Three distingusihed Washingtonians with first hand recollections of the stock market crash of 1929 and the depression that followed were interviewed by Washington Post Staff Writer Nancy L. Ross.
George M. Ferris, 85, is chairman of Ferris & Co., the firm he founded in 1932. W. Averell Harriman, 87, began his career on Wall Street and has served as a government official since 1934. Catherine Filene Shouse, 83, has been a leader in civic, cultural and political activities for many years, donating Wolf Trap Farm Park for the Performing Arts.
Q. Where were you on Oct. 29, 1929?
A. I was on a trip to Europe and only heard about the carsh when I got back. I had drawn $10,000 extra from my investment account but, as I hadn't needed it after all, I went to my broker's office in Boston to return it. His secretary looked at me with a strange expression that I didn't interpret wisely. Otherwise I would have kept the $10,000 check. Because I had just returned, I didn't realize how much the market had gone down that day and my broker didn't tell me. But the secretary knew the account was in great trouble. When I finally got a statement about two weeks later, it showed I had $9,000 left out of the $999,000 I had before going to Europe.
Q. What happened to the money?
A. My father (Lincoln Filene, founder of Filene's a Boston department store) had given me $250,000 when I was married (in 1921). At first I had a woman broker in Washington (where the couple had settled) and had made a lot of money for myself on my savings. So I was keyed up to make more. It was a human reaction.If you could do this well, you could do better.
I was persuaded by friends in Boston to invest in a Swedish stock recommended by Lee Higginson & Co. (a prominent, conservative brokerage house). So I took all my funds and put them in their care. That was in 1926 or 1927.
i made a lot of money. I bought a beautiful mink coat and had a feeling that the world was endless in depth. My father was not a gambler, and I thought I knew so much more than he did by doing this. Thanks to this investment the account ran up to $999,000.
In the end I was caught not only in the crash but in the swindle of that Swedish match king (Ivan Kreuger) who fooled so many people. He was so clever with his books that people didn't realize what was happening. (Kreuger built a pyramid of match monopolies in Europe based on forged stock certificates. He committed suicide and Lee Higginson went bankrupt.)
Q. What did your father say?
A. I didn't dare tell him. I couldn't tell him because it was my fault; I didn't want to admit my stupidity. I was completely broke.
Q. How dd you live?
It was tough. At the time we were living in Georgetown, but I did want a place in the country for the children. I found Wolf Trap, (a 52-acre farm in nearby Virginia). I think I had a good deal of faith to spend $5,200 out of $9,000 left for Wolf Trap (in 1930). The house was very dilapidated and the land was not built up. A friend with me said, "I think it has possibilities." It was a year before we could live in the house.
Q. Was that your sole investment?
A. Any money I could save, I invested. I still hadn't had enough of the market. I went to a different broker and bought stable things, like General Motors. But all the stable things were hit. When the market hit its bottom in 1932 I was wiped out again. By that time I really was in trouble.
So I asked my father if he could spare me $800 a month to live on. He saw I needed it. I had a child, an adopted child, a governess and a house in Georgetown. We sold eggs and milk to our neighbors. The governess and the children would drive out to the farm and bring the produce in every day. I bought additional acreage whenever I had a little money. And whenever I had $500 I built another little house at Wold Trap. I donated 100 acres to the government in 1966; the remaining 24 acres are worth $20,000 to $30,000 each.
Q. Did you reenter the market after 1932?
A. Yes, I remember buying inexpensive stocks at $2 a share. did it on my own and bought 500 or 1,000 shares of these stocks and did very well. I would watch a stock, read about it and see who was head of the company, find out as much as I could and then buy. I still have some of them.
Q. How did you become interested in investing?
A. When I was five years old I had a 25-cents-a-week allowance. But I had to account for it each week before I got my current week's allowance. And I learned to save. Learnig to save that 25 cents a week has been basic throughout my whole life and in my handling of money.
My father's principle was that if we were old enough to receive money, we were old enough to handle it.He never cautioned us about investments. My father had to forgive me many times.
When I came to Washington after World War I, the family was so displeased, they disowned me for a short time.
I'm not really a good gambler, although I'm interested in gambling in the stock market. But in these last two years I've let wiser heads do it for me.
Q. Could it happen again?
A. I've always hoped it would because I think people have not learned since then to live within their means. During the Roosevelt administration people learned to depend on the government too much. We have never learned to face reality since then or how to tighten our belts. As for advising anyone about the market, I feel they should have to do what my father did: let me learn the hard way.