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The Crash Of 29'

In 1929 an investor called Will Payne stated that it was so easy to make money on the Wall Street Stock Exchange that it was no longer a gamble. A gamble is when someone loses and someone gains, here everybody was winning. In an article titled Everybody Ought to be Rich, John Jaskob the author proposed a get rich scheme by saying that if $15 per month is invested in stocks then this money can be converted to $80,000 over a period of 20 years. In 1928 President Coolidge said, "No Congress of the US ever assembled on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment......and the highest record of years of prosperity.” Just before the 1929 stock market collapse a journalist asked a speculator about the profitability of investing in the stock market. The speculator replied, "One investor buys General Motors at $100"(he meant a GM share) "sells to another at $150, who sells it to a third at $200. Everyone makes money". From 1925 to 1929, the ‘Boom Period’ every share in the stock market seemed to be going up and industrial sector shares more than trebled in price. Stocks of RCA (Radio Corporation of America) were traded at $2 in 1921 and $500 in 1929. This was the magic of the bubble, a bull market in which Keynes ‘Animal Spirits’ took over entrepreneurs and speculators. People were buying because everybody was buying shares as a result all and sundry wanted to take part in stock investing. During the 1920s Americans believed in the ‘new paradigm’ an era of capitalist upswing and President Calvin Coolidge believed that the prosperity will go on forever. In reality it was the herd instinct of the investors which created panics and rushes in the market. In September 1929 the New York Times recognized the universal fact that what goes up must come down by commenting, “It is a well-known characteristic of boom times that the idea of their old...