History Book: The Crash of 1929

NICK EICHER, HOST: Today is Monday, October 21st. Thank you for turning to WORLD Radio to help start your day. Good morning. I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. Coming next on The World and Everything in It:  the WORLD Radio History Book.

75 years ago, the beginning of the largest naval battle of World War II. Plus, the grand opening of one of the most distinctive buildings in the world.

EICHER: But first, one of the worst economic events in modern world history. Here’s Paul Butler.

AUDIO: [ROARING TWENTIES MUSIC]

PAUL BUTLER, REPORTER: In the 1920’s the economy was roaring. Unemployment fell below 4 percent. Average salaries grew exponentially. The United States was the world’s largest manufacturer of consumer goods. And investing became everyman’s past time. 

FRANK CRUMIT: A TALE OF THE TICKER (1929 STOCK MARKET SONG) [LYRIC] “This little pig went to market, where they buy and sell the stocks…”

Newspapers boasted of laborers becoming millionaires in the stock market. Many bought stocks “on the margin”—or purchasing shares with a small down-payment of their own money, and borrowing the rest from brokers or banks. The loans were risky, but from 1921 to 1929, the U.S. Stock Market increased in value six-fold. So a lot of people were willing to take the risk to make a quick buck. 

In 1929, things began to change. On March 25th, the stock market lost 10 percent of its value. Several banks failed. Brokers called in their loans, and many investors lost most if not all of their gains. 

Throughout the summer, though, the stock market recovered and even set new records. However, manufacturing and production slowed dramatically. Some economists warned of a coming crisis, but investors were soon borrowing money again to cash in. 

CLIP: Somehow, it didn’t last forever. 

Throughout the autumn, the markets became less stable. By the third week of October, they’d devalued by 20 percent from their summer high. On Thursday, October 24th, the markets plummeted. The crash of 1929 had begun. 

CLIP: The time came when the ticker tape in the broker’s office told a new story…

The markets fell another 25 percent the following week. Many investors, both large and small, lost everything. 

CLIP: Sixteen and a half million shares of stock sold in a single day. Sold hopelessly, desperately, at any price…

Conventional wisdom blames the Great Depression, at least in part, on the Crash of 1929. While the rapid loss in stock prices contributed to the Great Depression, it was only one factor of many.

Over four years, beginning in 1929, industrial production cut in half. Disposable incomes dropped by more than a fourth. Unemployment rose eight-fold to the point that at the height of the Depression, one in four American workers was out of a job. As for stock prices, they collapsed to merely a tenth of their pre-crash high.

But since June of 1932, the market has followed a mostly positive trajectory. Though it still has a way of both making and breaking fortunes. The free market, after all, is a system of profit and loss.

FRANK CRUMIT: A TALE OF THE TICKER (1929 STOCK MARKET SONG) [LYRIC]: “Oh the Market is not so good today, your stocks look kind of sick, in fact they all drop down a point each time the tickers tick…

Next, October  23rd, 1944. 

BROUGHT TO ACTION: For the men of the third fleet, this was the climax to a battle they’d been waging for months. The men that were over Saipan in June, over Guam in July, Palao in September were moving west…  

Audio from the invasion film: “Brought To Action.” 

The Battle of Leyte Gulf occurred near the Philippine islands of Leyte, Samar, and Luzon. The Americans and Australians knew if they could recapture the islands from the Japanese, they would separate the Imperial military from critical supply lines.

The naval and air combat featured four fronts from October 23rd, through the 26th. 

Some of the U.S. battleships engaged in the action were survivors of the Pearl Harbor attack. This time, in open water, the U.S. navy and air power proved superior.  

BROUGHT TO ACTION: There was no place in the Philippine Sea this day where they could hide from the most devastating attack launched in the Pacific.  

The Imperial Japanese Navy lost 26 warships during the Battle of Leyte Gulf—its greatest loss of the war. Many that survived the engagement were either sunk during retreat or later while awaiting repairs in Japanese harbors. 

And finally, October 20th, 1973, in Sydney, Australia:

ELIZABETH: I join with you Mr. Premier in paying tribute to the many people…

Queen Elizabeth the Second tightly clutches her notes and skirt during the blustery opening ceremonies of one of the most distinctive buildings in all the world. 

ELIZABETH: I have much pleasure in declaring the Sydney Opera House, open. [APPLAUSE]

Thirty-four years after its opening, the United Nations added the Sydney Opera House to its World Heritage list of culturally significant sites. It is currently undergoing a multi-year improvement project. The $228 million price-tag includes improved accessibility, equipment upgrades, and much-needed acoustic treatment.

That’s this week’s WORLD Radio History Book. I’m Paul Butler.

(Photo/Getty Images)

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