0: March 4th, 1929

2: Washington D.C. The inauguration of Herbert Hoover.

6: "We have reached a higher degree of comfort and security than ever existed before in the history of the world"

11: --says America's 31st president--

13: "Through liberation from widespread poverty,

15: "we have reached a higher degree of individual freedom than ever before".

20: Hoover's campaign had focused on prosperity.

22: Though he had not personally approved it, a local campaign flier had stated that

26: republican policies had put a chicken in every pot, and a car in the backyard.

31: "In no nation are the institutions of progress more advanced.

34: "In no nation are the fruits of accomplishments more secure."

38: "In no nation is the government more worthy of respect, No country more loved by its people."

43: "I have an abiding faith in their capacity, integrity and high purpose."

48: " I have no fears for the future of our country. It is bright with hope."

52: Black Thursday is six months away

56: Intro music [Birth of the People]

62: The month of Hoover's inauguration, one number is on the lips of every trader on Wall Street:

67: 381

69: An all-time high for the Dow Jones Industrial Average.

72: From the outside, the economy looks strong but there are worrying signs.

76: For nine years, the stock market has climbed, increasing six-fold from its level in1921.

81: And the relentless upward trend makes investments look like a sure thing and throughout the second half of the 1920s,

87: more people buy into the market than ever before

90: And not just stock brokers or captains of industry;

92: Factory workers, restaurant owners and even shoeshine boys are all putting money in.

97: One market analyst says the Dow has reached a permanently high plateau

101: Steady gains make investing seem like easy cash.

103: Especially because you don't even need money to get into the market,

107: because stockbrokers at the bank offer loans for investors to buy stock,

111: a practice called "buying on the margin."

113: And the beauty is everybody makes money, with the upward climb of the market,

117: you can put down 10% of a stock's worth,

119: take out a loan from your broker for the rest, and then sell the stock when the value goes up high enough to pay off

125: The loan and net yourself a profit.

126: People mortgage their homes, even their businesses to buy stock, sinking all their savings into it.

131: And why not? It's a sure thing...

134: Unless, there's a margin call, because the stock is actually the collateral for the loan,

139: so if a value of a stock drops, the down payment the investor has provided has essentially shrunk.

144: In that case, the broker who lend the money can ask the investor

148: to immediately provide more money to repay a minimum amount of the loan,

151: and if they can't, the investor then has to sell the stock to cover the loan

155: But investors aren't the only ones borrowing money.

158: Easy loans and installment buying have fueled the economic boom of the 1920s

162: Businesses take out loans to expand,

164: families buy new household goods and home improvements,

167: and Henry Ford offers the Model T in installments,

170: creating a massive boom in Auto Sales,

171: that in turn fuels the American steel glass, petroleum and rubber industries.

176: And most crucially, farms borrow money to mechanize.

179: Pushed to surge crop production during World War One,

182: farmers borrow money to both expand their acreage and by tractors, harvesters and other equipment.

187: The problem is, this new production capacity floods the market with cheap agricultural goods,

192: making it now more difficult for the leveraged farms to make money.

195: In other words, America is stuffed with bad loans.

199: In fact by 1929,

200: the Federal Reserve Bank of New York is so worried about buying on the margin, that they raise the lending rate to discourage borrowing.

207: But this, unfortunately, has a knock-on effect.

209: Central banks in Europe now feel they have to match the new rate,

213: sending many of those nations, still recovering from World War I, into recession.

217: This sudden uncertainty, along with a well-respected analyst saying

221: that they believe the market is overvalued and might crash,

224: trigger a few market shocks in October, but the Dow always recovers its value before the end of the day.

229: Until-

230: October 24th, 1929-

233: Black Thursday.

234: The shouting starts right after the opening bell...

238: (Sell, sell, sell)

240: A Feeding frenzy.

241: No one knows what's happening,

242: but investors sentiment has soured and the panic is infectious.

246: Minutes into the trading day, the market loses 11% of its value.

250: Floor traders shove, scream. So many trades happen so fast,

253: the stock ticker that brings the market real-time to traders across the country can't record the wild fluctuation in price,

260: meaning stock brokers in Chicago and California are trading based on prices that are four hours old.

265: People begin gathering outside on the street, sensing the chaos.

268: Rumors fly around Wall Street, that stockbrokers are committing suicide , leaping from the windows of their buildings.

274: But these reports are false, fed by the death of a German chemist who had really-- though accidentally-- fallen out of a hotel window.

281: However in the panic, the public takes these rumors as gospel.

285: In a back room, several titans of banking meet to try to halt the chaos.

289: There's the head of chase National Bank,

290: the head of Morgan Bank,

292: and the head of National City Bank of New York.

294: These men remembered the last financial Crisis.

297: The panic of 1907, where the market had lost half of its value within three weeks.

301: And the market only steadied when JP Morgan had gathered a consortium of banking friends

306: to make big investments in both the stock market and the banks.

309: They decide to do the same.

312: Between them, they gather a pot of money and hand it to Richard Whitney,

314: vice-president of the New York Stock Exchange

317: He walks onto the trading floor, attracting everyone's attention,

320: and it makes a huge buy of US Steel, offering a price well above what it's currently trading at.

326: Then, he does the same for other major companies, showing his faith in the market.

330: It has the desired effect - the market begins to climb, and at the closing bell,

334: it's only lost six point three eight points, but it isn't over.

338: Though the market has temporarily calmed, that big drop has shaken traders' faith.

343: The margin calls start going out.

346: And all over America: dinner cooks, busboys and farmers,

350: pick up their phone to find out they suddenly owe their brokers money, due immediately.

354: Some amounts are massive; $500, $1,000.

358: Sums that, in 1929, you might not even be able to cover by selling a car or a house,

363: even if you could sell a car or a house that fast.

366: But people most certainly try.

369: October 28th,

370: Black Monday:

371: The opening bell signals pandemonium.

373: Floor traders shout and shove - everyone wants to get out of the market;

377: well, some don't want to, they have to.

379: Selling stocks to repay loans because their clients couldn't pony up enough for the margin call.

384: And everyone wants out, fast.

387: Values are tanking so quickly, that the difference between selling now and selling 30 minutes from now

391: could mean another 10 percent of value loss.

393: And there's such trading volume, that some trades are never even recorded,

397: and by the end of this day, the Dow has lost another 12.82% of its value,

402: and the panic continues.

404: October 29th, Black Tuesday.

407: The market won't stop bleeding.

409: People are getting into fistfights on the trading floor.

411: The problem is that even though everyone is selling,

414: no one's buying.

415: It keeps going down, down, down

418: Shell-shocked floor traders look at each other, trading slips spilling out of their pockets.

422: Some are now so worthless, they leave them on the floor.

425: The market has dropped 23% in two days, and would keep dropping.

430: Another emergency stock purchase by banking consortiums would lead to a one-day boost,

434: and it would even rally the next month.

436: But the Dow entered a steady descent that would not hit bottom until mid 1932, in the depth of the Great Depression.

443: But it's important to remember that the crash and the depression are not the same thing.

447: Historians still argue about how connected they were.

449: In fact the depression proper would not hit until months later,

453: when banks started to fail from bad loans and unemployment rose.

456: Then, as today, it's important to remember that the stock market isn't the same thing as the economy.

461: The Dow Jones recovered faster than the country as a whole.

464: But the crash shook consumer confidence and wiped out the savings of small investors,

469: leading to fewer purchases of items like cars at a time when auto manufacturing was a large part of the American economy.

475: Whether responsible for the depression or not,

477: the 1929 crash would symbolize the start of very hard times.

482: Within a few short years Ford's assembly line ground to a halt, sending unemployment in Detroit to 34%.

488: Half of construction workers were without work.

490: The country watched the US Army deploy tanks and tear gas against a World War one veteran's protests,

496: and great dust storms tore across the plains making its snow red in New England.

501: A decade of disasters: ecological, financial, and deeply personal, all heralded by The Wall Street Crash.

507: And while I'm sure we'll cover the depression in more detail someday,

511: for now, it is good to remember that as hard as those times were, we got through them.

516: It took perseverance and cooperation,

518: but we did recover, even when things looked dark, we came back.

522: Until next time stay safe everyone

525: Legendary thanks to Ahmed Zayat Turk, Alicia Bramble, Casey Mishka, Dominic Valenciana Gunnar Clovis, Kayo Murgatroyd