1929: The Great Crash Page #2

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all across America people

were in love with the Stock Market.

Technology made it all possible.

The latest share prices flashed from Wall Street

could be printed out within minutes across America

using telegraphic

ticker-tape machines.

You could find ticker tape

in night clubs in railroad depots,

in beauty parlours, on ocean liners.

The market became a pervasive part of

America's play culture in the 1920s.

I eat sleep, dream, talk stocks,

the only way, I believe,

to make money. It's exciting.

I love it

17,000 dollars' profit

on 3,500 dollars' capital.

Not bad!

There were wild speculations

in all kinds of securities -

movie company stocks, aeronautical

stocks, all the auto company stocks.

One of the hot stocks of the 1920s

was Radio Corporation of America.

It was a lot like today's Google.

It was cutting-edge technology.

They had this idea that you could

put radios in cars - imagine that(!)

The American investing public began

to connect the products they were using

that were coming from

corporate America

with the notion that, "hey, I might own a share of

the company that makes that product that I like. "

By the mid-20s, around 3 million

Americans were in the market,

and Wall Street gripped the public imagination.

With tales of fortunes being made overnight,

the idea of a great bull market - where

shares only seemed to go up - took hold.

Every popular magazine,

every newspaper, every radio station

was fascinated by what was going on

in the Stock Market.

People charted the activities of celebrities

like Charlie Chaplin or Groucho Marx

and were fascinated by what stocks

they happened to be speculating in.

The young comic actor Groucho Marx

invested all his savings into the market

and was so pleased with his profits on paper

that he persuaded his brothers to invest, too.

What an easy racket.

RCA went up seven points

since this morning.

I just made myself

7,000 dollars.

But it wasn't just

celebrities becoming speculators.

The big Wall Street speculators

were becoming celebrities themselves.

They were thought of as creative,

entrepreneurial and bringing wealth to America.

Joseph Kennedy, father of

the future President Kennedy,

was one of this new breed

of shrewd financial superstar.

People were fascinated because some of these

men, like Joseph Kennedy, were ordinary folks.

They were men from nowhere

and their rapid rise on the market

was a kind of inspiration to ordinary folk that

that might even be possible for them some day.

Stories circulated that anyone from bellboys

to barbers could make easy money on the market.

A shoeshine boy on Wall Street, Pat Bologna, was one

of those inspired by these tales of rags to riches.

Everyone was going

to make a fortune.

If you lived in New York,

the Stock Market was king.

My father was

probably about 17 or 18.

On a daily basis,

he would shine the shoes

of, literally,

the great men of America.

People like Joseph Kennedy,

executives like Mitchell.

He would converse with them and became somewhat

of an expert on things like the Federal Reserve

and things that you wouldn't think

that a shoeshine would be expert on.

But he was talking to the great minds

of Wall Street every day, all day.

So my father began to invest

in the Stock Market.

If the truth be told, I learned how

to read reading the stock pages.

Cos that was what my father did. I

mean, we grew up with the Stock Market.

There was the Stock Market for breakfast,

and for dinner when he came home.

The Stock Market was the world.

I started in 1928 because,

like many young people,

I wanted to go to the place where

everybody was making all this money.

My first job was to be a messenger

boy on the floor of the Exchange.

It took only a week or two to find out

that, most of the time, people are greedy.

People had so much faith

in the bull market

that they borrowed increasing sums of

money to speculate on rising share prices.

This way of buying shares was known

as "buying on margin".

The investor was required

to put down only part of the money,

with their broker

funding the rest.

The culture of "buy now, pay later"

had spread to the Stock Market.

Buying stocks on margin means essentially

that you're buying them with borrowed money.

By the late 1920s, 90% of the purchase price

of the stock is being made with borrowed money.

There were no rules about

how much you could borrow,

and people borrowed

enormous sums of money to buy stocks.

You could buy $100 stock for $25,

and then the brokerage firm

would loan you the other 75.

And if the stock went up - and in the late

'20s, everything seemed to go up and up -

then that $25 could turn into

an investment worth 200 or 300.

So it became a huge part of the US

economy to loan money for the Stock Market.

In fact, in the late 1920s, nearly 40

cents of every dollar loaned was for stocks.

This vast influx of borrowed money

into the Stock Market

created more demand for shares,

pushing prices ever upwards.

In 1928, the market went up

by almost 50% in just 12 months.

And as stocks continued to rise, more and more

investors borrowed money to get a piece of the action.

One of them was shoeshine boy

Pat Bologna.

My father didn't have a lot

of money in the Stock Market.

He told me at the time

he had about $6,000 in cash.

But remember, $6,000 in cash

translated into a lot of stock

because in those years, you only

had to put 10% down for margin.

So at $6,000, you could have

$60,000-worth of stock.

Wall Street

was hungry for new punters.

There was one group of would-be investors

that the Street had always ignored,

but whose money it now wanted.

Up until the 1920s, women had played

a very small role on the Stock Market.

Part of this was simply

gender prejudice.

They were considered incapable

of the kind of cool sangfroid

that was necessary if you speculated

in the market. But in the 1920s,

part of the popularisation of the Stock

Market included huge numbers of women.

Well, the '20s were

a big time for women, anyway.

They really stepped out

on their own.

They began to take control of their own money,

they went to college in record numbers in the 1920s,

and as they did that, they also

got interested in the Stock Market,

and it was a way for them

to build their own wealth.

One such investor was a pioneering New

York photographer called Alice Austen.

She lived on Staten Island, just

across the water from Wall Street.

She had moved into this house when

she was a couple of months old.

She was bright, she was adventurous.

By the time she was 11,

she had received a camera, which

was a new invention by the time.

And she immediately took to it.

Over the years, she took

some 8,000 glass-plate negatives,

making her one of America's earliest

and most prolific photographers.

Alice's inheritance from her grandfather

had funded a comfortable lifestyle,

but it had dwindled by the 1920s, and she was

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