Sidney J. Weinberg, "October 29, 1929" U.S. History Resources October 29, 1929 Sidney J. Weinberg, "October 29, 1929" Sidney J. Weinberg was a senior partner in one of Wall Street's leading brokerage houses, Goldman- Sachs Company. Many years after the fact, he still had a vivid memory of Tuesday, October 29, 1929, the climactic day of the "Great Crash." In an interview, he offered the following reflections on the crash and its causes. He also meditated briefly and mused over whether something of the same sort might happen to the stock market "today"¾that is, in 1969. October 29, 1929--I remember that day very securities." There's a credibility gap there. intimately. I stayed in the office a week There are always some people who are con- without going home. The tape was running, servative, who did sell out. I didn't know I've forgotten how long that night. It must any of these. have been ten, eleven o'clock before we got the final reports. It was like a thunderclap. I don't know anybody that jumped out of the Everybody was stunned. Nobody knew what window. But I know many who threatened it was all about. The Street had general con- to jump. They ended up in nursing homes fusion. They didn't understand it any more and insane asylums and things like that. than anybody else. They thought something These were people who were trading in the would be announced. market or in banking houses. They broke down physically, as well as financially. Prominent people were making statements. John D. Rockefeller, Jr., announced on the Roosevelt saved the system. It's trite to say steps of J. P. Morgan, I think, that he and his the system would have gone out the win- sons were buying common stock. dow. But certainly a lot of institutions would have changed. We were on the verge of Immediately, the market went down again. something. You could have had a rebellion; Pools combined to support the market, to no you could have had a civil war. avail. The public got scared and sold. It was a very trying period for me. Our investment Confidence ended the Depression in 1934. company went up to two, three hundred, and We had a recession in 1937. People got a then went down to practically nothing. As little too gay on the way up, and you had to all investment companies did. have a little leveling off. The war had a great deal of stimulus in 1939. Over-speculation was the cause, a reckless disregard of economics. There was a group A Depression could not happen again, not to ruthlessly selling short. You could sell the extent of the one in '29. Unless inflation anything and depress the market unduly. went out of hand and values went beyond The more you depressed it, the more you true worth. A deep stock market reaction created panic. Today we have protections could bring a Depression, yes. There would against it. Call money went up¾was it be immediate Government action, of course. twenty percent? A moratorium. But in panic, people sell regardless of worth. Today you've got No one was so sage that he saw this thing twenty-odd million stockholders owning coming. You can be a Sunday morning stock. At that time you had probably a mil- quarterback. A lot of people have said lion and a half. You could have a sharper afterwards, "I saw it coming, I sold all my decline now than you had in 1929. 1 Sidney J. Weinberg, "October 29, 1929" U.S. History Resources bought at fifty is now selling at eighty. So Most of the net worth of people today is in they have a good feeling. But it's all on values. They haven't got it in cash. In a paper. panic, values go down regardless of worth. Source: "Sidney J. Weinberg, 'October 29, 19297" From Studs Terkel, Hard A house worth $30,000, the minute you limes. New York: Pantheon Books, 1970, pp. 72-73. Copyright ©1970 by Studs Terkel. Used by permission of Pantheon Books, a division of Random have a panic, isn't worth anything. House, Inc. Everybody feels good because the stock they QUESTIONS 1. What does Weinberg say was the effect of assurances offered by business leaders like John D. Rockefeller? 2. What does Weinberg say was the cause of the crash? 3. Do you see anything contradictory in Weinberg's discussion of the likelihood of another Great Crash? If so, do you think this should affect the way a historian treats Weinberg's analysis of what happened in 1929? 2 .