The Great Crash 1929 was written in the 1950s. It highlights the short history of the 1920s Stock Market bubble, the subsequent crash, and the Great Depression that came soon afterwards.
Politicians, bankers, and market commentators all reacted in similar ways during the 1920s. Fact was, nobody knew exactly what was really happening.
There were breaks in the market in June and December of 1928 and also in February of 1929, but the Stock Market still continued its upward trend.
In this book, Galbraith states that by the summer of 1929, the whole United States was consumed by the Stock Market.
Even bell boys in hotels had an opinion.
Galbraith describes that there were various attempts, both successful and unsuccessful, to manipulate the market during 1929.
During this boom, the attitude of the public to insider trading was not one of anger, but one of "I wish I could get a piece of the action."
Throughout 1929, stockbrokers' offices were packed virtually all day with customers who'd rather watch the ticker tape than go to work.
By September of that year, the market began to slip. But such was the hype, that no one seemed at all worried.
Galbraith continues with stating that the accepted view of the crash was that the US economy was heading for trouble. Industrial production, transportation of goods, and house building were all declining.
At the time of the crash the general view was that a depression could not have been foreseen.
But despite major corrections in the market during September and October, there were still no obvious signs of any collapse.
On Monday 21st. Oct the value of transactions was a little over 6 million - the third largest in the history of Wall Street.
The ticker began to fall behind. It couldn't keep up. By noon it was one hour slow, by the end of the day - one hour 40 minutes.
During the boom times, a lagging ticker didn't matter much but this time it made people nervous and they began to sell their shares.
On the 24th. October the crash began in earnest. Nearly 13 million stocks changed hands.
Rich people came in to buy and the day ended up 2 points.
The next two days' trading was heavy, but prices were stable. Newsapers reported that the worst was over. Markets settled, the economy was fundamentally sound.
The following Monday, the crisis began again. Markets declined further than they had in the previous week. The bankers met again.
The first half of November the markets continued to slide. There was now an admission that things were bad.
On Wednesday 13th. November the New York Times Industrials closed at 224. 50% down from the 542 seen on 3rd. September.
In the Spring of 1930 the Stock Market recovered but in June it fell again and continued down until June 1932.
In July 1932 the New York Times Industrial was at 58.
The depression had now set in.
Some say that the Great Crash alone was responsible for the Depression but it took a "perfect storm" to sustain it.
There were weaknesses in the US economy as early as 1921.
The whole banking system was corrupt. 5,000 banks never re-opened as a result of bad practices. Dishonest, self-interessted and dangerous bankers like J.P. Morgan did ot pay ay taxes between 1930 and 1932, and were branded by the media as "banksters" - the banking world's version of their own gagsters.
A New York districy attorney, Ferdinand Pecora, was appointed to investigate the corruption.
One after another, bankers - including J.P.Margan - were supoenaed and dragged before Pecora to answer for their misdeeds.
The U.S. Presidents of the time, Coolidge and Hoover tried their best to prop up the economy and from the mid 1930s the US armament industry went into over-drive as World War II loomed ever closer.
J.K. Galbraith's book is the recognised text book on the subject of the Great Crash. In our opinion, it is required reading and is near the top of our list of must have resources.