The Day America Crashed
The revival of interest in the Great Crash of the stock market in 1929 in the year of its fiftieth anniversary has coincided with the publication of a highly readable account of that event, The Day America Crashed, by Tom Shachtman. Shachtman is not a professional historian but a documentary filmmaker who has written films for the commercial and public television networks, a playwright, and a dialogue writer for foreign films. He writes good history, however, concerning himself not only with the Crash itself but also with its short- and long-term causes and effects. He also demonstrates an understanding of the sociological impact of the Crash on segments of the American public. His enviable literary style and sense of timing and continuity undoubtedly are reflective of his experience as a filmmaker and playwright. As a result, his book will appeal to the general reader as well as the student, sociologist, and historian.
The author’s motive for writing this book, clearly outlined in his Introduction, is to clarify what happened on October 24, and immediately before and after, with special emphasis on some of those individuals who were directly affected by it. The Great Crash is a subject that has long been minimized in American history textbook accounts. Indeed, many textbook writers devote little more than a paragraph to an event that marked a watershed in American history. Secondary and college teachers also often demonstrate a hesitancy to devote adequate attention to this event. Reasons for this appear to vary from a lack of understanding of the economic and financial conditions that produced and characterized it to an inadequate appreciation of its significance. Shachtman is convinced that this event must be studied if one is to have a full understanding of human nature in general and the American character in particular in a time of crisis. This was, after all, an event which directly affected between fifteen- and twenty-five million people who represented stockholders and their families. The Crash’s impact as a trigger of the Depression affected everyone. It was also a direct and painful rebuff to the widely held American conviction that, through luck and a little investment gambling, everyone could become rich. It demonstrated, in 1929, that rising prosperity is not inevitable—a lesson Americans are now learning anew. The scope of Shachtman’s book is national, although he concentrates by necessity on the activities taking place on Wall Street. It is also neither socially nor geographically discriminatory; the author investigates the impact of the Crash on the mill worker and automobile mechanic as well as the Wall Street financier and broker, on black and on white, on men and women, young and old, and in various sections of the nation.
Shachtman has chosen “Black Thursday,” October 24, 1929, as the day to chronicle. Tradition has often identified October 29, as the day of the Crash, but decided decline really began five days earlier. Although the 29th was a worse day on the New York Stock Exchange than the 24th—indeed it was the worst the Exchange ever experienced—it was essentially anticlimactic. Most had already been driven from the market with staggering losses beginning five days earlier, and the shock had come on the 24th. On the 29th, those who thought they might weather the storm were swept away. The world of illusion created by many Americans was indeed destroyed on October 24, and thus Shachtman’s choice of that day as his center of concentration is fully justified.
After providing an illuminating overview of conditions and attitudes in America at the time of the Crash, the author continues with a detailed hour-by-hour chronicle of the day, moving from one center of action to another, and a brief view of the evening. In the late 1920’s, America, as Will Rogers cogently expressed it, went on a “financial drunk.” Modern methods of production and enormous consolidation and centralization were working to create an America of rising material expectations which were being quickly satisfied. Almost everyone, through outright purchase or buying on the installment plan, could acquire the conveniences of modern living: electric irons, vacuum cleaners, washing machines, refrigerators, and cars. In 1929, twenty-three million cars were on the road serving a population of 125,000,000. Novelties which had been introduced during the past decade included pyrex, cellophane, celanese, rayon, dry ice, neon signs, sound motion pictures, air-conditioned theaters, and, of course, radio. America had become a nation of consumers, prosperity reigned supreme, and everyone hoped to share in it.
Businessmen were the high priests of this new prosperity, and the New York Stock Exchange was its temple. Initially regarded as a place where funds could be invested in anticipation of modestly rising values and good dividends, the stock exchange had become the center of frenzied speculation. Contributing to this trend were government monetary and tax policies which encouraged industrial expansion and investment, and banks eager to invest their depositors’ funds in stocks and to sell stocks through their security affiliates. Margin buying, investment trusts, excessive company profits, and the growing illusion that quick fortunes could be made in the market with a minimum of labor also played key roles. Everyone was encouraged to invest in the market in anticipation of a quick profit. Stock values continued to rise, and President Coolidge, shortly before leaving office in early 1929, encouraged the speculative fever by asserting that stocks were still cheaply priced. In late March, there was a brief period of...
(The entire section is 2313 words.)