Bulls Bears the Wars by John Spencer

EVERYONE who passed through the Indian city of Golconda, according to legend, became rich. A similar legend, according to John Brooks, attached to Wall St between the wars.

Golconda is now a ruin, but Wall St, unfortunately, is still very much with us.

Brooks' sharp and often witty history of the New York financial centre is thus of far more than merely historical interest.

With a nice sense of the dramatic, Brooks begins his book with the explosion which shook the heart of Wall St on September 16, 1920, and closes it with Richard Whitney, the Wall St hero, on his way to Sing Sing on April 11, 1938.

Whitney's downfall—he was caught dipping his hand in the till on a gargantuan scale to service debts totalling more than $30 million-marked the end of an era on Wall St.

Even the US. government, devoted to serving the banks and shareholders, was forced to try and curb some of the wilder excesses of the stock market after the 1929 crash.

Crimes

Whitney led the resistance to these moves, until his own fantastic crimes were revealed to a delighted world.

But all this, in 1920, was way in the future. With the end of the First World War, American capitalism found itself with virtually unchallenged supremacy in the world economy.

Europe, devastated by four years of ruthless war, was in ruins, wracked by revolutionary struggles.

Britain, formerly the pre-eminent financial centre world capitalism, was heavily in debt to the United States.

The suspension of gold payments against sterling August 1914, together with the decision to forbid all British investments outside the Empire -both regarded at the time as 'temporary' measures-made it inevitable that in the words of "The Times', 'much of the international business we have been accustomed to do should pass to fa -the United States'.

'By 1920, Brooks says, 'Wall St had the power to do London's old job, with plenty to spare. The United States had changed from $3 billion international debtor to $3 billion international creditor.

The new-found pre-eminence of US capitalism, and thus of its banking and investment centre, found Wall St occupyPROBL DEPARI DIRECTOR.

DERUT ing the City of London's old position without any of its traditions and ingrained conservatism.

For many of the Wall • St magnates, their new mastery of the world was an unparalleled opportunity of exercise their considerable talents for financial trickery.

The artificial hair-line between capitalist 'business' and daylight robbery became increasingly indistinguishable as the world plunder began to roll in and the Wall Streeters set about dividing the spoils.

The explosion with which the book opens marks off the era of Wall St's supremacy from the preceding period in a suitably dramatic fashion.

A truck-full of explosives in the heart of the financial district blew up at a time when the threat of revolution was in the forefront of the financiers' minds.

The explosion, immediately attributed by the press and the Wall St magnates to a 'Red Plot' (though no evidence for such a plot was ever discovered) unleashed a major witch-hunt which lasted on and off for nine years.

Vivid

Brooks paints a vivid picture of the financiers' reaction — like the brigadier-general who told a crowd that the explosion was 'one of the greatest outrages ever committed against society' and announced, to roars of approval that the 'plotters' 'should be killed every time they show their heads'.

Brooks uses the reaction to the explosion to illuminate the attitude of mind of the Wall St magnates-a financial oligarchy who consider they have • God-given right to make money at the expense of the working class.

Uncrowned king Wall St.

RICHARL

WHITNEY knight' wi in Sing Si: million in Chief among them: J. P. Morgan of J. P. Morgan and Co, the leading financial operator and uncrowned king of Wall St. Morgan's frontage at No. 23 Wall St was scarred by the famous 1920 explosion, and apparently bears the scars to this day.

Venom

Brooks describes with considerable venom the 'arrogant and arbitrary' aristocracy of high finance which flowered through the halcyon days of the 1920s, right up to the Great Crash.

He shows how, even at the height of the depression which tollowed the First World war, when millions were out of work and great mass struggles were taking place all over the world, Wall St, continuing its customary business of making money without working, engaged in such 'epic' struggles as the great Stutz Motors bear raid.

And how the winner of the fight against the raid-the company's owner, Allen A. Ryan, was bankrupted by the Stock Exchange Establishment and the banks because he had dared to out-tycoon the tycoons.

Conspicuous wealth, the morality of the gutter and over whelming contempt for the rest of humanity were-and remain-the chief characteristics of the Wall St operators.

Their arrogance, like an orchid on a dunghill, blossomed mightily in the years of the boom before 1929, as Brooks shows very well.

Great Crash The climax of his narrative the event which left its permanent mark on history, is of course, the Great Crash of 1929.

In the long boom which led up to this, the entire Wall St financial community found themselves virtually with a licence to print money.

Share prices, even in the most dubious enterprises (and not a few of the enterprises were more than dubious reached astronomical heights.

For one glorious summer on Wall St it seemed that the process of making profits had become entirely divorced from the process of production.

This dream-world, into which thousands of small investors were drawn and were, as Brooks shows, systematically fleeced by the big banks and brokerage houses, was chiefly characterized by the creation of huge paper values, through the medium of investment trusts and huge issues of new shares, many of which rose to astronomical heights on the share price index without ever paying a dividend.

Spectacular

The collapse, when the bubble was pricked, was just as spectacular as the preceding boom, but the big financiers of the Street were not a whit the worse off.

The crash of 1929 triggered off the slump of the 1930s-a period of prolonged misery for the working class of the entire capitalist world, with unemployment of more than ten millions in the United States alone.

But Brooks' book makes it very clear that while the working class—-and the middle class who were foolish enough to invest in the valueless shares promoted during the boomwere ruined, the profit was all Wall St's.

The patrician bankers, the J. P. Morgans and the Jacob Schiffs (head of Kuhn, Loeb and Co.), not to mention the market operators like Joseph Kennedy, eked out the depression on their meagre millions and found their power greatly increased by it.

The fact that the Roosevelt administration, which ousted Hoover from the presidency in the wave of popular discontent which followed the He tween ernme scapeg and I order class. Ul 617 The crash of 1929 triggered off th of the entire capitalist world. Tor One middle-class investor tries to world capitalist collapse, was forced to give the appearance of taming the more excessive practices of the Stock Exchange made little difference.

Brooks is himself sympathetic to Roosevelt's 'new deal' reformism (though he criticizes Roosevelt for some of his wilder schemes for solving the dollar crisis).

details the struggle beWall St and the governwhich followed the a period when the govit were eager to find oats for the depression illory the financiers in to appease the working Target The chief target, selected from the start even under Hoover, was the Wall St practice of 'short selling', in which speculators borrow shares and sell them • while the • price is high, hoping that a fall in the price will enable them to buy back the same shares more cheaply and thus clear a profit.

The investigations into these speculative practices served a dual function for the US employers.

They distracted attention from the basic cause of the crisis-capitalist private property-and focused it on the technical trickery of Wall St.

They also enabled the government, both under Hoover and under Roosevelt, to appear to be taking firm action against the financiers when in reality they remained themselves fervent devotees of capitalism.