Alec
Wilder, a songwriter in New York in 1929, interviewed by Stud Terkel
in "Hard Times" four decades later, described this typical exchange
with his money manager:
"I knew something was terribly wrong because I heard bellboys,
everybody, talking about the stock market. About six weeks before
the Wall Street Crash, I persuaded my mother in Rochester to let me
talk to our family adviser. I wanted to sell stock which had been
left me by my father. He got very sentimental: 'Oh your father
wouldn't have liked you to do that.' He was so persuasive, I said
O.K. I could have sold it for $160,000. Four years later, I sold it
for $4,000."
Exhausted and numb from days of hectic trading and back office
operations, the brokerage houses pressured the stock exchange to
declare a two day trading holiday. Exchanges around North America
followed suit.
At first, the Fed refused to reduce the discount rate. "(There) was
no change in financial conditions which the board thought called for
its action." - though it did inject liquidity into the money market
by purchasing government bonds. Then, it partially succumbed and
reduced the New York discount rate, which, curiously, was 1 percent
above the other Fed districts - by 1 percent. This was too little
and too late. The market never recovered after November 1.
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