"The fundamental business of the country is on a sound and prosperous basis."
HERBERT HOOVER, Oct. 25, 1929
"In January of 1929," Stewart Holbrook said in The Age of the Moguls, "there was no one to look over the edge of the cliff and note how far it was down to the bottom of the canyon."
Nobody wanted to look. America was in the Big Bull Market, getting richer minute by minute since 1924, save for only an occasional setback. Now stocks only went one wayUP and there was no reason why they shouldn't keep going that way. There was no reason why Coolidge Prosperity shouldn't go on forever. Mr. Coolidge himself said so in his State of the Union message as he prepared to turn
over the White House to its new tenant, Herbert Hoover. "No Congress . . . I ever assembled," said the President, "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."
Oh, there were some areas lacking in tranquility, contentment or even easy money. There were people who hadn't yet quite recovered from the Depression of 1920-1921the farmers, notably. There were sharecroppers in the South taking the barest existence out of the soil. There were men in the mines and mills in the great industrial centers earning hardly enough to feed their broods.
Nobody looked that way. The Wall Street tickers tapped out a symphony of golden wealth. It was the mood music of the times, the climactic tones of the Get-Rich-Quick Era; millions danced to the dizzy strains or fed on the lush printed prose that accompanied them. John J. Raskob sat for a Ladies Home Journal interview entitled, in his own words, "Everybody Ought to Be Rich." Raskob was vice-president of General Motors, an ally of the DuPonts and a director of the Bankers Trust Company and American Surety and the County Trust andwell, he came solidly qualified. This is what he said:
"Being rich is, of course, a comparative status. A man with a million dollars used to be considered rich, but so many people have at least that much these days, or are earning incomes in excess of a normal return from a million dollars, that a millionaire does not cause any comment . . . In my opinion the wealth of the country is bound to increase at a very rapid rate . . . Anyone who believes that opportunities are now closed and that from now on the country will get worse instead of better is welcome to the opinionand whatever increment it will bring. I think that we have scarcely started . . . I am firm in my belief that anyone not only can be rich but ought to be rich . . . Prosperity is in the nature of an endless chain and we can break it only by refusing to see what it is . . ."
There was plenty of chapter and verse in the Raskob thesis that sunny August of 1929. The financier pointed out that anyone who had the foresight to put $10,000 into the common stocks of General Motors in 1919 "now would be worth more than a million and a half dollars." He said that anyone who started then and there to put $15 a month into common stocks and let the dividends accumulate would in 20 years have at least eighty thousand dollars and an income from investments of around four hundred dollars a month."
Compared to some of the other super-salesmen of the time, Raskob seemed conservative. Edwin LeFevre, a familiar Wall Street figure, told of one nameless plunger who ran $100,000 into $20,000,000 and another who went in with a mere million and made it multiply thirty times in eight months. "Never before have such fortunes been made overnight by so many people," said LeFevre. But he was talking about investors with substantial stakes. The stories about the little man were much more enticing: the peddler who ran $4,000 up to $250,000; the butler who listened in on a financiers' cigars-and-brandy session and picked up a fast $150,000; the chauffeurs-with-big-ears
who got healthy buying what the boss talked about on the way to his brokerage house in the morning; the Stock Exchange clerks and pages who brought home feedbox stuff for everybody on the block and ran small pools into silver streams.
Once the hallowed money mart at Broad and Wall was more or less off-bounds to the little man. It was the resort of the professional speculator, the "insider." Now everybody was solicited to come in and put his money on the lineand it wasn't gambling so much as an
investment in the glorious American future, an expression of faith in the endless, wondrous prosperity that blessed the land. Only the hardiest spoilsports rose to protest that the wild and unchecked speculative fever might be bad for the country, and the merry hum of the tickers drowned out their voices. Why not? The money lay in stacks in Wall Street, waiting to be picked up. You had to be an awful deadhead not to go get some.
It was such a glorious time that the National Association of Merchant Tailors ordained a well-dressed American should have twenty suits, a dozen hats, eight overcoats and twenty-four pairs of shoes. That was for Just Plain Bill, 1929 model. The association said the man "of social position" should run through six sack suits a season and stock his wardrobe with two full-dress suits, a single and double-breasted tuxedo and some tropical evening wear for the good old summertime.
The tailors weren't alone. There were ads tempting the masseslet's say the upper masseswith $50,000 Russian sable coats, $45,000 duplex apartments, slender, low-slung Pierce Arrows at $8,200 and women's suits starting at $450. As 1928 roared to a happy close, the New Yorker carried a double-page spread from Black Starr and Frost (Fifth Avenue, Paris, Palm Beach) offering a rose-pink pearl necklace that had a rather expensive sound. "For more than one hundred years this house has collected pearls," said the breathless text," . . . for more than one hundred years it was believed impossible to assemble a large single necklace in which each pearl would have the highest luster and be perfectly, exquisitely matched . . . and now, as the culminating achievement of our history, we have reached this goal. This necklace is conceded by experts and connoisseurs to be the finest in existence . . . Price $685,000."
It didn't seem unreasonable at that moment. If you read John J. Raskob, everybody ought to have had $685,000, or a running start on it, anyway.