reforms in Banking,” Buffalo News, March 9, 1933.

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8. Morgan partner Russell Cornell Leffingwell: “New Yorker May Succeed Glass,” Chicago Tribune, November 24, 1919.

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9. As the bill was coming together: Russell Cornell Leffingwell Papers, Archives at Yale, New Haven, CT.

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10. “have approached me”: Winthrop W. Aldrich, letter to Franklin D. Roosevelt, May 22, 1933, Franklin D. Roosevelt, Papers as President: The President’s Personal File, part 16: PPF 7501-8000, 1933–1945, Franklin D. Roosevelt Presidential Library and Museum.

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11. Roosevelt invited Aldrich: Franklin D. Roosevelt, Papers as President: The President’s Personal File, part 16: PPF 7501-8000, 1933–1945.

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12. “believes that Mr. Aldrich”: George T. McJimsey, ed., Documentary History of the Franklin D. Roosevelt Presidency, vol. 18 (University Publications of America, 2001), 121.

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13. “More and more”: Carter Glass Papers, University of Virginia, Charlottesville, VA.

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14. a fight nearly broke out: “Long and Glass Almost in Fisticuffs in Senate,” Charlotte News, March 12, 1933.

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15. after nearly being thrown out: “Long Impeached,” Associated Press, April 13, 1929.

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16. Glass privately described him: Alan Brinkley, Voices of Protest: Huey Long, Father Coughlin, & the Great Depression (Knopf Doubleday Publishing Group, 2011), 77.

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17. Long had his own sights set: Long never achieved higher office. Though he was discussed as a presidential candidate for 1936, he was assassinated before it could come to pass. In September 1935, he was shot while at the Louisiana State Capitol building and later died of internal bleeding.

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18. “All I care is what the boys”: Brinkley, Voices of Protest, 76.

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19. Soon after the Senate passed: “Glass and Long Clash Sharply,” Buffalo Times, March 12, 1933.

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20. “I am tired of this man”: “Glass and Long Clash Sharply,” Buffalo Times.

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21. “Now you listen here!”: “Glass and Long Clash Sharply,” Buffalo Times.

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22. tried to quell the tension: “Glass, Long in Hot Clash on Bank Crisis,” Springfield Press, March 12, 1933.

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23. After the skirmish: “Congressional Dangers,” Star Tribune, March 27, 1933.

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24. When the filibuster: “National Affairs: Hard Money & Soft,” Time, February 6, 1933.

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25. “Now that you take”: “National Affairs: Hard Money & Soft,” Time.

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26. the bill died in the House: “President to Ask Bank Legislation,” New York Times, March 3, 1933.

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27. accompanied by a long: “National Affairs: Hard Money & Soft,” Time.

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28. “It is safer”: Franklin D. Roosevelt, “Fireside Chat on Banking, March 12, 1933,” The American Presidency Project, n.d., presidency.ucsb.edu/node/207762.

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CHAPTER THIRTY-SEVEN

1. clutching an arrest warrant: “Mitchell Arrested on Cummings’ Order,” Boston Globe, March 22, 1933.

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2. put on his coat and hat: “Mitchell Held for Evasion of U.S. Income Tax,” Associated Press, March 22, 1933.

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3. had met with federal investigators: “Grand Jury Hears Mitchell Tax Case,” Daily News, March 23, 1933; “National City Ex-Chairman Freed in Bail,” Associated Press, March 22, 1933.

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4. The New York Times opined: “Cummings Surveys Mitchell Evidence,” New York Times, March 18, 1933.

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5. Because the statute of limitations: “Mitchell Evidence Goes to Grand Jury,” New York Times, March 23, 1933.

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6. He was accused: “Mitchell Tax Jury Debates 10 Hours, Then Is Locked Up,” New York Times, June 22, 1933. Mitchell was accused of evading $858,000 in taxes across 1929 and 1930.

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7. The government later added: “Mitchell Indicted on New Tax Charge,” New York Times, April 14, 1933.

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8. The onetime darling: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 81–103.

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9. “The only difference”: Chicago Tribune, February 25, 1933.

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10. he was being singled out: “Mitchell Indicted on New Tax Charge,” New York Times.

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11. serve up to ten years: “Mitchell Tax Jury Debates 10 Hours, Then Is Locked Up,” New York Times.

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12. Mitchell left the courthouse: “Mitchell Arrested as Tax Evader,” New York Times, March 22, 1933.

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13. trial was set for mid-April: “Mitchell Indicted on New Tax Charge,” New York Times.

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14. Two days later, on March 23: Thomas W. Lamont Papers, 1894–1948, box 173, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA; Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 336–39.

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15. rented Roosevelt’s family home: “Roosevelt House: Saving a National Treasure for a New Generation, 1943–2023,” Roosevelt House Public Policy Institute at Hunter College.

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16. “what you want us to do”: Lamont Papers, 1894–1948; Lamont, The Ambassador from Wall Street, 336–39.

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17. “Not under two years”: Lamont Papers, 1894–1948, box 127; Lamont, The Ambassador from Wall Street, 336–39.

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18. “You know that men like Jack”: Lamont Papers, 1894–1948; Lamont, The Ambassador from Wall Street, 336–39.

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19. Lamont received an unexpected letter: Lamont Papers, 1894–1948.

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CHAPTER THIRTY-EIGHT

1. “The most dramatic show”: Howard Vincent O’Brien, “Courtroom,” Boston Globe, June 7, 1933.

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2. The proceedings opened: United States v. Charles E. Mitchell, 32 B.T.A. 1093, 1935 BTA LEXIS 843, opening statements (May 16, 1933).

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3. the federal courtroom had: O’Brien, “Courtroom.”

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4. Wrinkled linoleum covered the floors: O’Brien, “Courtroom.”

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5. “stiff, straight-backed chairs”: O’Brien, “Courtroom.”

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6. flashy criminal defense attorney: O’Brien, “Courtroom.”

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7. the epitome of the conservative banker: O’Brien, “Courtroom.”

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8. Medalie had been sick: “Trial of Mitchell Is Delayed Again,” New York Times, May 7, 1933.

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9. “to deceive the government”: “Mitchell Is Painted Up as ‘Big Fish,’ ” Associated Press, May 17, 1933.

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10. “another device to escape payment”: “Mitchell Is Painted Up as ‘Big Fish,’ ” Associated Press.

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11. he told the jury: “Mitchell Called Robber, Patriot,” Associated Press, May 17, 1933.

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12. “When mob psychology controls”: “Mitchell Is Painted Up as ‘Big Fish,’ ” Associated Press.

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13. “God alone could foretell”: “Mitchell Is Painted Up as ‘Big Fish,’ ” Associated Press.

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14. Mitchell was now “worse than broke”: “Mitchell’s Stock Deals with Wife Presented to Jury,” Associated Press, May 18, 1933.

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15. “Almost any other man”: “Mitchell’s Stock Deals with Wife Presented to Jury,” Associated Press.

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16. The first witness: United States v. Charles E. Mitchell.

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17. Barrett testified that from 1922: “Mitchell Comment on Tax Sale Barred,” New York Times, May 19, 1933.

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18. “On the 20th of December”: United States v. Charles E. Mitchell.

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19. “Isn’t it a fact”: “Testimony Takes a Monotonous Turn in Mitchell Case,” Associated Press, May 20, 1933.

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20. homed in on the fact: “No Mitchell Money Passed,” Associated Press, May 18, 1933.

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21. waiting to begin her testimony: “Mitchell on Stand Defends Tax Deals as Forced by Crash,” New York Times, June 6, 1933.

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22. Mitchell finally took the stand: United States v. Charles E. Mitchell.

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23. Wearing a dark blue suit: “Mitchell on Stand Defends Tax Deals as Forced by Crash,” New York Times.

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24. “earnest, husky voice”: “Mitchell Takes Stand at Trial,” Associated Press, June 6, 1933.

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25. Mitchell rocked back and forth: “Mitchell Takes Stand at Trial,” Associated Press.

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26. “There was not a man”: “Mitchell on Stand to Explain Actions Involving Transfer,” Associated Press, June 6, 1933.

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27. “as I saw the market”: “Mitchell Explains Disputed Tax Deals as Forced by Stock Market,” New York Times, June 6, 1933.

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28. “My loss on those 18,300 shares”: “Mitchell Gives Story on Stand,” Associated Press, June 6, 1933.

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29. “I considered selling”: “Mitchell Gives Story on Stand,” Associated Press.

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30. “Their petition had been considered”: “Mitchell Gives Story on Stand,” Associated Press.

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31. “I believed in that stock”: “Mitchell Gives Story on Stand,” Associated Press.

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32. “She did not have sufficient cash”: “Mitchell Explains Disputed Tax Deals as Forced by Stock Market,” New York Times.

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33. “She had an enthusiasm”: “Mitchell Explains Disputed Tax Deals as Forced by Stock Market,” New York Times.

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34. “because it was a nightmare”: “Mitchell Cross-Examination Begun by Medalie on Banker’s Second Day on Stand,” New York Times, June 7, 1933.

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35. “do you recall whether”: “Mitchell Tells of Morgan Loan,” Associated Press, June 7, 1933.

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36. “I was under great embarrassment”: “Mitchell Tells of Morgan Loan,” Associated Press.

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37. “because I had given myself”: “Mitchell Cross-Examination Begun by Medalie on Banker’s Second Day on Stand,” New York Times.

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38. “Later, Mr. Swaine”: “Mitchell Says Stock Drained Wife’s Estate,” Associated Press, June 7, 1933.

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39. “I thought she ought to buy”: “His Wife’s Brother Defends Mitchell,” Associated Press, June 15, 1933.

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40. “who can so read the law”: United States v. Charles E. Mitchell.

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41. as “sanctimonious rubbish”: “Mitchell Tax Case Goes to Jury Today,” New York Times, June 21, 1933.

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42. “as much a right to expect”: “Mitchell Tax Case Goes to Jury Today,” New York Times.

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43. “Let him face the music”: “Mitchell Tax Case Goes to Jury Today,” New York Times.

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CHAPTER THIRTY-NINE

1. Glass was asked to insert: Russell Cornell Leffingwell Papers, Archives at Yale, New Haven, CT.

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2. “I was rather surprised”: Russell Cornell Leffingwell Papers.

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3. “entirely drafted by Mr. Aldrich”: In writing Leffingwell, Glass added, “I am writing this much in confidence because of the personal discussions we had when the bill passed the Senate at the preceding session of Congress, and because I am personally concerned to have you know that my own view had not materially altered. I do not care much what others may think.”

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4. “This is not the first indication”: Paul R. Mallon, “The National Whirligig: News Behind the News,” Times-Standard, May 18, 1933.

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5. began a public campaign: M. S. Rukeyser, “The Financial World,” World-News, February 3, 1933.

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6. the wife of the Fed chairman: Martin Horn, J.P. Morgan & Co. and the Crisis of Capitalism: From the Wall Street Crash to World War II (Cambridge University Press, 2022), 155.

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7. he stood with “sound money” stalwarts: “Administration Distinguished by Destruction, Delay, Deceit and Despair, Roosevelt Says,” Associated Press, November 5, 1932.

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8. First came a temporary gold embargo: “Roosevelt Orders 4-Day Bank Holiday, Puts Embargo on Gold, Calls Congress,” New York Times, March 6, 1933.

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9. The United States was off: “Gold Standard Dropped for the Present to Lift Prices and Aid Our Trade Position; Plans for Controlled Inflation Drafted,” New York Times, April 20, 1933.

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10. “the end of Western civilization”: Raymond Moley, After Seven Years (Harper & Brothers, 1929), 160.

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11. Glass went ballistic: “Ban on Gold Payments Asked in Law,” St. Louis Globe-Democrat, May 27, 1933.

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12. “Telegrams are coming in”: “Steagall for Guarantee of Sound Banks’ Deposits,” St. Louis Post-Dispatch, March 8, 1933.

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13. “the use of the word ‘guarantee’ ”: Press Conference #1, March 8, 1933, Series 1, Press Conferences of President Franklin D. Roosevelt, 1933–1945, Franklin D. Roosevelt Presidential Library and Museum, National Archives and Records Administration.

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14. After the Panic of 1907: Clark Warburton, “Deposit Insurance in Eight States During the Period 1908–1930,” Federal Deposit Insurance Corporation, 1959.

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15. Major banks seized: Haelim Anderson, Mark Paddrik, and Jessie Jiaxu Wang, “Bank Networks and Systemic Risk: Evidence from the National Banking Acts,” American Economic Review 109, no. 9 (2019): 3125–3161.

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16. In April, Glass added: “Deposit Insurance Added to Bank Bill,” New York Times, April 5, 1933.

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17. Steagall’s version sailed through the House: “Bank Deposit Bill Approved by House,” New York Times, May 24, 1933.

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18. who had been seen as allies: “The Outcome of a Feud,” Wiregrass Farmer, May 4, 1933.

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19. The Steagall plan: “Bank Deposit Bill Approved by House,” New York Times.

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20. “At my interview with you”: Winthrop Aldrich, letter to Franklin D. Roosevelt, May 22, 1933, Franklin D. Roosevelt Presidential Papers, Franklin D. Roosevelt Presidential Library and Museum.

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21. His own vice president: “Bank Bills Pushed in Both Chambers,” New York Times, May 20, 1933.

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22. “who knows more about money”: Will Rogers, “Rogers Extols Roosevelt’s Handling of Bonus Parade,” New York Times, May 20, 1933.

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CHAPTER FORTY

1. Lamont stepped into the Senate Caucus: “Senators Question Him; Banking Firm Revalued Securities and Showed $21,000,000 Loss,” New York Times, May 24, 1933.

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2. brought so many people to Washington: “National Affairs: Wealth on Trial,” Time, June 12, 1933.

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3. Drew Pearson called Lamont: Drew Pearson and Robert S. Allen, More Merry-Go-Round (Liveright, 1932).

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4. Pecora had met privately with Lamont: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University; Ferdinand Pecora, Wall Street Under Oath: The Story of Our Modern Money Changers (Simon & Schuster, 1939).

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5. He received a “chilly” response: William Henry Harbaugh, Lawyer’s Lawyer: The Life of John W. Davis (Oxford University Press, 1973).

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6. “three-quarters righteous tribune”: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969).

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7. It was a surreal: Pecora, “Reminiscences of Ferdinand Pecora, 1962”; Pecora, Wall Street Under Oath; Michael Perino, The Hellhound of Wall Street (Penguin Press, 2010).

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8. Davis read the Pujo testimony: Harbaugh, Lawyer’s Lawyer.

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9. “I lined up the partners”: Harbaugh, Lawyer’s Lawyer, 324.

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10. privately referring to him: John Douglas Forbes, J.P. Morgan, Jr., 1867–1943 (University of Virginia Press, 1981), 116.

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11. “The risk of finding”: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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12. Lamont, who saw the hearings: Thomas W. Lamont, letter to Lady Nancy Astor, June 5, 1933.

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13. Paychecks of junior partners: Chernow, The House of Morgan.

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14. When the Lamonts took a vacation: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 292; Chernow, The House of Morgan.

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15. Jack Morgan made: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 3, fraser.stlouisfed.org/title/87.

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16. Pecora gently twirled a pencil: “Senators Question Him,” New York Times.

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17. Then Pecora began: Harbaugh, Lawyer’s Lawyer, 325.

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18. “the stuttering part”: Harbaugh, Lawyer’s Lawyer, 325.

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19. “They are friends of ours”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 64, fraser.stlouisfed.org/title/87.

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20. Pecora made a show of unrolling: Harbaugh, Lawyer’s Lawyer, 326.

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21. granted almost godlike powers: Harbaugh, Lawyer’s Lawyer, 326.

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22. The bank was not allowed: Chernow, The House of Morgan, 365.

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23. “the manners of a prosecuting attorney”: Harbaugh, Lawyer’s Lawyer, 326.

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24. “sex-suppressed old maids”: Harbaugh, Lawyer’s Lawyer, 326.

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25. “I suppose if I went there”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 105, fraser.stlouisfed.org/title/87.

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26. Pecora listed the clients: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 3, fraser.stlouisfed.org/title/87.

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27. Despite his desire for secrecy: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 19, fraser.stlouisfed.org/title/87.

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28. Jack Morgan had paid no: “Morgan Paid No Income Tax for the Years 1931 and 1932; Neither Did His Partners,” New York Times, May 24, 1933.

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29. Of the twenty Morgan partners: “Morgan Paid No Income Tax for the Years 1931 and 1932; Neither Did His Partners,” New York Times; Chernow, The House of Morgan, 366.

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30. “I might point out”: “Morgan Paid No Income Tax for the Years 1931 and 1932; Neither Did His Partners,” New York Times.

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31. joking with the security guards: Harbaugh, Lawyer’s Lawyer, 325.

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32. Tom found himself under fire: “Shift in Accounts Paid for Securities,” New York Times, June 10, 1933.

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33. But the real fireworks came: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 2, 340, fraser.stlouisfed.org/title/87.

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34. “Senator Glass almost wrecked”: Heywood Broun, “It Seems to Me,” Buffalo Times, June 6, 1933.

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35. When a voter: “Committee Majority Will Support Pecora,” Daily News Leader, May 30, 1933.

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36. When the hearings resumed: Chernow, The House of Morgan.

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37. amid swirling headlines: “Morgan Paid No Income Tax for the Years 1931 and 1932; Neither Did His Partners,” New York Times.

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38. Morgan was approached by a reporter: Ray Tucker, “J.P. Morgan Firm Made Profits During 1929 Crash, Probe Shows,” Scripps Howard News Service, June 2, 1933.

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39. “Mr. Morgan, this is Miss Graf”: “National Affairs: Wealth on Trial,” Time, June 12, 1933.

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40. “A Midget Gets a Thrill”: “A Midget Gets a Thrill,” Baltimore Sun, June 2, 1933.

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41. Pecora turned his questioning: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 173, fraser.stlouisfed.org/title/87.

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42. Pecora held a cigar: Harbaugh, Lawyer’s Lawyer, 325.

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43. “Many thanks for your trouble”: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 1, 173–74, fraser.stlouisfed.org/title/87.

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44. Jack Morgan calmly watched: “High Officials on List of Favored Clientele in J.P. Morgan Firm,” Associated Press, May 25, 1933.

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45. Whitney smoked a cigarette: “High Officials on List of Favored Clientele in J.P. Morgan Firm,” Associated Press.

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46. “It occurred to me this morning”: Chernow, The House of Morgan.

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47. “Here was a firm of bankers”: “Why It Hurts,” New York Times, May 27, 1933.

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48. “We naturally turned in part”: Chernow, The House of Morgan; Lamont, The Ambassador from Wall Street, 358.

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49. “What undoubtedly upset me most”: Lamont, The Ambassador from Wall Street, 358.

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50. Lamont appeared again: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 2, 847–51, fraser.stlouisfed.org/title/87.

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51. “a very strong popular delusion”: Lamont, The Ambassador from Wall Street, 347–48.

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52. Pecora was completing the hearings: Stock Exchange Practices: Hearings Before the Committee on Banking and Currency, United States Senate (1932–1934), Hearings on S. Res. 84 and S. Res. 56: Part 2, 878, fraser.stlouisfed.org/title/87.

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CHAPTER FORTY-ONE

1. to vacation in Maine: “Roosevelt Starts Vacation Cruise,” Associated Press, June 17, 1933.

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2. “the best piece”: “Roosevelt Felicitates Glass,” Buffalo News, June 14, 1933.

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3. “You old warrior!”: “Roosevelt Calls Recovery Act Most Sweeping Law in Nation’s History,” New York Times, June 17, 1933.

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4. Congress stayed in session: “Expect Congress to Adjourn Soon,” New York Times, June 13, 1933.

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5. “If it had not been”: “Roosevelt Hails Goal,” New York Times, June 17, 1933.

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6. “This bill has more lives”: “Roosevelt’s Pen Puts Recovery Plan in Motion,” Kansas City Journal, June 16, 1933.

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7. “I’m getting writer’s cramp”: “Roosevelt Signs Vital Bills, Leaves for Rest,” San Francisco Examiner, June 17, 1933.

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8. Bank deposits would be insured: “Glass Bank Bill Passed by Senate,” New York Times, May 26, 1933.

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9. “I have been utterly unable”: Russell Cornell Leffingwell Papers, Archives at Yale, New Haven, CT.

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10. “so much hunger and distress”: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990), 376.

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11. Glass, ever the curmudgeon: “Carter Glass Day Plans Are Dropped upon His Request,” News and Advance, July 16, 1933.

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CHAPTER FORTY-TWO

1. After nearly six weeks of testimony: “Mitchell Acquitted, Attacks Tax Laws,” Daily News, June 23, 1933.

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2. Mitchell occasionally left the courtroom: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times, June 23, 1933.

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3. His weight had dropped: “Mitchell Leaves for a ‘Long Rest,’ ” New York Times, June 24, 1933.

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4. By 10:30 p.m. that evening: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times.

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5. Some jurors wanted to know: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times.

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6. “It must be a conviction!”: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times.

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7. He placed a page on top that read: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times.

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8. “Gentlemen, have you reached a verdict?”: “Mitchell Unable to Utter Word on Being Exonerated,” Springfield Weekly Republican, June 29, 1933.

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9. he started to cry: “Mitchell Cleared, Weeps at Verdict; Ovation in Court,” New York Times.

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10. “Thank you, sir, thank you, sir”: “Mitchell Acquitted, Grips Jurors’ Hands,” Associated Press, June 23, 1933.

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11. “Thanks, Max, thanks”: “Mitchell Acquitted, Grips Jurors’ Hands,” Associated Press.

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12. “I can’t say anything now”: “Mitchell Acquitted, Grips Jurors’ Hands,” Associated Press.

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13. “This verdict proves”: “Mitchell Acquitted, Grips Jurors’ Hands,” Associated Press.

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14. The prosecution team: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 81–103.

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15. “Conviction would have branded”: Muskegon Chronicle, June 22, 1933, 4.

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16. Mitchell, still shaking: “Jury Acquits Mitchell; He Sobs Thanks,” Daily News, June 23, 1933.

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17. He was greeted at home: “Jury Acquits Mitchell; He Sobs Thanks,” Daily News.

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18. Reverend F. Marion Smith gave: “Mitchell Case Cited by Mr. Smith in Sermon,” Springfield Daily Republican, June 26, 1933.

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EPILOGUE

1. standing before him looking “thunderstruck”: Edward Lamont, The Ambassador from Wall Street (Madison Books, 1993), 424; Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990).

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2. For that bold: “Business & Finance: Bankers v. Panic,” Time, November 4, 1929.

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3. In 1930, he ascended: “Whitney to Head Stock Exchange; At 41 He Is Youngest Man Ever Nominated for Its Presidency,” New York Times, April 15, 1930.

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4. “You gentlemen are making”: John Brooks, Once in Golconda: A True Drama of Wall Street, 1920–1938 (Harper & Row, 1969).

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5. Nonetheless, by 1934: “Roosevelt Signs Exchange Curb Bill,” New York Times, June 7, 1934.

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6. Joseph Kennedy, a former speculator himself: “Exchange, Labor Boards Named,” New York Times, July 1, 1934.

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7. in late October 1937: “Stock Prices Up Sharply After Drop to New Lows; 7,287,990 Shares Traded,” New York Times, October 20, 1937.

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8. Richard’s high-flying lifestyle: Lamont, The Ambassador from Wall Street, 423–24.

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9. “a very serious jam”: United States Securities and Exchange Commission, In This Matter of Richard Whitney, Edwin D. Morgan, Jr., F. Kingsley Rodewald, Henry D. Mygatt, Daniel G. Condon, John J. McManus, and Estate of John A. Hayes, Individually and as Partners Doing Business as Richard Whitney & Company (U.S. Government Printing Office, 1938), 142.

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10. Douglas, who had succeeded Kennedy: “Douglas Is Named Chairman of SEC,” New York Times, September 22, 1937.

Roosevelt would appoint Douglas to the U.S. Supreme Court less than two years later, in March 1939; after his confirmation in April 1939, he would go on to become the longest-serving justice in the court’s history.

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11. to rail against the “goddamn bankers”: Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (Aspen Publishers, 2003), 157, 203.

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12. “displace the Morgan influence”: Seligman, The Transformation of Wall Street, 203.

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13. “Well, that is a devil”: Lamont, The Ambassador from Wall Street, 424.

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14. Richard eventually admitted to his brother: United States Securities and Exchange Commission, In This Matter of Richard Whitney, 142.

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15. On November 24, Lamont wrote: United States Securities and Exchange Commission, In This Matter of Richard Whitney, 143.

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16. “handling a business properly”: United States Securities and Exchange Commission, In This Matter of Richard Whitney; Lamont, The Ambassador from Wall Street, 425.

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17. “a wise thing”: Lamont, The Ambassador from Wall Street, 424.

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18. the Lamonts had rented: Lamont, The Ambassador from Wall Street.

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19. “His heart began to ‘thump’ ”: Thomas W. Lamont Papers, 1894–1948, Family Correspondence Folder, Baker Library, Historical Collections Department, Harvard Business School, Cambridge, MA; Lamont, The Ambassador from Wall Street, 425.

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20. On March 5, 1938: Ron Chernow, The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance (Simon & Schuster, 1990), 426.

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21. “I am in a jam”: United States Securities and Exchange Commission, In This Matter of Richard Whitney, 15–56; Chernow, The House of Morgan.

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22. Roosevelt learned the news: Chernow, The House of Morgan, 58.

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23. He was indicted for grand larceny: “Whitney Indicted for Theft of $105,000 in Securities in Surprise Move by Dewey,” New York Times, March 11, 1938; “Business: Ex-Knight,” Time, March 21, 1938.

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24. Richard Whitney pleaded guilty: “Whitney Pleads Guilty of Theft,” New York Times, March 15, 1938.

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25. sentenced to five to ten years: “Whitney Goes to Cell Today for Term of 5 to 10 Years,” New York Herald Tribune, April 12, 1938.

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26. The case ensnared: “House Group Probes Link to CCC Camp,” Daily Sentinel, November 21, 1934.

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27. “Just what sort of fellow”: Hanson W. Baldwin and Shepard Stone, eds., We Saw It Happen: The News Behind the News That’s Fit to Print (Simon & Schuster, 1938), 135–36.

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28. Lamont insisted he had no idea: Brooks, Once in Golconda.

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29. “It never occurred to me”: United States Securities and Exchange Commission, In This Matter of Richard Whitney, 743.

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30. “like Alice in Wonderland”: Chernow, The House of Morgan.

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31. The SEC ultimately issued a report: United States Securities and Exchange Commission, In This Matter of Richard Whitney, 181.

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32. a vast conspiracy: Seligman, The Transformation of Wall Street, 172.

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33. Richard Whitney died: Albin Krebs, “Richard Whitney, 86, Dies; Headed Stock Exchange,” New York Times, December 6, 1974.

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34. personally paid back every dollar: Albin Krebs, “Richard Whitney, 86, Dies; Headed Stock Exchange.”

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35. Jack Morgan died in 1943: “J.P. Morgan Dies, Victim of Stroke at Florida Resort,” New York Times, March 13, 1943.

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36. Carter Glass, still serving as senator: “Carter Glass, 88, Dies in Capital,” New York Times, May 29, 1946.

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37. William Durant died in 1947: “William C. Durant,” New York Times, March 23, 1947.

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38. Lamont in 1948: “Thomas W. Lamont, Banker, Dies at 77 in Florida Home,” New York Times, February 3, 1948.

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39. Mitchell in 1955: “C. E. Mitchell, 78, Banker, Is Dead,” New York Times, December 15, 1955.

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40. Pecora served as: “Ex-Justice Ferdinand Pecora, 89, Dead,” New York Times, December 8, 1971.

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41. He organized relief efforts: David E. Hamilton, “Herbert Hoover: Life After the Presidency,” Miller Center.

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42. commission on improving government efficiency: “Hoover Commissions Sought Government Reforms,” New York Times, October 21, 1964.

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43. a respected elder statesman: McCandlish Phillips, “Herbert Hoover Is Dead; Ex-President, 90, Served Country in Varied Fields,” New York Times, October 21, 1964.

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44. Winston Churchill took years to recover: David Lough, No More Champagne: Churchill and His Money (Picador, 2015).

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45. he remained functionally broke: Deborah Cohen, “Why Winston Churchill Was So Bad with Money,” The Atlantic, January/February 2016.

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46. being hit by the car: Winston Churchill, “Winston Churchill Tells How It Feels to Be Run Down by an Automobile,” Ottawa Citizen, January 9, 1932.

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47. President Hoover ceremoniously turned: “Empire State Tower, Tallest in World, Is Opened by Hoover,” New York Times, May 2, 1931.

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48. The nascent National Broadcasting Company: “Television Station for Empire State,” New York Times, July 25, 1931.

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49. less than 20 percent occupied: David Farber, Everybody Ought to Be Rich: The Life and Times of John J. Raskob, Capitalist (Oxford University Press, 2013), 277.

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50. gave space away for free: Farber, Everybody Ought to Be Rich, 277.

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51. the press dubbed it: Neal Bascomb, “Before the Crash: Bringing in the Blue Chips,” New York Times, May 26, 2005.

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52. Because Raskob was personally averse: Farber, Everybody Ought to Be Rich, 306–8.

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53. Raskob fought one last big fight: “Du Pont in New Tax Plea; He and Raskob Say Judge’s Ailments May Have Hurt Case,” New York Times, November 7, 1941; Farber, Everybody Ought to Be Rich, 317.

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54. In 1945, tragedy struck: “B-25 Crashes in Fog,” New York Times, July 29, 1945.

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55. a year after Raskob’s death: “104 Steps, 600 Documents—and a Skyscraper Is Sold,” Life, January 7, 1952.

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56. William Durant and his wife: Axel Madsen, The Deal Maker: How William C. Durant Made General Motors (John Wiley & Sons, 1999), 257.

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57. To the outside world: Maury Klein, Rainbow’s End: The Crash of 1929 (Oxford University Press, 2003), 266.

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58. “legislation to give depositors”: Bernard A. Weisberger, The Dream Maker: William C. Durant, Founder of General Motors (Little, Brown and Company, 1979).

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59. Durant had been accused: Weisberger, The Dream Maker.

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60. “The word TRAITOR”: W. C. Durant, “Durant Addresses Appeal to N. Y. Stock Exchange,” Detroit Free Press, March 30, 1933.

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61. Despite being broke: Lawrence R. Gustin, Billy Durant: Creator of General Motors (Eerdmans, 1973).

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62. “My petition in bankruptcy”: “W.C. Durant Files Bankruptcy Plea,” New York Times, February 9, 1936.

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63. continued to live the high life: “Explorers in State on Honeymoon Trip,” Miami Herald, November 21, 1933.

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64. “Let others sit by the fire”: “Explorers in State on Honeymoon Trip,” Miami Herald.

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65. Durant struggled to get back: Weisberger, The Dream Maker, 341, 352.

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66. “You’d never know he was broke”: Weisberger, The Dream Maker, 342.

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67. in the bankruptcy filing: Weisberger, The Dream Maker, 342.

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68. A silk Beauvais Aubusson tapestry: “Durant Auction Brings $6,407,” New York Times, September 16, 1938.

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69. went for $44,000: Weisberger, The Dream Maker, 343.

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70. Later that year, Margery: “Navy Officer, Sleuth Held in Dope Sales,” Star-Ledger, September 26, 1947.

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71. Durant’s only son: “Cliff Durant Dies Suddenly,” Los Angeles Times, November 1, 1937.

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72. the house photographer: Richard Smitten, Jesse Livermore: World’s Greatest Stock Trader (John Wiley & Sons, 2001), 253–55.

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73. “the last picture you will take”: “Livermore Gave Photographer Suicide Tip in N.Y. Night Club,” Republican, November 29, 1940.

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74. “Just a joke, darling”: “Livermore Gave Photographer Suicide Tip in N.Y. Night Club,” Republican.

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75. “Do men of your kind”: Studs Terkel, My American Century (The New Press, 1997), 102–3.

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76. he heard a concert singer: Tom Rubython, Jesse Livermore Boy Plunger: The Man Who Sold America Short in 1929 (The Myrtle Press, 2015), 326.

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77. The Livermores had lived: “Jesse Livermore Ends Life in Hotel,” New York Times, November 29, 1940.

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78. the elegance of the Sherry-Netherland: “New 5th Av. Hotel in Boomer Chain,” New York Times, March 8, 1927.

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79. Livermore chain-smoked and scribbled: “Jesse Livermore Ends Life in Hotel,” New York Times.

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80. gold pen on a chain: Smitten, Jesse Livermore.

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81. Livermore rose and walked back: Smitten, Jesse Livermore.

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82. “He looked normal”: “Jesse Livermore Ends Life in Hotel,” New York Times.

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83. He pressed the cold steel muzzle: Smitten, Jesse Livermore.

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84. “Can’t help it”: Smitten, Jesse Livermore.

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85. “like a human being”: Smitten, Jesse Livermore, 197.

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86. One day after the crash: Smitten, Jesse Livermore, 203.

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87. “too big a hurry”: Smitten, Jesse Livermore, 254.

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88. About one hundred people: “Jesse Livermore Buried,” New York Times, December 1, 1940.

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89. Livermore’s net worth: “Deficit of $361,010 in Livermore Estate,” New York Times, January 21, 1942.

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90. “I honestly mean it”: “Return of Mitchell,” Time, February 4, 1935.

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91. “stripped of all his possessions”: “Find Mitchell Is Not Guilty,” Wall Street Journal, June 23, 1933.

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92. The building at 934 Fifth Avenue: “Vichy Buys the Palatial Mitchell Mansion on Fifth Ave. for Use as Consulate General,” New York Times, March 26, 1942.

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93. Tuxedo Park had to be sold: “Mitchell Estate Sold for $15,200,” New York Times, June 9, 1940.

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94. Mitchell kept up: Thomas F. Huertas and Joan L. Silverman, “Charles E. Mitchell: Scapegoat of the Crash?,” Business History Review 60, no. 1 (Spring 1986): 81–103.

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95. “If Charlie had indulged”: “C.E. Mitchell Hoping for a Comeback,” Hartford Courant, February 13, 1934.

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96. That a jury failed to convict: Reports of the United States Board of Tax Appeals (U.S. Government Printing Office, 1936).

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97. “The amounts involved are not important”: Franklin D. Roosevelt, letter to E. S. Greenbaum, March 9, 1939, OF 3169, folder, Mitchell, Charles E., 1933–1938, Franklin D. Roosevelt Presidential Library and Museum.

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98. he set up a consulting firm: “Mitchell Starts Anew in Wall St.,” New York Times, January 22, 1935.

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99. “poor fellow going back”: “Return of Mitchell,” Time.

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100. accepted the position: “C.E. Mitchell Joins Blyth & Co., Inc.,” New York Times, June 18, 1935.

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101. “was left to my own devices”: Craig Mitchell, “I Remember Fifth,” Town & Country, September 1989.

GO TO NOTE REFERENCE IN TEXT

102. In 1936, the Mitchells’ daughter: “George Adam Rentschler Weds Rita Rend Mitchell,” New York Times, November 12, 1936.

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103. “It was about time”: “The Crash of 1929,” American Experience, aired April 24, 2012, on PBS.

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104. In 1939, Mitchell was again compelled: “Testimony of Charles E. Mitchell Before the United States Senate, Federal Monopoly Committee,” December 14, 1939.

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105. “one of the greatest steps”: “Testimony of Charles E. Mitchell Before the United States Senate, Federal Monopoly Committee.”

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106. how responsible were Sunshine Charlie: Huertas and Silverman, “Charles E. Mitchell.”

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107. “a big fish”: “Mitchell Is Painted Up as ‘Big Fish,’ ” Associated Press, May 17, 1933.

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108. Senator Carter Glass was still raging: “Carter Glass Launches Sharp Fight on Title,” United Press International, July 25, 1935.

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109. wrote to Federal Reserve governor: Charles S. Hamlin, letter to Governor Eccles, box 16, folder 6, item 22, Marriner S. Eccles Papers, University of Utah, https://fraser.stlouisfed.org/archival/1343/item/465929.

GO TO NOTE REFERENCE IN TEXT

110. citing a report he had written: Charles S. Hamlin, Review of C. E. Mitchell, April 27, 1931.

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111. “Frightened traders all over the country”: Charles S. Hamlin, Review of C. E. Mitchell.

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112. “that money could not be had”: Charles S. Hamlin, Review of C. E. Mitchell.

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113. “The final crash of October, 1929”: Charles S. Hamlin, Review of C. E. Mitchell.

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114. “Attention should be called”: Charles S. Hamlin, Review of C. E. Mitchell.

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115. “it would be better”: Charles S. Hamlin, Review of C. E. Mitchell.

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116. “I do not presume”: Baldwin and Stone, eds., We Saw It Happen.

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117. “The Federal Reserve board remained silent”: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 38.

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118. the board refused to condemn Mitchell: Charles S. Hamlin, Review of C. E. Mitchell.

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119. As late as 1950: Huertas and Silverman, “Charles E. Mitchell.”

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120. “ill-founded rumors”: Huertas and Silverman, “Charles E. Mitchell.”

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121. “That’s truer than Gospel”: “Return of Mitchell,” Time.

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122. “I have never lost my nerve”: “Chas. E. Mitchell Returns to Work,” Associated Press, January 23, 1935.

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123. “Carter Glass has asserted”: Heywood Broun, “It Seems to Me,” Cleveland Press, June 5, 1933.

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124. “hanging my head in shame”: Ferdinand Pecora, “Reminiscences of Ferdinand Pecora, 1962,” interview by Donald F. Shaughnessy, 1962, Columbia Center for Oral History, Columbia University, 273.

GO TO NOTE REFERENCE IN TEXT

125. Pecora turned down the money: Pecora, “Reminiscences of Ferdinand Pecora, 1962.”

Pecora turned down the money because, he said, he worried it would let down all the people who had written him letters. “[S]ome were from presidents of universities, some from deans of law schools, some from heads of corporations, some from schoolteachers—in which they applauded me, in their own way, for having undertaken this way for a compensation of $250 a month…I feel that a lot of those persons who honored me with their letters of commendation might feel that I had let them down.”

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126. Some Virginia voters: “Senator Carter Glass’ Seat,” Richmond Times-Dispatch, October 14, 1945.

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127. Glass returned from Virginia: “Hotel’s New Deal in Waiters Upset by Senator Glass,” Buffalo News, July 12, 1933.

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128. “but, by gosh”: “Gets His ‘Boy’ Back,” Kansas City Star, July 18, 1933.

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AFTERWORD

1. actually declined slightly that fall: John Kenneth Galbraith, The Great Crash 1929 (Houghton Mifflin Company, 1955), 133.

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2. Some authors and academics have argued: Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960 (Princeton University Press, 1963); Lester V. Chandler, Benjamin Strong, Central Banker (Brookings Institution, 1958).

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3. had he not died of tuberculosis: “Benjamin Strong, Banker, Succumbs,” Associated Press, October 17, 1928.

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4. rallying the leading economists to declare: David M. Kennedy, Freedom from Fear: The American People in Depression and War, 1929–1945 (Oxford University Press), 48.

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5. “In a society of temperate”: “National Affairs: The Beaver-Man,” Time, March 26, 1928.

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6. was “ludicrously superficial”: John Brooks, Once in Golconda: A True Drama of Wall Street 1920–1938 (Harper & Row, 1969), 179.

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7. “Overriding everything else”: Walter Lord, A Night to Remember (Henry Holt and Company, 1955), 114.

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IMAGE CREDITS

1: Library of Congress, Prints & Photographs Division, [LC-DIG-ggbain-33225]

2: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-36723]

3: Library of Congress, Prints & Photographs Division, [LC-DIG-ggbain-28170]

4: Library of Congress, Prints & Photographs Division, [LC-DIG-ggbain-25568]

5: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-22143]

6: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-02309]

7: Bettmann Archive / Getty Images

8: Edward Steichen / Condé Nast Collection / Getty Images

9: Library of Congress, Prints & Photographs Division, [LC-DIG-ggbain-21075]

10: Everett Collection Historical / Alamy Stock Photo

11: Bettmann Archive / Getty Images

12: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-46900]

13: Library of Congress, Prints & Photographs Division, [LC-USZ62-111367 ]

14: New York Daily News Archive / Getty Images

15: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-21551]

16: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-18956]

17: Library of Congress, Prints & Photographs Division, Arnold Genthe Collection, [LC-DIG-agc-7a13248]

18: Library of Congress, Prints & Photographs Division, [LC-DIG-ggbain-26278]

19: Library of Congress, Prints & Photographs Division, [LC-USZ62-101515]

20: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-35556]

21: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-35633]

22: Library of Congress, Prints & Photographs Division, [LC-USZ62-99049]

23: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-22010]

24: Irving Underhill, [X2010.29.216], Museum of the City of New York

25: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-35421]

26: Source: The New York Times

27: Source: The New York Times

28: Chronicle / Alamy Stock Photo

29: Bettmann Archive / Getty Images

30: Library of Congress, Prints & Photographs Division, [LC-USZ62-123429]

31: The New York Times Archive

32: The New York Times Archive

33: The New York Times Archive

34: Library of Congress, Prints & Photographs Division, photograph by Harris & Ewing, [LC-DIG-hec-35593]

35: Library of Congress Prints and Photographs Division, [LC-DIG-ppmsca-50131]

36: Bettmann Archive / Getty Images

37: Bettmann Archive / Getty Images

38: Bettmann Archive / Getty Images

39: Bettmann Archive / Getty Images

40: Bettmann Archive / Getty Images

41: Source: The New York Times

INDEX

The page numbers in this index refer to the printed version of the book. Each link will take you to the beginning of the corresponding print page. You may need to scroll forward from that location to find the corresponding reference on your e-reader.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

- Adams, Charles, 34

- Adams, Evangeline, 148–49, 163, 217–18

- Adventure in Constructive Finance, An (Glass), 108

- Aldrich, Nelson, 360

- Aldrich, Winthrop, 359–62, 383–84, 389, 436

- Glass and, 383–84, 386, 388, 399

- Alleghany Corporation, 33–35, 169, 194, 401, 402

- Allen, Robert, 314

- American Bankers Association, 384

- American in Paris, An (Gershwin), 53

- American Sugar Refining, 84

- Anaconda Copper Company, 90, 150, 206, 226, 276–77, 316, 348, 368, 374

- Anderson, Arthur, 402

- antitrust laws, 36, 97, 173, 434

- Aquitania, 19–22, 24, 32, 35–47, 95, 145, 169, 401

- Archipenko, Alexander, 259

- Associated Press, 90

- Astaire, Fred, 187

- Astor, Nancy, 419

- Astrology: Your Place in the Sun (Adams), 149

- AT&T (American Telephone & Telegraph Company), 43, 89, 223, 397

- Austria, 300

- automobile industry, 60, 61, 179, 192, 250, 332

B

- Babson, Roger, 163–67, 193, 200

- Babson Break, 165, 174

- Baker, George F., Jr., 208

- Baker, George F., Sr., 228

- Baker, Hugh, 2–7, 223, 225, 226, 229, 346–47

- Baltimore Sun, 294, 401

- Bank Depositors’ League, 422–23

- Bankers Trust, 24–25, 27, 140

- Bank of England, 45, 175–76, 300

- Bank of Pittsburgh, 303

- Bank of United States, 289–91, 300

- banks

- emergency loans for, 304, 321

- failures of, 269–70, 290–92, 294, 303, 308

- Glass–Steagall Act and separation of commercial and investment

- banking, 311–12, 331, 359–66, 370, 383–90, 399, 405–7, 421, 431, 435, 436, 441

- government guarantees on deposits in, 312–13, 387–89, 407, 435, 436

- holidays, 332, 353–55, 357, 358, 366

- national, branches of, 365, 371

- national system of, 440

- regional, creation of, 415

- runs on, 5–6, 243, 248, 270, 290–92, 294, 312, 320, 333–34, 350, 352–53, 355, 357

- small, 269–70, 365

- trust in, 268, 312, 366

- Barrett, Edward F., 257, 375–76

- Barron, Clarence, 69

- Bartow, Frank, 214, 417

- Baruch, Bernard, 7, 34, 52, 84–85, 169, 185–87, 226–28, 313, 317, 330

- Churchill and, 181–83, 186–88, 305–7

- Churchill dinner party thrown by, 188, 226–27

- Durant and, 253

- Livermore and, 84, 85

- market stabilization plan and, 209

- Mitchell and, 161–62, 227

- Raskob and, 125

- Wilson and, 84, 182

- Bayonne Times, 154, 155

- Behn, Sosthenes, 172–73

- Bell, Elliott V., 91–92, 433–34

- Benedere, Edward C., 45

- Bennett, John J., Jr., 348

- Berengaria, 216

- Bethlehem Steel, 216

- Big Six bankers, 213–15, 220, 223–24, 233

- Black Monday (October 28), 1–8, 222–28

- Black Thursday (October 24), 202–21, 263, 413–14

- Black Tuesday (October 29), 10, 228–36, 249, 260

- Blyth & Co., 431, 434

- Boca Raton, FL, 155

- Bologna, Pat, 203–5

- bonds, 33, 34, 43, 49, 53, 134, 191, 200, 219, 416

- Boris, Kosta, 70

- Boston Globe, 91

- Bow, Clara, 11

- Bragg, Tom, 99, 100

- Branch, C. R., 315

- Brazil, 53

- Bridgeman, Oliver, 206, 213

- Brookhart, Smith W., 341–42, 346

- Brooks, John, 392, 443

- Broun, Heywood, 399, 435–36

- bucket shops, 81

- Buffalo News, 361

- Buick, 60

- Byrd, Richard, 262

C

- call money, 43, 64, 92, 105, 167, 254, 295, 365, 432

- Canada, 176, 184

- Capone, Al, 309, 324, 343

- Carbonite Company of America, 154

- Cary, Robert, 351

- Catchings, Waddill, 165

- Caterpillar Tractor Company, 206

- CBS, 126, 147

- Celanese, 397

- Chaplin, Charlie, 11, 149, 185, 186

- Chase & Sanborn Coffee, 169

- Chase National Bank, 35, 146, 156–57, 172, 207, 291, 294, 324–25, 360, 388, 436

- Chevrolet, Louis-Joseph, 61

- Chicago, IL, 178

- Chicago Board of Trade, 112

- Chicago Tribune, 368

- Christmas, 259, 260, 280

- Chrysler, Walter, 60, 99, 114, 179, 197, 421, 428

- Chrysler Building, 179, 259, 421

- Chrysler Corporation, 179

- Churchill, Clementine, 183–86, 307

- Churchill, Jack, 183, 184

- Churchill, Randolph, 183, 184

- Churchill, Winston, 8, 136, 181–88, 236–37, 305–7, 420

- Baruch and, 181–83, 186–88, 305–7

- Baruch’s dinner party for, 188, 226–27

- Conservative Party and, 182, 305, 307

- death of, 420

- finances of, 236, 305, 307, 420

- Hoover and, 183, 188

- at New York Stock Exchange, 204, 227

- struck by car, 306–7, 420

- war service of, 183

- Citigroup, 5

- Civilian Conservation Corps, 358

- Civil War, 106

- Cockburn, Claud, 207, 210–12

- Collier’s, 69

- Columbian Carbon, 223

- Colville, John “Jock,” 182–83

- Congress, U.S., 302, 304

- 1930 midterm elections and, 282, 285, 287, 288

- see also House of Representatives, U.S.; Senate, U.S.

- Congressional Record, 252

- Consolidated Gas, 223, 250

- consumer economy, 10, 111

- Coolidge, Calvin, 12, 34, 59, 66, 68, 69, 72–73, 140, 168–70, 196, 317, 355

- Hoover and, 66, 68, 70–74

- Mellon and, 59, 67, 69

- Coolidge, Grace, 70–74

- Corn Exchange Bank, 3, 157, 171–73, 223, 238–40, 294

- Cortelyou, George B., 250

- cotton, 79, 80, 86, 128

- County Trust Company, 124, 150, 241–44

- Couzens, James, 129, 383, 340, 398, 402–3

- Coxe, Alfred C., 367

- Crawford, William, 156, 227

- on Black Thursday (October 24), 204, 206, 209, 213

- credit, 10–11, 22, 43, 47, 295, 432, 439

- decreased availability of, 264, 268, 295, 440

- GM and, 61

- gold and, 270

- Morgan on, 31

- stock buying on, 11, 42–44, 47–48, 55–56, 89, 127–28, 167, 196, 200, 242, 440

- Crowther, Samuel, 151

- Cuba, 136

- Cummings, Homer, 411

- curb market, 54, 430

- Curtis, Charles, 71

- Cutten, Arthur, 177, 197

D

- Dache, Harry Edgar, 77–78

- Daily Press, 132

- Davies, Marion, 185–86

- Davis, John, 393, 395, 417

- Davison, Henry, 24, 26, 27, 32

- Dawes, Charles, 310

- debt, 14, 164, 268

- Raskob on, 133, 134

- see also credit

- Democratic National Committee (DNC), 121–23, 125, 131–32, 137, 283, 315, 401, 421

- Riordan’s loan to, 241, 244

- Democratic Party, 40, 103, 108, 120, 121, 123–25, 131, 193, 252, 279, 280, 282, 313, 314, 317, 319–22, 329–31, 333, 363

- Raskob’s dinner party for elite of, 116–17, 124, 131

- Roosevelt and, 287, 288, 317, 363

- Depression, Great, see Great Depression

- District of Columbia Bankers Association, 200–201

- Douglas, William O., 415, 419

- Dow Jones Industrial Average, 23, 43, 58, 66, 80, 85, 89, 104, 132, 148, 154, 155, 159, 161, 163–65, 171, 177, 196, 199, 200, 225, 233, 246, 263–64, 284, 285, 298, 303, 320

- on Black Thursday (October 24), 215

- DuPont, 118, 120, 397

- du Pont, Pierre S., 118, 120, 122, 131, 150, 155, 421

- du Pont, T. Coleman, 428

- Durant, Catherine, 62, 110, 129, 219, 422, 424

- Durant, Clifford, 425

- Durant, Margery, 423–25

- Durant, William, 57–64, 69, 101, 110, 126–30, 177, 218–19, 253–54, 422–25

- as Bank Depositors’ League head, 422–23

- Baruch and, 253

- death of, 420, 424

- Federal Reserve and, 58, 126–29, 147, 149–50, 422

- financial losses of, 422–24

- General Motors and, 61, 134

- Glass and, 111, 129–30, 152–53

- Hoover and, 64, 126–27, 129, 422

- Hoover’s meeting with, 110–11, 114–15, 253, 254, 479n

- Livermore and, 84

- Mitchell and, 57–60, 64, 111, 128, 147–50, 152–53

- Raymere estate of, 61–62, 424

- RCA and, 99, 100

- stock manipulation by, 62–63, 423

- stock pools and, 63–64, 150

- Durant-Dort Carriage Company, 60

- Durant Hotel, 57

E

- Eastern Telegraph Company, 98

- Eastman Kodak, 223

- Eccles, Marriner S., 432

- E. F. Hutton and Co., 81, 148, 185, 186

- Egan, Martin, 195, 262–63, 273

- elections

- 1928 presidential, 65, 66, 69, 71–72, 183, 193, 318

- 1930 midterm, 282, 285, 287, 288, 298

- 1932 presidential, 288, 301, 310, 317, 318–21

- Empire State Building, 159–61, 178–80, 259, 315, 420–22

- Empress of Australia, 183

- England, 20, 32, 40, 140, 176, 183, 184, 188, 302, 303

- English, William H., 244

- Equitable Trust, 360

- Equities Security Company, 132–35, 151–52

- Europe, 176, 184, 187, 300, 320, 321, 323–24, 332

- Extraordinary Popular Delusions and the Madness of Crowds (Mackay), 227

F

- factories, 13, 284

- Fairbanks, Douglas, 11

- farmers and agriculture, 10, 12, 75, 128, 269, 289, 365, 386, 387, 424

- Federal Deposit Insurance Corporation, 388–89, 435, 436

- Federal Emergency Relief Administration, 358

- Federal Reserve, 39, 58, 64, 85, 90–94, 101, 104, 105, 111–13, 129, 148, 164, 219, 247, 254, 305, 325, 330, 332, 353, 354, 432–34, 440

- Black Thursday (October 24) and, 214, 215, 217

- County Trust and, 244

- creation of, 39, 107–8, 113, 360, 364, 405, 439

- Durant and, 58, 126–29, 147, 149–50, 422

- Glass and, 107–9, 293–97, 360, 364, 405

- Glass’s banking bill and, 312, 363–65

- Index of Industrial Production, 165

- interest rates and, 40, 44–46, 58, 88–89, 101, 104, 199, 214, 251, 252, 295

- National City Bank and, 41–43, 46, 90–93, 433

- speculators and, 42–46, 55–56, 85, 88, 111, 113, 115, 127–30, 157, 158, 167, 252, 331, 350, 432, 433

- Federal Reserve Bank of New York, x, 2, 38–40, 44, 127, 189, 434, 440

- Bank of United States and, 291

- Mitchell at, 39–41, 89–94, 105, 199, 224, 325, 432

- First National Bank, 208, 228

- Fischer, Carl, 426–27

- Fisher, Irving, 166, 191–93, 198, 200–201

- Fisher brothers, 62

- Fleischmann’s Yeast, 169

- Fletcher, Duncan, 113, 356, 396, 401

- Floyd, William, 273

- Forbes, 12, 49

- Forbes, Bertie Charles, 49, 67, 297–98

- Forbes, Harry, 256–57, 379

- Ford, Henry, 119, 129, 338

- Hoover and, 250

- Ford Motor Company, 129

- Fox, William, 88

- Fox Film Corporation, 88

- France, 20, 40, 140, 272, 286, 302

- Freeman, R. Austin, 101

- Frew, Walter E., 171–72, 238–39

G

- Galbraith, John Kenneth, 10, 112, 434, 438

- garment industry, 290

- Garner, John Nance, 313, 321, 389

- Garrett, Paul Willard, 22

- General Electric (GE), 36, 40, 69, 90, 97, 176, 189, 200, 223, 226, 274, 284, 397

- General Foods, 146

- General Mills, 397

- General Motors (GM), 11, 12, 43, 62, 131, 167, 206, 402, 424

- Assistance Corporation, 61

- creation of, 61

- Durant and, 61, 134

- Managers Securities Company, 151

- Raskob and, 61, 118–22, 134, 151, 152, 179, 315, 402

- Germany, 286, 320

- debt default threat of, 300–302

- dirigibles in, 172

- Nazi movement in, 142, 143

- in World War I, 188

- World War I reparations negotiations with, 19–20, 24, 32, 37, 97, 101, 107, 138–46, 182, 230, 300, 401

- Gershwin, George, 52–53

- Gilbert, Parker, 194, 371

- Glass, Carter, 8–9, 56, 94, 101, 103–9, 112, 129–30, 152–53, 157–58, 316, 330, 354, 358, 359–66, 383–90, 435–37

- Aldrich and, 383–84, 386, 388, 399

- bank branches idea of, 365, 371

- banking bill of, 311–12, 359–66, 383–90, 399, 405–7, 421, 431, 435, 436, 441

- on Black Thursday (October 24), 217

- Carter Glass Day and, 407

- death of, 420

- Durant and, 111, 129–30, 152–53

- early life of, 106

- federal deposit insurance and, 312, 387–89, 407, 435, 436

- Federal Reserve and, 107–9, 293–97, 360, 364, 405

- Hoover and, 311, 313, 329

- Lamont and, 107, 478n

- Leffingwell and, 361–62, 383–84, 407

- Long and, 363–66

- memoir of, 108

- Mitchell and, 8–9, 104–5, 109, 111–13, 128, 130, 152–53, 157, 158, 217, 251–53, 293–97, 324, 349–50, 431–32

- Pecora hearings and, 349, 398–400, 435–36

- poor health of, 103–5, 329, 332, 407, 436, 478n

- racial prejudice of, 103–4, 437

- on Raskob, 121

- retirement eschewed by, 420, 436

- Roosevelt and, 354–55, 362–63, 383–86, 389, 405–7

- as Roosevelt’s choice for treasury secretary, 329–33, 385

- Senate subcommittee of, 293–97

- Smoot–Hawley bill and, 269

- speculators and, 56, 217

- Steagall and, 387–89

- Wilson and, 108, 109

- Glass, Robert H., 106

- Glass–Steagall Act, 311–12, 359–66, 383–90, 399, 405–7, 421, 431, 435, 436, 441

- Goddard, Henry W., 373, 377, 409, 410

- gold, gold standard, 270, 303, 305, 311, 320, 321, 330, 332, 354, 357, 386, 442–43

- Goldman Sachs, 16, 89–90, 165, 234

- Investment Trust, 165

- Gordon, Max, 15

- Gorman, Frank, 245

- Graf, Lya, 400–401

- Great Crash 1929, The (Galbraith), 438

- Great Depression, 268, 270, 279, 284, 303, 319, 322, 442

- Greenbaum, E. S., 430

- gutter markets, 232

H

- Hamilton, Alexander, 69

- Hamlin, Charles Sumner, 432–33, 478n

- Hand, Frances, 23

- Hand, Learned, 23, 189

- Harding, Warren G., 59, 65, 66, 68, 286, 442

- Harkness, Lamon V., 51

- Harrison, George L., 44, 90–91, 127, 189, 230, 434

- Young and, 46

- Harrison, Pat, 243

- Harvard Crimson, 24

- Hatry, Clarence, 175–76

- Hearst, Millicent, 184, 186

- Hearst, William Randolph, 136–37, 184–86

- Hoover and, 249

- Hitler, Adolf, 418

- Hoover, Herbert, 59–60, 64, 66–68, 120, 122, 140, 157, 167–70, 179, 193–96, 219, 220, 267–70, 280, 282–87, 298–99, 303, 308–14, 316, 321, 322, 352, 420, 441–42

- banking holiday and, 353–55, 357

- on capitalism, 285, 507n

- Churchill and, 183, 188

- Coolidge and, 66, 68, 70–74

- death of, 420

- Durant and, 64, 126–27, 129, 422

- Durant’s meeting with, 110–11, 114–15, 253, 254, 479n

- federal budget and, 287

- Ford and, 250

- German debt default and, 300–301

- Glass and, 311, 313, 329

- Glass–Steagall Act and, 311–12

- Hearst and, 249

- inauguration of, 59, 64, 65–67, 70, 72–75, 76, 89, 355

- Josephson on, 275

- Joslin and, 352–53

- Lamont and, 169–70, 191–96, 199, 219, 248, 269, 300–301

- Leffingwell and, 191, 193–94

- MacLafferty and, 282–83

- meeting of bankers and insurance executives called by, 303–4

- Mellon and, 67, 69–70, 168–69, 247, 248, 250–51, 302–4, 308–11

- Michelson and, 283

- Mitchell and, 59, 64, 351

- in presidential election of 1928, 65, 66, 69, 183, 193, 318

- in presidential election of 1932, 301, 310, 317, 318–21

- press and, 283, 285, 287, 302, 442

- press conferences of, 299

- Raskob and, 116, 117, 124, 131, 135–37, 278–81, 313

- Reconstruction Finance Corporation created by, 310, 313, 321

- Reed and, 334

- Roosevelt and, 287–89, 317, 319–20, 332–34, 352–55

- Roosevelt’s letter from, 327–29, 331, 333

- short sellers as viewed by, 313–14

- Smoot and, 130

- Smoot–Hawley bill and, 269

- speculators and, 167, 168, 313

- stock market crash and, 247–51, 253

- stock speculation and, 167, 168, 313, 489n

- on unemployment, 299

- Walcott and, 314

- war relief efforts of, 188, 420, 441

- White on, 251

- Whitney and, 313–14

- Hoover, Lou, 65, 70, 71, 73, 74

- Hoovervilles, 283, 297, 425

- House of Representatives, U.S., 279, 282, 319, 387–88

- Pujo Committee, 29–31, 107, 322, 393, 404

- Houser Associates, 318

- Howe, Louis, 288

- Huddleston, Sisley, 140

- Hull, Cordell, 354

- Humble Oil, 146

- Hutton, E. F., 70

- E. F. Hutton and Co., 81, 148, 185, 186

I

- immigrants, 13, 290, 298

- National Origins Act and, 323–24

- Index of Industrial Production, 165

- industrialization, 13

- Industrial Rayon Corporation, 111

- inflation, 330, 331, 333

- interest rates, 40, 44–46, 58, 88–89, 101, 104, 199, 214, 251, 252, 295, 422, 440

- International Acceptance Bank, 113

- International Chamber of Commerce, 54

- In the Nation’s Capital, 278–80

- Irving Trust, 216

- ITT (International Telephone and Telegraph), 172, 397

- in merger with RCA and Western Union, 36–37, 95–98, 100–101, 173

J

- Jackson, Stonewall, 106

- James, George R., 93

- J. A. Sisto & Co., 273

- Jekyll Island, 107

- Johnson, Hiram, 73

- Jones, Jesse, 354

- Josephson, Matthew, 273–75

- Joslin, Theodore, 309, 352–53

- J.P. Morgan & Co. (House of Morgan), 19–25, 28, 35, 53, 54, 80, 101, 105, 107, 141, 146, 159, 169, 193–95, 224, 233, 271, 272, 321, 331, 354, 371, 415, 416, 419, 435

- Alleghany Corporation and, 33–35, 169, 194, 401, 402

- Black Thursday (October 24) and, 208, 209, 213–14

- client selection at, 396–97

- cutbacks at, 394

- deposit accounts and net worth of, 397

- discounted stock offered by, 401–2

- Douglas on, 415

- ethos of, 23–24, 28, 394

- Glass’s banking bill and, 359–63, 383, 399, 407

- insider loans from, 395

- investment pools and, 63

- Jack Morgan’s powers at, 395

- Lamont’s joining of, 27–28

- Mitchell’s loan from, 372, 375, 379–80, 395, 431

- and Mitchell’s purchase of National City shares, 229, 230

- and Mitchell’s sale of National City shares to his wife, 256–58

- Pecora hearings and, 391–404

- press and, 28–30

- public interactions of, 395–96

- shares sold during the panic by, 271–72

- Standard Brands and, 169, 401

- taxes evaded by partners at, 397–98, 400

- United Corporation and, 169, 194

- Justice Department, U.S., 315, 369, 419, 430

K

- Keene, James R., 227

- Kelley, Ed, 428

- Kellogg–Briand Pact, 190, 286

- Kennedy, Joseph, 267, 414, 415

- Kenny, Bill, 242

- Keynes, John Maynard, 63, 268

L

- Ladies’ Home Journal, 151

- La Guardia, Fiorello, 260

- laissez-faire approach, 12, 168, 299

- Lamb, William, 177, 178

- Lamont, Austin, 23, 28, 141

- Lamont, Corliss, 28, 463n

- Lamont, Eleanor, 28, 221, 463n

- Lamont, Florence, 19, 23, 24, 28, 139, 141, 190, 271, 394, 416–17

- letter to Thomas from, 462n

- Lamont, Thomas Stilwell (Tom), 22, 23, 28, 146, 169, 417

- Pecora hearings and, 393, 398

- Lamont, Thomas W., 19–37, 40, 54, 95–102, 105, 169, 220, 221, 226, 262, 271–73, 331, 369–72, 394, 416–17

- Anderson’s memo from, 402

- on Aquitania, 19–22, 24, 32, 35–47, 95, 145, 169, 401

- Bank of United States and, 291

- becomes J.P. Morgan partner, 27–28

- in Big Six, 213–15, 220, 233

- on Black Thursday (October 24), 202–3, 206–10, 213–15

- death of, 420

- dinner hosted by, 189–90

- early life of, 24

- Florence’s letter to, 462n

- German debt default and, 300–301

- in German reparations negotiations, 19–20, 24, 32, 37, 97, 107, 138–46, 182, 230, 300, 401

- Glass and, 107, 478n

- Hoover and, 169–70, 191–96, 199, 219, 248, 269, 300–301

- Jack Morgan and, 20–23, 196, 238–40

- J. Pierpont Morgan and, 26–30, 392

- Leffingwell and, 101–2, 189–91, 194, 272

- in market stabilization plan, 208–9

- Mitchell and, 229–30, 257, 372

- Mussolini and, 21, 272, 418

- in New York Stock Exchange secret meeting, 230–31, 233

- Ochs and, 403

- Panic of 1907 and, 26–27

- Pearson on, 392

- Pecora hearings and, 391–94, 401, 403–4

- press and, 28–30

- RCA/Western Union/ITT merger of, 36–37, 95–98, 100–101, 173

- Roosevelt and, 353–55, 369–71, 415

- sixtieth birthday of, 271, 273

- Smoot–Hawley bill and, 269

- speculation and, 194–95, 199

- Torrey Cliff estate of, 271, 505n

- Whitney brothers and, 413–19

- Wilson and, 107

- Woodin and, 369

- yacht of, 271

- Lawrence, Joseph Stagg, 112

- Leef, Charles, 400

- Lefèvre, Edwin, 173, 209

- Reminiscences of a Stock Operator, 77, 173, 209

- Leffingwell, Russell Cornell, 104, 105, 195–96, 331, 371

- Glass and, 361–62, 383–84, 407

- Hoover and, 191, 193–94

- Lamont and, 101–2, 189–91, 194, 272

- Lehman, Herbert H., 124, 355

- Lehman Brothers, 124

- Leviathan, 159

- Levine, Michael, 203

- Levinson, Salmon, 285–86

- Lindbergh, Charles, 11, 21, 34

- Lippmann, Faye, 23, 394

- Lippmann, Walter, 23, 145, 349, 394, 403

- Literary Digest, 151

- Livermore, Dorothy “Mousie,” 174–76, 235–36, 245, 426

- Livermore, Harriet, 425–29

- Livermore, Jesse, 76–87, 153–55, 162, 173–76, 185, 197–98, 218–19, 235–36, 245–46, 425–29

- Baruch and, 84, 85

- on Black Thursday (October 24), 219

- book written by, 173–74, 176

- cotton market and, 79, 80, 86

- Dache and, 77–78

- Durant and, 84

- early life of, 80–81

- financial losses of, 425–26, 429

- lawsuits against, 154–55

- marriage of, 174–75

- New York Times and, 197–98

- press and, 76–80, 86, 245–46

- in Reminiscences of a Stock Operator, 77, 173

- Senate testimony of, 315

- short selling by, 82–83, 86, 87, 236, 245

- speculation and, 83, 84, 197

- stock tickers and, 78–79, 81

- suicide of, 427–29

- wheat trade of, 428–29

- Livermore, Paul, 428

- loans

- call, 43, 64, 92, 105, 167, 254, 295, 365, 432

- see also credit

- London Stock Exchange, 176

- Lonergan, Augustine, 364

- Long, Huey, 363–66

- Lord, Walter, 443

- Los Angeles Times, 166

- Louis XIV, 140

- Lynch, Eddie, 55

M

- MacDonald, Ramsay, 170, 182, 189, 190

- Mackay, Charles, 227

- MacLafferty, James, 282–83

- Mallon, Paul, 384

- Marconi, Guglielmo, 96

- Marconi Wireless Telegraph Company, 98

- Marion Leader-Tribune, 279

- Marx, Groucho, 14–16

- Mauretania, 141

- McKellar, Kenneth, 67

- Medalie, George Z., 368, 374–77, 381–82, 410, 411

- Medina, Harold R., 434

- Meehan, Elizabeth, 99, 100

- Meehan, Michael, 98–100, 119, 150, 158–59, 216, 263, 315, 316

- Meeker, Royal, 158

- Mellon, Andrew, 59, 67–69, 171, 215, 270, 275, 308–11, 357

- ambassadorship of, 310–11

- Bank of Pittsburgh and, 303

- Germany’s debt and, 302

- Hoover and, 67, 69–70, 168–69, 247, 248, 250–51, 302–4, 308–11

- in meeting of bankers and insurance executives, 303–4

- Patman and, 309–10

- Reconstruction Finance Corporation and, 310

- Mellon, Paul, 302, 303

- Mellon National Bank, 357

- Merrill, Charles, 55, 215–16

- Merrill Lynch, 55, 215–16

- Mexico, 272

- Meyer, Agnes, 385

- Meyer, Eugene, 226, 385

- Michelson, Charley, 135–37, 278–79

- DNC and, 137, 283

- Hoover and, 283

- midterm elections of 1930, 282, 285, 287, 288, 298

- Miller, Adolph C., 93

- Mills, Ogden L., 247, 248, 311, 333, 352

- Minas Gerais, 53

- Mitchell, Charles, 1–10, 25, 34, 38–56, 88–94, 101, 104, 147–50, 155–57, 193, 199, 222–26, 268, 297, 336, 355, 359, 370, 385, 429–35

- Anaconda Copper and, 150, 277, 316, 368, 374

- in antitrust lawsuit, 434

- Baker and, 2–7

- Bank of United States and, 291

- Baruch and, 161–62, 227

- Bell and, 91–92

- in Big Six, 213–15, 220, 223–24

- birthday celebration of, 172–73

- on Black Thursday (October 24), 207–10, 214

- at Blyth & Co., 430–31, 434

- Bologna and, 204

- in college, 48, 49

- consulting firm of, 430

- Corn Exchange Bank merger and, 3, 157, 171–73, 223, 238–40

- death of, 420

- debts of, 336, 350, 372, 375, 379–80, 429–30, 434

- Durant and, 57–60, 64, 111, 128, 147–50, 152–53

- European vacations of, 171–73, 192–93, 198–99

- Forbes and, 49, 297–98

- Germany and, 300

- Glass and, 8–9, 104–5, 109, 111–13, 128, 130, 152–53, 157, 158, 217, 251–53, 293–97, 324, 349–50, 431–32

- Hilldale estate of, 51–52

- Hoover and, 59, 64, 351

- J.P. Morgan loan to, 372, 375, 379–80, 395, 431

- Lamont and, 229–30, 257, 372

- marriage of, 48–49

- Mellon and, 59–60

- Mussolini and, 324

- National City Bank and, see National City Bank

- at New York Fed, 39–41, 89–94, 105, 199, 224, 325, 432

- Panic of 1907 and, 6, 25

- Raskob and, 152

- Rentschler and, 228–29

- Roosevelt and, 351, 368

- Senate testimonies of, 315–16, 431

- Senate testimony in Pecora hearings, 325, 335–43, 344–51, 367, 369

- Sherrod and, 276–77

- on speculators, 54, 93, 94, 126, 193

- stock market crash blamed on, 252–53, 374, 431

- stock market intervention of, 90–93, 104, 105, 128, 172

- Strong and, 40–41

- tax evasion arrest and indictment of, 341, 342, 367–69, 398

- tax evasion civil suit against, 430

- tax evasion criminal trial of, 369, 373–82, 407, 408–12, 430

- wealth of, 51, 255, 338, 339, 350

- Wiggin and, 156–57

- Mitchell, Craig, 9, 431

- Mitchell, Elizabeth, 9, 48–49, 51–53, 171, 336, 367, 430

- Charles’s tax evasion trial and, 377, 411

- National City shares and, 256–57, 342–43, 344, 368, 374, 376–81

- pool stock transactions of, 375

- Mitchell, Rita, 9, 336, 431

- Mizner, Addison and Wilson, 155

- M.J. Meehan & Company, 158–59

- Moley, Raymond, 327–29, 354

- Montgomery Ward, 205, 211, 397

- Mont Royal, 184

- Morgan, Henry, 22

- Morgan, J. P., Jr. (Jack), 20–21, 23, 31–32, 37, 101–2, 139, 144, 199, 371, 384

- Aldrich and, 383

- attempted kidnapping of, 32

- on Black Thursday (October 24), 206

- death of, 420

- Graf and, 400–401

- House of Morgan powers of, 395

- Lamont and, 20–23, 196, 238–40

- Pecora hearings and, 391, 393–98, 400, 402, 404

- Sarnoff and, 144

- tax evasion by, 397

- Whitney brothers and, 416, 417

- yacht of, 159, 394

- Morgan, J. P., Sr. (J. Pierpont), 20, 25–32, 83, 92, 149, 245, 391, 393, 404

- death of, 31

- journalists and, 274

- Lamont and, 26–30, 393

- Panic of 1907 and, 25–27, 49, 207, 233

- Pujo Committee testimony of, 29–31, 107, 322, 393

- yacht of, 159

- Morgan & Co., see J.P. Morgan & Co.

- Morgan, Grenfell & Co., 393

- Morrow, Dwight, 23

- Morrow, Elizabeth, 23

- Moses, George, 70–71

- Mount Rushmore, 314

- movie industry, 88

- Mulligan, Raymond J., 367

- Muskegon Chronicle, 411

- Mussolini, Benito, 21, 272, 274, 324, 418

N

- Napoleon, 140, 519n

- Nast, Condé, 52, 187

- Nast, Leslie, 187

- National Business Conference, 164

- National City Bank, 41–43, 46, 47, 49–51, 53, 55, 105, 128, 148, 156, 172, 173, 222, 336–37, 370, 371, 374, 431–33

- Anaconda Copper and, 150, 276–77, 316, 348

- on Black Monday (October 28), 1–8, 222–28

- Blyth and, 434

- bonds and, 53

- bonuses at, 348

- Corn Exchange Bank and, 3, 157, 171–73, 223, 238–40, 294

- delisted from New York Stock Exchange, 54

- deposits and branches of, 50, 172

- Elizabeth Mitchell and, 256–57, 342–43, 344, 368, 374, 376–81

- Federal Reserve and, 41–43, 46, 90–93, 433

- fund for executives at, 345–46

- Glass’s subcommittee and, 294

- investment pools and, 63

- Mitchell elected president of, 49

- Mitchell’s address to shareholders of, 294–95

- Mitchell’s March 1929 actions and, 91–92, 432–34

- Mitchell’s purchases and sales of shares of, 9–10, 229–30, 255–57, 340–43, 368, 374, 376–81

- Mitchell’s resignation from, 350–51

- Mitchell’s salary and bonuses from, 51, 255, 338, 339, 350

- Mitchell’s Senate testimonies on, 315–16, 335–43, 344–51

- Pecora and, 324–26

- salesmen’s salaries at, 337–38

- shares of, 3–4, 9–10, 54, 157, 203, 225–26, 228–30, 238, 239, 255–58

- Sherrod at, 276

- National City Company, 42–43, 49, 346

- breaks from National City Bank, 359–60

- National Origins Act, 323–24

- Nazi movement, 142, 143

- NBC, 278, 421

- New Jersey, 336

- Newman Brothers & Worms, 14

- New Republic, 273–74

- New York, NY, 12–13, 24, 25, 178–79, 189, 259–60, 287, 420

- Christmas in, 259, 260

- Chrysler Building in, 179, 259, 421

- Empire State Building in, 159–61, 178–80, 259, 315, 420–22

- Rockefeller Center in, 278, 421

- Tammany Hall in, 261, 289

- Walker as mayor of, 260–61

- New York Daily News, 8, 99

- New Yorker, 260, 275, 392

- New York Evening Post, 22, 132

- New York Evening World, 152

- New York Herald Tribune, 79–80, 91–92, 95, 97, 330

- New York Stock Exchange, 5, 13, 54, 55, 86, 89, 98, 100, 112, 167, 231–32, 417, 440

- on Black Thursday (October 24), 202–6, 213–15

- carvings on building of, 222

- Churchill at, 204, 227

- closing of, 353, 358

- end of trading in 1929, 263

- Gratuity Fund of, 416

- March 26 break at, 88–94, 432

- National City Bank delisted from, 54

- secret meeting at, 231–33

- special holidays at, 233

- speculation and, 313

- Whitney and, 413, 414, 417–18

- New York Sun, 229–30

- New York Times, 8, 56, 85, 95, 101, 114, 124, 138–39, 154, 164, 172, 200, 233, 261–62, 290, 292, 332, 359, 368, 401

- Black Thursday (October 24) and, 220–21, 263

- Durant’s speech in, 128–29

- Glass’s piece in, 158

- Hoover and, 302

- Lamont and, 272

- Livermore and, 197–98, 246

- Morgan appointments and, 22

- Pecora hearings and, 403

- Raskob and, 122–23

- Rogers letter in, 389–90

- New York Times Book Review, 149

- New-York Tribune, 24

- New York World, 23, 135–37, 226

- New York World-Telegram, 253–54

- New York Yacht Club, 417

- Night to Remember, A (Lord), 443

- Norbeck, Peter, 314, 316, 322–25, 345, 396

- Norman, Montagu, 176

- Norris, George, 113

- North American Review, 261

- Noyes, Alexander D., 114, 292

O

- O’Brien, Howard Vincent, 373

- Ochs, Adolph, 403

- Olmsted Brothers, 51

- Olympic, 171

- Otis Elevator Company, 223

- Owen, Robert L., 112

P

- Paine Webber, 80–81

- Paley, William S., 126

- panics and crashes, 264

- of 1873, 232

- of 1907, 6, 25–27, 29, 49, 83, 207, 210, 233, 387, 439

- of 1914, 232

- of 1920–1921, 40, 83, 249, 286, 387, 441–42

- of 1929, see Wall Street Crash of 1929

- of 1937, 414

- paradox of thrift, 268

- Paris Peace Conference, 20, 182

- Patman, Wright, 309–10

- Pearson, Drew, 314, 392

- Pecora, Ferdinand, 323, 420, 436

- Senate hearings of, 323–26, 335–43, 344–51, 367, 369, 371, 391–404, 414, 421, 431, 435–36, 441

- special allowance proposed for, 436, 538n

- People vs. Wall Street (Floyd), 273

- Perkins, Frances, 119

- Pershing, John J., 34

- Philadelphia Record, 349

- Pickford, Mary, 149

- Pierson, Lewis, 216–17

- Plaza Hotel, 147, 148, 152, 153, 160, 181, 236

- Potter, William C., 208

- presidential election of 1928, 65, 66, 69, 71–72, 183, 193, 318

- presidential election of 1932, 288, 301, 310, 317, 318–21

- President’s Conference on Unemployment, 286

- Prohibition, 75, 111, 120, 123, 148, 192, 317, 319, 426

- Prosser, Seward, 208

- Pujo, Arsène P., 29

- Pujo Committee, 29–31, 107, 322, 393, 404

- Purchasing Agents Association, 191–92

R

- radio, 96–97, 111, 442

- Raskob, John J., 34, 116–25, 131–37, 150, 151, 177–78, 317, 401

- Baruch and, 125

- Depression blamed on, 279

- as DNC chairman, 121–23, 125, 131–32, 315, 401, 421

- du Pont and, 118, 120, 122, 131, 421

- early life of, 118

- Empire State Building and, 161, 178–80, 259, 315, 420–22

- Equities Security Company of, 132–35, 151–52

- five-day workweek proposed by, 261, 280

- General Motors and, 61, 118–22, 134, 151, 152, 179, 315, 402

- Hoover and, 116, 117, 124, 131, 135–37, 278–81, 313

- lunches and dinners hosted by, 116–17, 124, 131, 177–78, 180

- Michelson and, 135–37, 278–79

- Mitchell and, 152

- press and, 280

- radio address of, 278–80

- Riordan and, 241–45

- Senate testimony of, 315

- Shouse and, 131, 135, 137

- Smith and, 116, 117, 119–23, 179, 241

- speculation and, 243, 279

- taxes of, 421–22

- Whitney and, 401–2

- Raskob, William, 121

- RCA (Radio Corporation of America), 15, 43, 96–100, 119, 121, 141, 150, 176, 196, 242, 316

- in merger with ITT and Western Union, 36–37, 95–98, 100–101, 173

- Reconstruction Finance Corporation, 310, 313, 321

- Reed, David A., 334

- regulation, 128, 129, 191, 219, 323, 326, 358, 361, 363–64, 444

- Reichsbank, 102

- Remington, Frederic, 136

- Reminiscences of a Stock Operator (Lefèvre), 77, 173, 209

- Rend, Joseph, 256, 381

- Rend, William P., 48

- Rentschler, George Adam, 431

- Rentschler, Gordon, 6–7, 9–10, 225, 226, 228–29, 431

- Senate testimony of, 345–46

- Rentschler, Rita Mitchell, 9, 336, 431

- Republican National Committee, 169, 318

- Republican National Convention, 317

- Republican Party, 72, 107, 120, 123, 252, 260, 282, 288, 289, 309, 312, 314–17, 320–22, 327, 334

- Richey, Lawrence, 110

- Riordan, James J., 124, 150, 241–45

- suicide of, 241–44, 501n

- Robertson, Arthur A., 234, 425–26

- Robinson, Arthur, 243, 279

- Robinson, Edward, 357

- Robinson, Henry M., 193, 194, 219–20

- Robinson, Joseph, 116

- Rockefeller, John D., Jr., 189, 190, 360

- Rockefeller, John D., Sr., 119, 216

- Rockefeller Center, 278, 421

- Rockefeller family, 274, 360–62, 399

- Rogers, Will, 88, 389–90

- Roosevelt, Franklin Delano, 119, 121, 123, 270, 314, 316, 321, 322, 330, 352–58, 415, 421, 442–43

- Aldrich and, 362, 383–84, 389, 436

- bank deposit guarantee and, 387

- bank holiday and, 354, 355, 357–58, 366

- Chicago speeches of, 288–89

- fireside chats of, 366

- at gala, 327–29

- Glass and, 354–55, 362–63, 383–86, 389, 405–7

- Glass pressured to accept treasury secretary post by, 329–33, 385

- Glass’s banking bill and, 383–84, 389, 436

- gold standard and, 357, 386, 442–43

- Hoover and, 287–89, 317, 319–20, 332–34, 352–55

- Hoover’s letter to, 327–29, 331, 333

- Howe and, 288

- inaugural speech of, 355–56

- inauguration of, 326, 348, 352, 355–56

- Lamont and, 353–55, 369–71, 415

- Mitchell and, 351, 368

- Moley and, 327

- New Deal of, 334, 415, 421

- polio of, 317

- in presidential election of 1932, 288, 317, 318–21

- reelection as governor, 287, 289

- Securities and Exchange Commission law signed by, 414

- Woodin named treasury secretary by, 332–33

- Root, Elihu, 189

- Royal Baking Powder, 169

- Ruth, Babe, 11

- Ryan, John D., 226

S

- Sachs, Walter, 165

- Saks Fifth Avenue, 259

- Salvation Army, 259

- San Francisco earthquake, 82–83

- San Francisco Examiner, 136–37

- Sarnoff, David, 36, 141–45

- Sarnoff, Lizette, 145

- Saturday Evening Post, 209

- Scapegoats (Sherrod), 276–77

- Schacht, Hjalmar, 102, 140–44

- Schwab, Charles M., 85, 184, 186, 188, 226

- Scribner’s Magazine, 137, 278–79

- Scrobogna, Aristo, 253

- Sears, Roebuck & Co., 11, 43

- Securities and Exchange Commission (SEC), 414, 415, 418, 419

- segregation, 103–4

- Senate, U.S., 243, 251, 252, 269, 279, 282, 309, 311, 314, 319, 322, 329, 338

- Finance Committee, 316

- Senate Banking and Currency Committee, 94, 113, 314–16, 322, 330, 356–57, 362

- Glass’s subcommittee of, 293–97

- Mitchell’s testimonies before, 315–16, 325, 335–43, 344–51, 367, 369

- Pecora hearings of, 323–26, 335–43, 344–51, 367, 369, 371, 391–404, 414, 421, 431, 435–36, 441

- Sherman Antitrust Act, 97

- Sherrod, Julian, 275–77

- Sherry-Netherland Hotel, 234, 426–27

- Shouse, Jouett, 131, 135, 137

- Simmons, E. H. H., 89, 208, 263

- Simmons, Furnifold M., 252

- Sisson, Francis, 385

- Sloan, Alfred, 122

- Smith, Al, 70, 132, 150, 241

- Empire State Building and, 159–61, 178, 179, 421

- in presidential election, 66, 69, 183

- Raskob and, 116, 117, 119–23, 179, 241

- Riordan and, 241, 242, 244

- Smith, Ben, 99, 100, 267–68, 275

- Smith, F. Marion, 411–12

- Smoot, Reed Owen, 69, 130

- Smoot–Hawley Tariff Act, 130, 153, 251, 269, 300

- Socialist Party, 260

- South Pole, 262

- Sparling, Earl, 253–54

- speculators, speculation, 42–46, 50, 62, 68, 75, 84, 105, 107, 109, 112, 113, 129–30, 152, 153, 155, 156, 158, 167, 191, 196, 228, 249, 252, 297, 347, 414, 433, 439

- capital gains taxes and, 280, 296

- Durant and, 57

- explosion in loans to, 167

- Federal Reserve and, 42–46, 55–56, 85, 88, 111, 113, 115, 127–30, 157, 158, 167, 252, 331, 350, 432, 433

- Glass and, 56, 217

- Hoover and, 167, 168, 313, 489n

- Lamont and, 194–95, 199

- Livermore and, 83, 84, 197

- Mellon on, 251

- Mitchell on, 54, 93, 94, 126, 193

- Raskob and, 243, 279

- Securities and Exchange Commission and, 414

- and separation of commercial and investment banking, 312

- tariff bill and, 130

- Whitney and, 212

- Spencer Churchill, John, 183

- Speyer, Edgar, 210–12

- Speyer & Co., 211

- Standard Brands, 169, 401

- Standard Oil, 43, 51, 274, 397

- Steagall, Henry B., 311–13, 386–89, 436

- Glass and, 387–89

- Glass–Steagall Act, 311–12, 359–66, 383–90, 399, 405–7, 421, 431, 435, 436, 441

- steel industry, 303

- see also U.S. Steel

- Steuer, Max D., 368–69, 373–77, 379–82, 408, 410–11

- stock markets, 13, 176

- stock tickers, 78–79, 81, 89, 232

- stock trading, 13, 444

- boom in, 127–28

- bucket shops and, 81

- buying on credit (margin trading), 11, 42–44, 47–48, 55–56, 89, 127–28, 167, 196, 200, 242, 440

- curb market and, 54, 430

- insider, 370

- in investor pools, 63–64, 84, 150, 196, 313, 316, 370, 375, 414, 423

- large transactions in, 167

- 1921 mini-crash and, 83

- off-exchange, 5

- short selling in, 82–83, 86, 87, 236, 245, 280–81, 285–86, 313–14, 444

- speculators in, see speculators, speculation

- women in, 45

- Stork Club, 425, 426

- Stotesbury, E. T., 190

- Strakosch, Henry, 420

- Strauss, Frederick, 402

- Strauss, Lewis, 318

- Strong, Benjamin, 40–41, 93, 440

- Sulzberger, Arthur H., 124

- Supreme Court, U.S., 112, 377, 422

- Survey of Current Business, 286

- Swaine, Robert T., 380

- Swanson, Gloria, 187

- Swope, Gerard, 226

- Swope, Herbert, 226, 228

T

- Taft, William Howard, 74

- Tammany Hall, 261, 289

- Tarbell, Ida, 274

- taxes, 286, 287, 298

- capital gains, 280, 296

- tax evasion, 343

- Jack Morgan and, 397

- Mitchell’s arrest and indictment for, 341, 342, 367–69, 398

- Mitchell’s trial for, 369, 373–82, 407, 408–12, 430

- Mitchell sued by Justice Department for, 430

- Morgan partners and, 397–98, 400

- Raskob and, 421–22

- Taylor, Myron C., 190

- Tennessee Valley Authority, 358

- Texas Gulf Sulphur, 397

- Thompson, Samuel Huston, 362

- thrift, paradox of, 268

- Tilson, John Q., 279

- Time, 12, 21, 123, 274, 351, 366, 414, 442

- Times (London), 66, 207

- Titanic, 443

- Trading with the Enemy Act, 354

- Treasury Department, U.S., 68–69, 130, 193, 275, 309, 332, 353, 361, 363, 426

- Glass as Roosevelt’s choice for secretary of, 329–33, 385

- Woodin named secretary of, 332–33

- Treatise on Money, A (Keynes), 268

- Trust Company of America, 6, 49

- Tucker, Ray, 400

- Tuttle, Charles, 289

U

- unemployment, 40, 262, 268, 275, 284, 286, 299, 309

- Union Carbide, 16

- Union Pacific Railroad, 82

- United Corporation, 169, 194

- United Fruit, 428

- Untermyer, Samuel, 29–31, 322–23, 404

- U.S. Steel, 12, 43, 176, 189, 223, 397

- Black Thursday (October 24) and, 206, 213, 413–14

V

- Van Antwerp, William, 185

- Vandenberg, Arthur, 389

- Van Sweringen, Oris and Mantis, 33, 35, 177, 321

- Victor Talking Machine Company, 141

- Voit, Eugene, 426, 427

W

- WABC, 126

- Walcott, Frederic, 314

- Waldorf Astoria, 160, 305

- Walker, Jimmy, 145–46, 260–61

- Walker & Gillette, 52

- Wall Street Crash of 1929

- avoidability of, 439–40

- Big Six bankers and, 213–15, 220, 223–24, 233

- effects of, 242, 268, 284, 438–39, 443–44

- Great Depression following, 268, 270, 279, 284, 303, 319, 322, 442

- October 24 (Black Thursday), 202–21, 263, 413–14

- October 28 (Black Monday), 1–8, 222–28

- October 29 (Black Tuesday), 10, 228–36, 249, 260

- suicides and, 234, 236, 241–44, 438

- Wall Street Journal, 99, 100, 208

- Warburg, Paul M., 113–14

- War Industries Board, 84

- Warner Bros. Pictures, 152

- Washington, George, 202

- Washington Post, 252

- wash sales, 398, 411, 421–22

- WEAF, 278

- wealth, 11–12, 25, 179

- Weinberg, Sidney J., 234

- Wells, H. G., xi

- Western Union, 228

- in merger with RCA and ITT, 36–37, 95–98, 100–101, 173

- Westinghouse, 199–200

- Wheeler, Burton K., 348

- White, E. B., 260

- White, William Allen, 251

- White Act, 97, 98

- Whitney, George, 208, 212, 214, 229–31, 233, 257, 371, 401–3, 419

- Lamont and, 314–19

- Raskob and, 401–2

- Richard’s troubles and, 413–19

- Whitney, Richard, 115, 223, 232, 268, 269, 315, 401, 413–19, 423, 441

- on Black Thursday (October 24), 204, 208, 209, 212–13, 219, 220, 413–14

- bond trading firm of, 414–15

- death of, 419

- George and, 413–19

- Hoover and, 313–14

- indictment and imprisonment of, 418, 419

- Lamont and, 314–19

- New York Stock Exchange and, 413, 414, 417–18

- theft by, 414–19

- U.S. Steel bid of, 206, 213, 413–14

- Wiggin, Albert H., 35, 156–57, 207–8, 226, 294, 360, 436, 441

- Bank of United States and, 291

- Willebrandt, Mabel Walker, 110–11

- Williams, L. M., 112

- Wilson, Woodrow, 29, 137, 329, 361

- Baruch and, 84, 182

- Glass and, 108, 109

- Lamont and, 107

- Wiregrass Farmer, 388

- Woodin, William, 34–35, 332–33, 354, 357, 369

- Woolworth Building, 179

- work

- five-day workweek, 261, 280

- unemployment, 40, 262, 268, 275, 284, 286, 299, 309

- wages, 286

- World’s Work, 118

- World War I, 19–20, 32, 40, 72, 84, 188, 301, 321

- Churchill in, 183

- German debt default threat following, 300–302

- German reparations negotiations following, 19–20, 24, 32, 37, 97, 102, 107, 138–46, 182, 230, 300, 401

- Hoover’s relief efforts in, 188, 420, 441

- veterans of, 406

- World War II, 420

Y

- Young, Owen D., 36, 40, 69, 94, 97, 98, 101, 102, 127, 189, 223–24, 274, 317

- Bank of United States and, 291

- in German reparations negotiations, 37, 138–39, 141–42, 146

- Harrison and, 46

- radio and, 96–97

- Sarnoff and, 141

- Young, Roy A., 247

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

ABOUT THE AUTHOR

Andrew Ross Sorkin is an award-winning journalist for The New York Times and a co-anchor of Squawk Box, CNBC’s signature morning program. He is also the founder and editor at large of DealBook, an online daily financial report published by The New York Times that he started in 2001. Sorkin is the bestselling author of Too Big to Fail and the co-producer of the 2011 film adaptation, which was nominated for eleven Emmy Awards. Sorkin is also the co-creator of the drama series Billions on Showtime.

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