Customer Reviews

Once in Golconda: A True Drama of Wall Street 1920-1928

5 star:		(8)
4 star:		(3)
3 star:		(1)
2 star:		(1)
1 star:		(0)

 

 

This is a very good book.

The book follows the 1920s and 30s stock market from the corner in Stutz stock (on which only people who were long originally gained) to the demise of the aristocratic Richard Whitney.

It could be fiction except that you see the similarities all around.

The description of 1929 is the best I have read. I wish I was there to see Whitney make the most famous bid in all stock exchange history (10 thousand US Steel at 205). I too would have fallen under his spell. And I too would have been shocked and scandalised by his eventual downfall.

Read this and make your judgement. Are you too taken in by the image of today's high flier? Or are you above that? Some people are. I am not sure I am

If ego is a drug, Richard Whitney was Wall Street's Tony "Scarface" Montana. More than $27 million in debt and trying to conceal bald-faced embezzlement, the broke stockbroker and former New York Stock Exchange president still managed to carry himself with a smug hauteur as he drew up new IOUs.

Approaching one broker with whom he was on a bad footing, Whitney "made no lame effort to ingratiate himself. Rather he announced brusquely that he 'wanted to get this over with quickly'...Then he said he wanted to borrow $250,000 'on my face.'"

He was denied that time, at least, but Whitney's arrogance was rewarded in other instances. When you were one of Wall Street's aristocrats of the 1920s and 1930s, life was like that.

Whitney is the central character in John Brooks' "Once In Golconda," an absorbing, picaresque account of the New York Stock Exchange's painful coming of age during the Jazz Age and Great Depression. Though there are some patterns watchers of today's stock markets may recognize in this account of the Great Crash of 1929 and its aftermath, some things are probably never to be repeated, probably for the best.

Wall Street in 1929 was a plutocratic fiefdom where might meant right and no one was righter than J.P. Morgan & Co., known by many as "23" for its Wall Street address. But the crash brought anger as it took the rest of the national economy down with it, and in time, calls for reform that the stockbroking elite ignored at their peril. Leading the resistance to change was NYSE President Whitney, who showed great bravery on Black Thursday by placing some stabilizing bids but remained inflexible despite growing demands for needful change.

"Once In Golconda" is a financial history anyone can pick up and enjoy. The terminology is not too technical, and Brooks writes with a real zest for the human equation. At the same time, you get a deeper appreciation for the market forces that dictated what happened on the Street; how the market was democratized, first by the influx of middle-class investors before the bubble burst, and then after, by the formation of the Securities And Exchange Commission; and how J.P. Morgan lost its supremacy to new-money upstarts like Merrill Lynch.

Brooks, writing in the late 1960s, clearly favored a closely regulated market, but he avoids coming off shrill by presenting both sides of the argument at all times. Not completely in the New Deal camp, he describes the theory of an early FDR economic adviser as amounting to populist voodoo economics. "To reverse the roles by trying to make gold prices affect commodity prices was like a man in a building lobby trying to move an elevator from floor to floor by pushing the indicator dial from place to place: it wouldn't work, and it could easily end up ruining the whole mechanism."

This is an excellent companion volume to Brooks' other classic, "The Go-Go Years," a contemporary account about the market's rise in the 1960s. It has the same elegant prose, the same attention to nuance and detail, perhaps an even larger-than-life cast of characters, and a wry wit that pierces through even the driest sensibility. Of one fabled stockbroker, he writes: "He published a book explaining his stock-market techniques - a tip-off that they were no longer working for him."

Once in Golconda is a well-written financial history book. The setting is 1920s and 30s Wall Street. The drama centers around Richard Whitney, who falls from grace like the hero in a Greek tragedy. During the '29 crash, Whitney himself (he was president of the NYSE at the time) strode onto the floor of the exchange and bought U.S. Steel (and other blue chips) to temporarily halt the slide. In the aftermath, Whitney literally stole from widows and orphans and was sent to prison. An excellent example of a financial history book that is not dry and unreadable.

Brooks' examination of the pre-crash financial world, and its key players--J.P. Morgan, Jesse Livermore, Richard Whitney among them--is fascinating, as is the overarching story of Whitney's rise and fall. His examination of the Roosevelt era changes to the financial markets in the book's second half is much less so.

In particular, Brooks goes on at excessive length about the Roosevelt administration's policies on economic matters, including a soporific chapter on intervention in the currency markets (and I write as a former economics major).

Too, Brooks style is generally long-winded--as befits a old-time New Yorker scribe--and a bit academic ("So far, we have seen how..."), which makes the book seems a bit dated 40 years on. Still, Once in Golconda is worth reading for its portraits of interesting characters, and the freewheeling, unregulated stock market before the great crash.

"Once In Golconda" is an absorbing narrative about Wall Street and her famous persons and their taciturn to bizarre personalities, trades, techniques (the infamous "pools") and actions.

It is this last point: actions, that makes this narrative is so telling. The Efficient Market Hypothesis and the Capital Asset Pricing Model are narratively defeated in the re-telling of these collected and intertwined tales of (mostly) men taking actions. The actions of these actors are against the tide of humanity, the dispersion of information, and "the market" itself. The collective actions of the hoard that makes up the market are consistently defeated by the single-man of history. But also, the single-man is defeated by the market. This narrative supports the thesis that there is a wide dispersion around the true "value" of traded securities, and those who study history and observe this dispersion can profit from it (beat the market).

This is the story of men great and small (mostly great or infamous) in a time in the history of capitalism when the United States came into prominence and even bootblacks played the market. It shudders on to the catastrophe of the great crash and is absorbing and well-written.

This is an essential book for those who study the history of capital.

If you've closely followed the ups and downs of the stock market, and the downs (and downs) of the reputation of the financial industry, you will deeply enjoy this. Brooks gives great detail and personalizes the crash of 1929, it's aftermath, and the reaction of the investing public. Eerily familiar to much of the tone of the last few years.

Two highlights for me are the passionate defense of short selling by Whitney, and how J.P. Morgan's image was transformed virtually overnight by one very humanizing photograph.

Very good story based around a person named Richard Whitney who was a prominent figure on Wall Street. The book gives pretty good general coverage of the roaring 20's, 1929 crash and the following depression but it mainly focuses on Richard Whitney, his closest friends and other big players and what they all did when the SEC was formed by Roosevelt. I want to say its a great book but the bad thing about it is the way it was written. I have this complaint about another book that i have which was written many years ago also, but this one is worse......using big words i have never heard of, german and french phrases i dont know(except deja vu), rediculously long run-on sentences and sentences that i simply could not figure out what was being said. I recommend this book if you are interested in the formation of the SEC, famous people on Wall Street, the 20's the 30's and Roosevelt.

This book documents exactly how lack of regulation and lack of protection from shortsellers was such a serios contributor to the stock market crash. Unfortunately nobody in the SEC read this book 5 years ago or we won't be in the mess the market/casino is in right now. Shorts like Joe Kennedy targeted specific companies and drove them into the hands of competitors or out of business, sound familiar? A few other reviewers mentioned how there was a massive short squeeze in Stutz stock, the rest of the story is the guy that pulled it off was barred from the exchange because the leaders of the exchange had been short and lost money. 5 or 10 years from now we will find out who was behind this massive transformation of the competitive landscape and don't be surprised if it is the banks/brokers that appear to be the 'survivors' right now.

This book was first published in 1969, but remains particularly topical today, in the world of hedge funds and private equity pools. It's all there-- the stock manipulation, the insider trading, the coordinated bear raids and bull pools, the senseless leverage, the lack of regulatory controls, the laissaiz faire Republican administrations, a terrorist attack, the boundless greed and the ruined reputations. Only, it's the 1920's and '30's. History repeats itself. Brooks' account is meticulously researched and the writing flows very easily. Can you believe a corner in the stock of the Stutz Bearcat Company? It happened with ruinous results for everyone involved.I give it to friends in the financial world for their education and amusement, and also as a cautionary tale.

This book brings the Depression to life. The writing is erudite and the author's decision to tell the story through the life of one individual makes it personal, more than a "dry" history. A time that should not be forgotten, a story that should not be forgotten.