Stock market of yore

My latest piece for Research magazine, "Character Counts," focused on Richard Whitney, the 1930s forerunner to Bernie Madoff, is now online. Excerpt:

Sometimes heroes are not all they are cracked up to be. Consider the case of Richard Whitney, whom Time magazine labeled “Hero Whitney” for his actions on October 24, 1929, the Black Thursday that marked the beginning of the Great Crash.

On that day, Whitney, principal of his own brokerage firm and acting president of the New York Stock Exchange, walked onto the exchange floor, went to the post where U.S. Steel was traded and in a loud, confident voice placed a large order at $205, some $15 above its offer price. The square-jawed, striding broker then bought up shares of AT&T, Anaconda Copper, General Electric and other blue chips.

Whitney was acting at the behest of a consortium of banks headed by J.P Morgan & Co. The goal was to allay the panic that had broken out in the market, and for a little while it worked. But a few days later, the Crash resumed in earnest, on Black Monday. Unlike in the Panic of 1907, when J.P. Morgan himself had rallied a recovery, the financiers this time around didn’t have enough cash or clout to prevent a collapse.

But that barely begins to explain why Whitney is remembered by history as less than heroic....