Explanations: The Great Crash 1929

The Great Crash 1929

by John Kenneth Galbraith

I don't know how this book ended up on my to-read list back in 2012, but I enjoyed it tremendously in 2019.

While some of the conditions creating the environment enabling the dramatic rise and fall of the stock market in 1929 have been alleviated, I was struck more than once at how we saw the same problems and problematic responses during the 2008 financial crisis.

Always, when markets are in trouble, the phrases are the same: "The economic situation is fundamentally sound" or simply "The fundamentals are good." All who hear these words should know that something is wrong.

He talks about it later as well:

Mr. Mellon was participating in a ritual which, in our society, is thought to be of great value for influencing the course of the business cycle. By affirming solemnly that prosperity will continue, it is believed, one can help insure that prosperity will in fact continue. Especially among businessmen the faith in the efficiency of such incantation is very great.

Obviously in 1929 (recounted in this book) and in 2008 (when I vaguely paid attention as an adult), these "incantations" were ineffective. It would be interesting to see if anyone can point to a time when the economy was struggling and such affirmations helped steady it before there were drastic effects.

The machinery by which Wall Street separates the opportunity to speculate from the unwanted returns and burdens of ownership is ingenious, precise, and almost beautiful.

He mentions a few of these methods like funding to customers through brokers and adjustments to margins and interest rates to keep funds available.

The purpose is to accommodate the speculator and facilitate speculation. But the purposes cannot be admitted. If Wall Street confessed this purpose, many thousands of moral men and women would have no choice but to condemn it for nurturing an evil thing and call for reform.

Mingled with the financial record is a remarkable tone of humor.

To say that the Times, when the real crash came, reported the event with jubilation would be an exaggeration. Nevertheless, it covered it with an unmistakable absence of sorrow.

One of the points Galbraith makes in the book is how most people who anticipated the 1929 crash realized there was only a little hope of avoiding it, mainly they realized it could not be stopped. The only choices, though, were to allow it to happen "naturally" as a results of the market itself imploding or taking action toward a "deliberately engineered collapse." In hindsight, it seems obvious a slow controlled collapse would be preferable to the disaster that ensued, but it's difficult to assess. Additionally, whoever took action toward a controlled collapse would bear the unmitigated blame for the entire collapse despite protestations of a potentially greater catastrophe. The system, therefore, and one which continues today, discourages any person or entity from suggesting restrictions or constraints on the financial market as a whole.

One aspect I misunderstood before reading the book was the relatively small number of people trading on the stock market. According to Galbraith, at the peak of speculative trading in 1929, there were probably less than a million. Google tells me there were 121.8 million people in the United States in 1929. Somehow less than 1% of the population wreaked havoc on the economy and ravaged the lives of millions for a decade to come. One of the explanations Galbraith proposes is that the stock market crash disproportionately devastated the very wealthy in an economy that was heavily dependent on luxury spending. When the wealthy people stopped buying luxuries, the crash spread throughout the entire economy.

Galbraith also tackles the misconception that suicides increased, people were leaping to their doom from New York City skyscrapers. Suicides in New York were substantially higher in the months before the crash than after. The rate did rise, however, over the course of the Great Depression. I can imagine how the initial shock and optimism gradually deepened to unremitting helplessness. Galbraith suggests people remembering these later suicides mentally altered their dates to the time of the crash.

The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few as possible escaped the common misfortune.

Those who survived early dips with intact capital were lured back to the market for the "bargains," companies now priced below their estimated value. The price of the stocks stabilized after November, but continued to decline over the next twenty-four months, dropping to a third or a fourth of their "bargain" price. So even those who bought "bargains" found their investments worthless over the course of the next few years.

My library only had this book in an anthology: The Affluent Society and Other Writings. I only read The Great Crash 1929 but I enjoyed his style so much I put the whole book on my to-read list. (At my current rate, I'll get to it in about ten years, when my youngest son graduates high school.)

This post contains my own opinions. I did not receive anything in exchange for it. Links to Amazon are affiliate links.

Sacrificing Everything for the Faith: Blessed Miguel Pro

Blessed Miguel Pro: 20th-Century Mexican Martyr

by Ann Ball

This is one of the possible saint biographies named in the Mater Amabilis™™ Level 4 lesson plans (8th grade). It coordinates with the 20th Century history plans. Our children are already familiar with the story of this mischievous priest from the Glory Story.

Blessed Miguel Pro is one of many priests, religious, and lay Catholics persecuted and executed by Mexican revolutionaries. Unlike many of them, there are plenty of photographs of his execution in 1927. Photographs of the execution, the moment of impact of the bullets, of a soldier standing over Father Miguel's body to shoot him in the head, and a photography of a bloody Father Miguel in death are included in this book, so be aware if you intend to share this book with younger children. Though disturbing, I don't think they are too graphic for my 13 1/2 year old son. He'll be reading this book first term next year.

This book is not a literary biography or historical fiction. The author draws on interviews and letters to present a basic history of Miguel Pro from this childhood through his disrupted studies for the priesthood (when the seminaries in Mexico were closed) and, finally, his return to his Mexico in the midst of the persecution of Catholics and the Church. Throughout the book, little stories and examples of his personality are woven into the more basic narrative.

It is appropriate for my 8th grade son to begin wrestling with martyrdom in the modern world. Living in the security of 2017 Kansas, it is easy to think the martyrdom of saints like St. Paul and St. Ignatius of Antioch are only found in the ancient world. Bl. Miguel Pro is, however, one of many Catholics and Christians killed because of their faith (explicitly or implicitly) in the past century and into the current year. Bl. Miguel gives us an example of how to live faithfully, joyfully, and devotedly in a modern world seeking our destruction. He did not take arms against an unjust government, instead serving the persecuted through the sacraments and gifts of food and clothing.

This book seems to be reasonably well-researched, though not as a scholarly work. There are quite a few resources in the bibliography, but they are not specifically referenced in the text. It also doesn't seem like there are original sources (like the letters), though it's likely those would be difficult to research by an American traveling in Mexico at the current time. There is no translator mentioned for either the letters or the prayers and poems included in the appendices, so I assume the author translated them herself. Despite these minor shortcomings, this is a good book for a late middle school or high school student on Bl. Miguel Pro.

I purchased this book directly from the publisher and received nothing in return for this review.

American History Picture Books in 2012-2013 Post 3 of 5: World War I, Women's Suffrage, and the 1920s

This is the third post in a series on the picture books we read along with our American History studies in 2012-2013 when First Son was in  third grade, First Daughter was in kindergarten, Second Daughter was four and Second Son wasn't paying attention.

Gold Rush Winter by Claire Rudolf Murphy, illustrated by Richard Waldrep, is an early chapter book rather than a picture book, but it could easily be read aloud to young children. It's based on the real life of a girl who joined her father in Alaska during the Gold Rush. It's entertaining and informative and a good addition to any study of Alaska or the Gold Rush.

Emily by Michael Bedard, pictures by Barbara Cooney, is a story of Emily Dickinson, one of my favorite poets, illustrated by Barbara Cooney, one of my favorite illustrators, so I can't explain why it wasn't on my schedule for the year. It's a fictionalized account of a friendship between a neighbor child and the poet that shows how she lived and reluctantly interacted with others. It would make a wonderful complement to any study of Dickinson.

Brave Girl: Clara and the Shirtwaist Makers' Strike of 1909 by Michelle Markel, pictures by Melissa Sweet, is a new book (published in 2013) so we didn't read it when we studied this era, but it's a fantastic book. It's about immigration, women's rights, unions, industrialization, and tells the inspiring story of a courageous young woman. Combine this book with a discussion of continuing dangerous conditions in factories in other parts of the world and you could have quite the conversation.

Miss Moore Thought Otherwise: How Anne Carroll Moore Created Libraries for Children by Jan Pinborough, illustrated by Debby Atwell, is not a book we read during our studies because I hadn't read it yet (it was published in March 2013), but it's now one of my favorite picture books. I particularly think it would fit in well with a reading through American history because it offers a more joyful glimpse of the era. Read with Brave Girl, younger readers could contrast the two books and see that while some are courageous and walk picket lines, others are courageous and build libraries. We need both.

I didn't read The Donkey of Gallipoli: A True Story of Courage in World War I by Mark Greenwood, illustrated by Frane Lessac, to the children because I really tried to focus more on what was happening in America than overseas during the wars. (This was American history; we also cover the wars in Western history.) Also, this story is probably more appropriate for older elementary students or even middle school students, but it's a marvelous true tale of bravery and the devastation of war. The illustrations are brilliant, filling every bit of every page with color.

When Esther Morris Headed West: Women, Wyoming, and the Right to Vote by Connie Nordhielm Wooldridge, illustrated by Jacqueline Rogers, tells the story of Esther Morris, the first woman to hold elected office in the United States. What I like best about the book is how the focus is not just on Esther Morris, but on the man who believed women should be able to vote and the lawyer who changed his mind when he saw how well Esther managed herself as a judge. The book seemed to have a touch more law and politics than I thought my girls would enjoy, so I just put it in the book basket this time around.

I Could Do That!: Esther Morris Gets Women the Vote by Linda Arms White, pictures by Nancy Carpenter, is a book on Esther Morris that was better for my young girls. Esther is brave, competent, and doesn't get discouraged even when she doesn't get her way. The phrase "I could do that!" is one children will eagerly adopt.

Mama Went to Jail for the Vote by Kathleen Karr, illustrated by Malene Laugesen, tells the story of the women's suffrage movement in the early 1900s from the point of view of the daughter of a suffragist. While a fictionalized account, it gives a good idea of what life was like for the women in the movement, including supervising the cook and dinner for their husbands. It's full of high ideals and wonderful illustrations.

A Splash of Red: The Life and Art of Horace Pippin by Jen Bryant, illustrations by Melissa Sweet, is a biography of Horace Pippen I discovered after our year was done, but it would have been a great addition to our studies. Pippen was inspiring as a person and the illustrations are evocative of his work. (Melissa Sweet has illustrated so many wonderful books!)

Gershwin's Rhapsody in Blue  by Anna Harwell Celenza is a fun look at music composition as Gershwin is composing Rhapsody in Blue. It focuses more on the process of the composition rather than technical terms or everything that influenced him, but it's perfect for young children as an introduction to much of the music of 1920s America. The included CD is a fantastic end to the book as children are prepared to listen by the story. The piece itself is also one most children will enjoy, of course. I love the illustrations.

Waiting for the Evening Star by Rosemary Wells, illustrated by Susan Jeffers, tells of two brothers growing up in Vermont just before World War II. Their lives shaped by the seasons and the farm, by the community in which they lived, and by their dreams. The older brother, Luke, dreams of traveling and seeing the world, and eventually joins the Navy to fight in the war. Though he doesn't actually die in the book, his brother imagines that he will never return as he watches the train carrying his brother leave. It is bittersweet, both for the brother who remains and for the kind of childhood they had that has in many ways disappeared.

The Great Serum Race: Blazing the Iditarod Trail by Debbie S. Miller, illustrations by Jon Van Zyle, is a non-fiction book on the events behind the Iditarod, the race in 1925 to bring antitoxin serum to Nome, Alaska, where diptheria raged. There is a lot of text, so I put this in our book basket for First Son to read if he wanted, but I did not want to neglect it in this post because the illustrations are so amazing. The text is good, too, and the story is both exciting and inspiring. This is an excellent book for any child interested in Alaska, medicine, tests of endurance, or dog sledding.


Posts in This Series - I'll update this list with links to all the others after they post.
#1: Slavery and the Civil War
#2: Progressive Era and Immigration
#3: World War I, Women's Suffrage, and the 1920s (this post)
#4: The Great Depression and World War II
#5: Civil Rights, Hawai'i, Alaska, and Space Exploration

Here's a post on the books we read about World War I and the Jazz Age when First Son was in kindergarten. In addition, you can find links to all the picture books we read through American history in 2009-2010, when First Son was in kindergarten.