The Crash of 1929 & The Great Depression (PBS) 1of6

AllHistories

12 Mar 201010:23

Summary

TLDRThe script recounts the 1920s economic boom, culminating in the 1929 stock market crash. It highlights the decade's optimism, with ordinary Americans investing in stocks, driven by the belief in perpetual prosperity. The narrative features wealthy figures like Jesse Livermore and the consumer revolution's rise, including new inventions and credit systems. The script also touches on the power concentrated among a few businessmen, setting the stage for the crash that shattered the illusion of endless growth.

Takeaways

📈 The script describes the stock market crash of 1929, which was a pivotal event in financial history.
🎉 The 1920s was a decade of prosperity and optimism, often referred to as the 'New Era', where people believed in endless growth.
🎵 The mood of the era was captured by the hit song 'Blue Skies', symbolizing the positive outlook of the time.
💼 Ordinary Americans began investing in the stock market, which was a new phenomenon leading to widespread participation.
📉 Stock values had been rising for almost eight years, creating a false sense of a perpetually rising market.
🏛️ The wealthy, like Jesse Livermore, lived extravagantly, setting a standard that many aspired to.
💼 The era saw the rise of bankers, brokers, and speculators as celebrities, reflecting the importance of the stock market in society.
🌐 The economy was changing with the dawn of the consumer revolution, introducing new products and technologies.
💳 Consumer credit became a way of life, allowing the average worker to borrow money and fueling consumption.
🗣️ Politicians like Herbert Hoover promised to banish poverty, reflecting the widespread belief in permanent prosperity.
🚀 A few wealthy men, like William C. Durant, had immense power over the market, influencing stock prices and the economy.

Q & A

What was the mood of financial leaders on New Year's Eve, December 31st, 1929?
-Financial leaders were celebrating what had been a decade of prosperity and boundless optimism, believing the party would last forever.
What was the term used to describe the economic outlook of the 1920s?
-The term used to describe the economic outlook of the 1920s was 'the new era', which was characterized by optimism and the belief in a perpetually prosperous economy.
What was the significance of the song 'Blue Skies' in the context of the 1920s?
-The song 'Blue Skies' symbolized the optimism and positive outlook of the 1920s, reflecting the general belief that everything was going to be great.
How did the stock market perform in the late 1920s?
-Stock values had been rising for almost eight straight years, creating an atmosphere where it seemed there were no upper limits to growth.
What was unique about the stock market during this period that allowed ordinary Americans to invest?
-It was the first time many ordinary Americans began to invest in stocks, attracted by the rising stock values and the potential for easy wealth.
What was the lifestyle like for those who made fortunes in the stock market during the 1920s?
-Those who made fortunes, like Jesse Livermore, lived extravagantly with multiple homes, private railroad cars, and yachts, enjoying a lifestyle akin to royalty.
What promise did Herbert Hoover make during his presidential campaign of 1928?
-Herbert Hoover promised that with the continuation of the policies of the last 8 years, poverty would be banished from the nation.
How was the American economy described post-World War I?
-The American economy was described as being intact and strong, with the dollar being dominant, making it the only strong country in the world.
What was the significance of the consumer revolution in the 1920s?
-The consumer revolution marked the dawn of a new era where inventions like radios, refrigerators, and air conditioners became mainstream, and consumer credit became a way of life.
What was the term used to describe the belief in an everlasting economic boom in the late 1920s?
-The term used was 'permanent prosperity', which was a term often heard in the late 1920s, suggesting an age of unending economic growth.
Who were some of the wealthy men that dominated Wall Street during the 1920s?
-Men like William C. Durant and Jesse Livermore dominated Wall Street, amassing fortunes through stock speculation and market manipulation.

Outlines

00:00

📈 The Roaring Twenties and Stock Market Boom

The paragraph discusses the exuberant optimism of the 1920s, often referred to as the 'Roaring Twenties', where the stock market was booming, and people believed in perpetual economic growth. Financial leaders and the public were celebrating a decade of prosperity. The era was characterized by a widespread belief in the 'new era' of endless wealth, symbolized by the hit song 'Blue Skies'. The stock market was seen as a new way for ordinary Americans to invest and make fortunes, unlike the industrial barons of the past. The narrative also touches on the lifestyles of the wealthy, such as Jesse Livermore and Charles Mitchell, who amassed fortunes through stock trading rather than traditional industry. The public was fascinated by these financial celebrities, and there was a rising expectation that everyone could share in this prosperity.

05:02

🏡 The Lifestyle of the Wealthy and the Consumer Revolution

This paragraph delves into the extravagant lifestyles of the wealthy, exemplified by Jesse Livermore's multiple luxurious homes and possessions. It contrasts the opulence of the time with the more modest living conditions of the average American. The paragraph also discusses the rise of consumerism and credit in the 1920s, with new inventions like radios, air conditioners, and electricity becoming commonplace. The era was marked by a shift towards a consumer-driven economy, with mass-market marketing and the advent of consumer credit, allowing the average worker to buy now and pay later. The economic optimism of the time led to the belief in 'permanent prosperity', with Wall Street and a few wealthy businessmen dominating the financial scene.

10:03

💼 Speculation and the Illusion of Wealth

The final paragraph focuses on the speculative nature of the stock market during the 1920s, where individuals like Jesse Livermore made fortunes not by investing in solid companies, but by playing the market for quick gains. It highlights the public's fascination with these speculators and the desire to replicate their success. The narrative suggests that many people were drawn to the stock market with the hope of striking it rich, without necessarily understanding the underlying health or value of the companies they were investing in.

Mindmap

Keywords

💡Stock Exchange

The Stock Exchange is a centralized marketplace where stocks and other securities are issued and traded. In the video, it represents the hub of financial activity where the 'greatest crash in history' occurred, marking the beginning of a significant economic downturn. The mention of 'tremendous crows gathered outside the stock exchange' symbolizes the anticipation and anxiety leading up to the crash.

💡Crash

In the context of the video, 'Crash' refers to the sudden and severe decline in stock prices, specifically the stock market crash of 1929. This event is a central theme, illustrating the end of the prosperous 'Roaring Twenties' and the beginning of the Great Depression. The 'greatest crash in history' indicates the scale and impact of the economic collapse.

💡New Era

The term 'New Era' is used in the video to describe the period of prosperity and optimism in the 1920s. It encapsulates the belief that the economy would continue to grow indefinitely, as suggested by the phrase 'the party would last forever.' This concept is tied to the overarching narrative of the video, which explores the illusion of perpetual economic growth and its eventual collapse.

💡Prosperity

Prosperity, as discussed in the video, refers to the state of being successful, thriving, and financially successful. It is used to describe the economic climate of the 1920s, where there was a widespread belief in 'boundless optimism' and the expectation that the good times would continue indefinitely. The video contrasts this with the harsh reality of the subsequent economic crash.

💡Speculator

A speculator is someone who invests in stocks or other ventures with the hope of making a profit from short-term price fluctuations, rather than from the long-term growth of the company. In the video, speculators like Jesse Livermore are highlighted as figures who amassed fortunes by buying and selling stocks, contributing to the speculative bubble that eventually burst.

💡Ticker Tape

A ticker tape is a paper strip that contains a record of stock prices and transactions, which was used before electronic trading systems. The video mentions that Jesse Livermore had a ticker tape in every home he owned, indicating the extent of his involvement in the stock market and the broader culture of stock speculation during the era.

💡Consumer Revolution

The Consumer Revolution refers to the period when mass production and marketing led to an increase in consumer goods and a shift towards a consumer-driven economy. The video describes the 1920s as the dawn of this revolution, with new inventions like radios and refrigerators becoming commonplace, reflecting the optimism and material prosperity of the time.

💡Consumer Credit

Consumer Credit is the ability of consumers to purchase goods and services through borrowing. The video notes that 'buy now, pay later' became a way of life by 1929, indicating a shift in consumer behavior and economic practices that contributed to the economic boom and eventual bust.

💡Wealthy Men

The video discusses how a small group of wealthy men, such as William C. Durant, dominated Wall Street and had significant influence over the economy. These 'wealthy men' represent the concentration of power and wealth that characterized the financial sector during the 1920s, which played a role in the market's eventual collapse.

💡Optimism

Optimism in the video is portrayed as the pervasive belief in a continually growing economy and a better future. It is exemplified by the hit song 'Blue Skies' and the general public's attitude towards the stock market. This optimism is contrasted with the harsh realities that followed the market crash, highlighting the theme of illusion versus reality.

💡Great Depression

While not explicitly mentioned, the Great Depression is the economic crisis that followed the stock market crash of 1929 and is a key context for the video's narrative. It represents the severe and prolonged downturn that resulted from the overconfidence and speculative excesses discussed in the script.

Highlights

The stock market crash on December 31st marked the end of a decade of prosperity and optimism.

Financial leaders believed the economic boom would last forever, referring to it as the 'new era'.

The 1920s were characterized by a pervasive sense of optimism and the illusion of endless growth.

The hit song 'Blue Skies' from 1929 encapsulates the era's spirit of unbridled optimism.

The stock market was seen as a new way for ordinary Americans to invest and potentially make fortunes.

Stock values had been rising for almost eight years, creating the illusion of a perpetual upward trend.

Wealthy investors like Michael Mean, Jesse Livermore, and Charles Mitchell became celebrities and amassed fortunes through stock trading.

The extravagant lifestyles of the wealthy, such as Jesse Livermore, fueled public fascination and aspirations.

Herbert Hoover's presidential campaign promise in 1928 to banish poverty reflected the era's optimism.

The 1920s marked the beginning of the consumer revolution with new inventions and mass-market products.

Consumer credit became a way of life, allowing the average worker to borrow money and buy on credit.

The era's optimism led to the belief in permanent prosperity, with Wall Street receiving credit for this economic boom.

A small group of wealthy men, like William C. Durant, held immense power and influence over the stock market.

Jesse Livermore, a pure speculator, made a fortune by playing the market without concern for a company's health.

The public's desire to replicate the success of wealthy investors like Livermore was widespread.

The stock market's rise and eventual crash highlighted the dangers of speculation and the illusion of endless prosperity.