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 1943. 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. Do you remember Oct. 29, 1929?
A. The day itself is not a very meaningful moment in my memory. I was concerned that the market was too strong and that the (Hoover) administration had permitted wild speculation. But then, of course, the market recovered. The day is just an incident in a series of events that led our country to the most ghastly depression, with 25 percent unemployed. That is the period I have vividly in mind.
Q. Did the crash affect you personally?
A. I was not particularly involved in any stocks that were affected because I was not buying on margin. I was investing my capital (he was heir to the Union Pacific Railroad fortune). It went down on paper, but I wasn't selling. There wasn't much use trying to switch (investments) around because it was impossible to sell anything. So I was interested in the national situation rather than my own.
I'd rather not mention the cases of the people I knew (who were wiped out), except for playwright Robert Sherwood, a great person and one of my most intimate personal friends. He lost most of what he had. He had his accounts with Richard Whitney (the president of the New York Stock Exchange who was convicted of using customers' funds to cover his own $2 million losses in the market).
Q. How was your business affected?
A. My brother and I had an international banking and security business (W. A. Harriman & Co.). In 1931 we merged with Brown Brothers because they needed capital. Several years later the president of the International Acceptance Bank came in and said they could no longer buy our paper (bills that were due overseas). We were not affected by it, but it was rather a startling thing to have someone come and say they couldn't buy your bills any more. Yet, because we had plenty of capital we were able to get money from the banks to take care of our requirements. Later the banking and securities business were separated (by the Glass Steagall Act).
I wasn't so fond of Mr. Hoover, He'd been rather cool in our relations with him. He wasn't as forthcoming a human being as Al Smith (the former governor of New York who unsuccessfully opposed him for the presidency in 1928.)
So I was in a mood for something to happen. I remember joining with some of the responsible bankers in Wall Street -- the heads of Citibank. Guaranty Trust and others -- at (financier Bernard) Baruch's house one night to see what could be done. There was a general desire on the part of responsible people to steady the market whereas those who were selling short were taking advantage of it, driving the market down below what was natural and making fortunes.
Q. What was your role as head of the National Recovery Administration?
A. The real period I remember was just before Roosevelt came in in March 1933. The banks were closed; respectable people were selling apples in the streets. At the barber shop you could get a shave for 10 cents and a haircut for a quarter or even less. They'd cut anything. All the service trades were in desperate shape. That was the crisis.
Although Harriman was a family friend of FDR as well as chairman of the Union Pacific), my first relationship with him was to get assistance for the railroads, which were in difficulty. There wasn't any giveaway because it saved the railroads, the community and a great many investors without the government losing any money. Under Roosevelt, for the first time the federal government began to take responsibility for the individual who got into difficulty through no fault of his own. The great thing about the NRA (which he joined in 1934) was that it established minimum wages and gave labor the right to organize. It did its job; the business of the country was stabilized.
I have a vivid memory of standing with (police commissioner) Grover Whalen and the mayor in front of the New York Public Library in the late autumn of 1933.There was a parade up Fifth Avenue. Everybody you knew was walking up the streets. They were cheering and yelling. There was a joy in the air because we were saved from the recession, a relief that occurred when the effect of government intervention took hold and things began to be better.
Wall Street was very anxious to come down to Washington and get help. The banks and the railroads needed assistance. But after they were saved, there was an absolute scorn by Wall Street of Roosevelt. That was entirely due to the fact that Roosevelt changed the control of the government of the nation's finances from Wall Street to Washington. That is why the bankers never forgave him for that. It explains why this personal hatred -- it's not too strong a word, I think -- of Roosevelt got into Wall Street.
I stayed with him because I thought he was doing a great job for our country, although I didn't agree with all his policies. Some of my acquaintances on Wall Street would cross the street rather than shake hands with me. But, you know, I rather enjoyed that.