Folk Tales from the Crash -Learn to Earn_ A Beginner’s Guide to the Basics of Investing and Business.
A lot of hoodoo, folk tales, and nonsense have been passed along from generation to generation about the Crash of 1929. You may have heard the one about all the distraught investors committing suicide by jumping out of windows of tall buildings in New York. But according to a book called 1929: The Year of the Great Crash, by William Klingaman, there was no increase in the national suicide rate in the weeks following the calamity on Wall Street; only a few people jumped from windows, and not necessarily because they lost money in stocks.
The vice-president of Earl Radio Corporation leaped to his death from the eleventh floor of the Hotel Shelton on Lexington Avenue, but that was in early October, a couple of weeks before the Crash. On October 24, a few days after the Crash, a crowd gathered around a construction project where a man was sitting on a girder. They thought he was a prominent investor about to do himself in, but he turned out to be a construction worker having his lunch.
British statesman Winston Churchill was staying at the Savoy Plaza Hotel, directly under a room where another man hurtled himself out a window fifteen stories to the ground and was dashed to pieces. This incident was counted as a stock market fatality, although there was no evidence it had anything to do with stocks. Most of the business types who committed suicide during this period shot themselves, stuck their heads into ovens, or chose other methods besides jumping out of windows without a bungee cord.
For instance, James Riordan of the County Trust Company bank put a bullet into his head; Harry Crew Crosby, a married man, died in an opium orgy with his girlfriend (this was publicized as a Wall Street scandal, because Crosby was the son of an investment banker at J. P. Morgan, but he was a writer and had nothing to do with the bank, nor did the bank have anything to do with him); the wife of a Long Island stockbroker shot herself in the heart (nobody knows why she didn’t shoot him); an electric utility executive in Rochester, New York, gassed himself in his bathroom; a Philadelphia financier shot himself in his athletic club; a Providence, Rhode Island, investor dropped dead in his broker’s office watching the tickertape; a Milwaukee investor turned a gun on himself and left a note that said: “My body should go to science, my soul to Andrew W. Mellon (the famous Pittsburgh tycoon) and sympathy to my creditors.”
So where did we get the idea that victims of the Crash were throwing themselves off ledges in New York? The main source seems to be comedian Will Rogers. Soon after the Crash, Rogers said, “The situation has been reached in New York hotels where the clerk asks incoming guests, ‘You wanna room for sleeping or for jumping?’ And you have to stand in line to get a window to jump out of.”
But Rogers was just trying to get a laugh. He could afford to make jokes, because he followed the advice of another famous Wall Street tycoon, Bernard Baruch. Baruch was smart enough to get out of stocks entirely before the market crashed, and Rogers did likewise. Other entertainers, such as Eddie Cantor and Groucho Marx, weren’t so lucky.
The real victims of the Crash were the people who bought stocks with borrowed money, or “margin.” In those days, you were allowed to invest with only 10 percent down. So if you had $10,000 you could borrow $90,000 and buy $100,000 worth of stocks. When the Crash cut the prices of your stocks in half, you were left with $50,000 worth of stocks and a $90,000 debt you couldn’t pay back.
Folk Tales from the Crash