Donald Ritchie, the historian of the United States Senate, was unfailingly generous with both his time and his expertise and graciously agreed to read my manuscript. I want to thank all my colleagues at St. John’s, but particularly John Barrett, Christopher Borgen, Vincent DiLorenzo, Luca Melachiona, Keith Sharfman, Michael Simons, and Peggy Turano, who were good sounding boards or who read some or all of the manuscript. Ron and Suzanne Saldarini willingly read very early drafts of several chapters. The comments and suggestions of all these individuals were insightful, and they made the book stronger.
I feel incredibly fortunate that Ann Godoff and Laura Stickney were interested in this project for Penguin Press. It took a leap of faith for them to believe that someone who spent the better part of his career writing inaccessible academic prose about something as arcane as securities regulation could have something to say to a general audience, and I thank them for their willingness to publish the book, for their constant encouragement, and for their many helpful suggestions, all of which improved the book. I could not have asked for a better editorial team. Many thanks also go to my agent, Victoria Sanders, and her staff, and my lawyer, Joseph Gagliano, for guiding me so expertly through the unfamiliar terrain of book publishing. I also got great advice on the publishing world from my friend and publicist Jennifer Richards and her husband, Jamey Ballot.
Last, but most important, thanks go to my wife, Shelley, and my two boys, Joe and John. It is somewhat trite to say that when you write a book it is hardest on your family. That doesn’t make it any less true. They all showed infinite humor when I regaled them at dinner with the minutiae of Pecora’s life, and infinite patience when I would disappear to my office or on one of my frequent jaunts to some library or archive. Shelley was always there to read drafts and to offer her sage advice. She also knew just how to keep me focused when I tried to make the process way too complex and difficult. I could not have written this book without her and the boys. Thank you.
NOTES
ABBREVIATIOGS
Introduction
1 NYT, March 5, 1933; Conrad Black, Franklin Delano Roosevelt: Champion of Freedom (New York: Public Affairs, 2003), 269; Stanley Lebergott, Americans, An Economic Record (New York: W.W. Norton, 1984), 447; Amity Shlaes, The Forgotten Man: A New History of the Great Depression (New York: HarperCollins, 2007), 144; Edmund Wilson, Travels in Two Democracies (New York: Harcourt, Brace and Company, 1936), 43.
2 NYT, March 5, 1933; Drew Pearson and Robert S. Allen, “Washington Merry-Go-Round,” United Feature Syndicate, December 16, 1932; Wilson, Travels in Two Democracies, 43; Dixon Wecter, The Age of the Great Depression, 1929-1941 (New York: Macmillan Co., 1948), 25- 40; T. H. Watkins, The Great Depression: America in the 1930s (Boston: Little, Brown, 1993), 98-107; Donald A. Ritchie, Electing FDR: The New Deal Campaign of 1932 (Lawrence, KS: University Press of Kansas, 2007), 116-120.
3 NYT, March 5, 1933; Davis W. Houck, FDR and Fear Itself: The First Inaugural Address (College Station, TX: Texas A&M University Press, 2002), 64-65, 73.
4 Houck, FDR and Fear Itself, 107.
5 Ferdinand Pecora, Wall Street under Oath: The Story of Our Modern Money Changers (New York: Simon & Schuster, 1939), 3-4.
6 John Brooks, Once in Golconda: A True Drama of Wall Street, 1920-1938 (New York: John Wiley & Sons, 1969), 191; Raymond Moley, After Seven Years (New York: Harper & Brothers, 1939), 177; Joab H. Banton, “Ferdinand Pecora,” U.S. Law Review 67 (1933): 302-306.
7 D. B. Hardeman and Donald C. Bacon, Rayburn: A Biography (Austin, TX: Texas Monthly Press, 1987), 152; Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (New York: Aspen Publishers, 3rd edition, 2003), 2; POH, 876; Reminiscences of James McCauley Landis (1964), in Oral History Collection of Columbia University, 199. The hearings are so unknown today that the appellation “Pecora Hearings” led one modern writer to assume that they were the handiwork of “Senator Ferdinand Pecora.” Donald Warren, Radio Priest, Charles Coughlin, the Father of Hate Radio (New York: Free Press, 1996), 56.
Chapter 1. The Well-Driller and Wall Street
1 Peter Norbeck to D. C. Wallace, November 15, 1932, Norbeck Papers, Box 113, Folder 2; Donald A. Ritchie, Electing FDR: The New Deal Campaign of 1932 (Lawrence, KS: University Press of Kansas, 2007), 38, 223-224; Gilbert C. Fite, Peter Norbeck: Prairie Statesman (Pierre, SD: South Dakota Historical Society Press, 2005), 152-153.
2 NYT, November 21, 1932; John T. Flynn, “The Marines Land in Wall Street,” Harper’s, July 1934: 149-155.
3 Peter Norbeck to Theo. J. P. Giedt, July 9, 1932, Norbeck Papers, Box 140, Folder 4; Peter Norbeck to W. R. Ronald, July 11, 1932, Norbeck Papers, Box 105, Folder 13; Fite, Peter Norbeck: Prairie Statesman, 167, 186-188; John E. Miller, “Restrained, Respectable Radicals: The South Dakota Farm Holiday,” Agricultural History 59 (January 1985): 429-447; Herbert H. Schell, History of South Dakota (Lincoln, NE: University of Nebraska Press, 2nd edition, 1968), 282- 288; Jonathan Alter, The Defining Moment: FDR’s Hundred Days and the Triumph of Hope (New York: Simon & Schuster, 2006), 149.
4 Ray Tucker, “Those Sons of the Wild Jackasses,” The North American Review 229 (February 1930): 231-239.
5 Fite, Peter Norbeck: Prairie Statesman, 153; Ray Tucker, “Those Sons of the Wild Jackasses,” 231-239.
6 Fite, Peter Norbeck: Prairie Statesman, 43.
7 Schell, History of South Dakota, 278-281.
8 Fite, Peter Norbeck: Prairie Statesman, 170-171; Susan Estabrook Kennedy, “Glass, Carter,” American National Biography Online, http://www.anb.org/articles/06/06-00218.html; NYT, May 29, 1946.
9 Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (New York: Aspen Publishers, 3rd edition, 2003), 8-9; Ritchie, Electing FDR, 168; NYT, October 16, 1930; Ralph F. de Bedts, The New Deal’s SEC: The Formative Years (New York: Columbia University Press, 1964), 15.
10 Senator Thomas Connally of Texas, 75th Cong., 1st sess., Congressional Record (February 29, 1932), 76, pt. 5:4912.
11 Herbert Hoover, Memoirs: Great Depression (New York: Macmillan Co., 1951-52), 16-17; William R. Perkins, “Short Selling: A Reply to the Address of Richard Whitney,” October 16, 1931, NYSE Archives; NYT, October 15, 1930.
12 Seligman, The Transformation of Wall Street, 11-12; de Bedts, The New Deal’s SEC, 16; Donald A. Ritchie, “The Pecora Wall Street Expose 1934,” in Congress Investigates: A Documented History, 1792-1974, ed. Arthur M. Schlesinger Jr. and Roger Bruns (New York: Chelsea House Publishers, 1975), 2558; NYT, October 16, 1930.
13 Washington Post, March 2, 1932; Time, March 14, 1932; Drew Pearson and Robert S. Allen, “Washington Merry-Go-Round,” United Feature Syndicate, March 13, 1933; Drew Pearson and Robert S. Allen, More Merry-Go-Round (New York: Liveright, Inc., 1932), 320-323, 352-357.
14 Peter Norbeck to James Stewart, April 18, 1932, Norbeck Papers, Box 111, Folder 6; NYT, March 5, 1932.
15 Peter Norbeck to George W. Pennington, January 26, 1933, Norbeck Papers, Box 2, Folder 2; NYT, June 25, 1932.
16 Forrest McDonald, Insull (Chicago: University of Chicago Press, 1962), vii; Hiram W. Johnson to Peter Norbeck, September 22, 1932, Norbeck Papers, Box 112, Folder 1; W. Harry King to Peter Norbeck, September 29, 1932, Norbeck Papers, Box 101, Folder 7.
17 McDonald, Insull, 309-313; Peter Norbeck to W. Harry King, October 3, 1932, Norbeck Papers, Box 101, Folder 7.
18 Undated memorandum to Peter Norbeck re William Gray, Norbeck Papers, Box 2, Folder 4; NYT, November 18, 1932.
19 Ritchie, Electing Roosevelt, 124; Eugene Nelson White, The Regulation and Reform of the American Banking System, 1900-1929 (Princeton, NJ: Princeton University Press, 1983), 14-23.
20 Frederic Walcott to Herbert Hoover, August 5, 1932, Walcott Papers, Box 8; Reminiscences of Eugene Meyer (1953), in Oral History Collection of Columbia University, 684-685.
21 Susan Estabrook Kennedy, The Ba
nking Crisis of 1933 (Lexington, KY: University Press of Kentucky, 1973), 50-53, 67-74, 212; Richard H. K. Vietor, “Regulation-Defined Financial Markets: Fragmentation and Integration in Financial Services,” in Wall Street and Regulation, ed. Samuel L. Hayes (Boston: Harvard Business School Press, 1987), 17-18; Rixey Smith and Norman Beasley, Carter Glass: A Biography (New York: Longmans, Green and Co., 1939), 182, 301; Ritchie, Electing FDR, 124; Francis H. Sisson, “Men, Not Laws, Make Sound Banks,” Nation’s Business 21 (January 1933): 13.
22 Fite, Peter Norbeck: Prairie Statesman, 179; Peter Norbeck to E. E. Gelheus, December 31, 1932, Norbeck Papers, Box 140, Folder 4.
Chapter 2. The Best Cross-Examiner in New York
1 POH, 1-2, 6-8, 18, 31; Erik Amfitheatrof, The Children of Columbus: An Informal History of Italians in the New World (Boston: Little, Brown, 1973), 137-157; NYT, July 29, 1875; George Ripley and Charles A. Dana, American Cyclopaedia: A Popular Dictionary of General Knowledge, vol. 11 (New York: D. Appleton and Co., 1875), 644-649; Constantine M. Pannunzio, The Soul of an Immigrant (New York: Macmillan Co., 1921), 134.
2 Salvatore J. LaGumina, New York at Mid-Century (Westport, CT: Greenwood Press, 1992), 41; Ira A. Glazier and P. William Filby, eds., Italians to America: Lists of Passengers Arriving at U.S. Ports, 1880-1899, vol. 2 (Wilmington, DE: Scholarly Resources Inc., 1992), 180, 183.
3 Robert H. Wiebe, The Search for Order, 1877-1920 (New York: Hill and Wang, 1967); Beverly Gage, The Day Wall Street Exploded: A Story of America in Its First Age of Terror (New York: Oxford University Press, 2009); James Green, Death in the Haymarket: A Story of Chicago, the First Labor Movement and the Bombing That Divided Gilded Age America (New York: Pantheon Books, 2006).
4 John Higham, Strangers in the Land: Pattern of American Nativism, 1860-1925 (New Brunswick, NJ: Rutgers University Press, 1983), 55.
5 Higham, Strangers in the Land, 55; NYT, March 5, 1882.
6 NYT, March 5, 1882; Jacob A. Riis, How the Other Half Lives: Studies Among the Tenements of New York (New York: Charles Scribner’s Sons, 1890), 48-54; Higham, Strangers in the Land, 90.
7 Thomas Kessner, The Golden Door: Italian and Jewish Immigrant Mobility in New York City 1880-1915 (New York: Oxford University Press, 1977), 8; Philip Cannistraro and Gerald Meyer, The Lost World of Italian American Radicalism: Politics, Labor, and Culture (Westport, CT: Praeger, 2003), 6; Higham, Strangers in the Land, 160.
8 Jerre Mangione and Ben Morreale, La Storia: Five Centuries of the Italian American Experience (New York: HarperCollins, 1992), 200-213; Higham, Strangers in the Land, 90-91; NYT, March 16, 1891.
9 POH, 6-7, 31-32; Cannistraro and Meyer, The Lost World of Italian American Radicalism, 12; Donna R. Gabaccia, From Sicily to Elizabeth Street: Housing and Social Change Among Italian Immigrants (Albany, NY: State University of New York Press, 1984), 54.
10 POH, 5.
11 Ferdinand Pecora, “Untitled,” in I Am an American, ed. Robert S. Benjamin (Freeport, NY: Books for Libraries Press, 1970), 101-106.
12 POH, 5-6; Nancy Foner, From Ellis Island to JFK: New York’s Two Great Waves of Immigration (New Haven: Yale University Press, 2002), 206-207.
13 POH, 5, 20-21, 24-25, 30; Kessner, The Golden Door, 14.
14 Charity Organization Society of the City of New York, map showing overcrowding of the buildings on the lots and the consequent lack of light and air space also strongholds of poverty and agencies for betterment in the tenement house district bounded by 22nd Street, 17th Street, 11th Avenue, 6th Avenue (1899), New York Historical Society collection; POH, 12, 29, 53, 94-95.
15 POH, 637.
16 POH, 91-93.
17 POH, 24, 29; Olin Scott Roche, Forty Years of Parish Life and Work (New York: Friebele Press, 1930).
18 POH, 3, 10, 39; NYT, November 3, 1950.
19 POH, 10-13, 34; Roche, Forty Years of Parish Life, 89, 177-178; Reamer Kline, Education for the Common Good: A History of Bard College the First 100 Years, 1860-1960 (Annandale, NY: Bard College, 1982); NYT, June 20, 1896.
20 POH, 13-14,
21 POH, 15-16, 41; Irving Howe and Kenneth Libo, World of Our Fathers: The Journey of the East European Jews to America and the Life They Found and Made (New York: Harcourt Brace Jovanovich, 1976), 158; Leon Stein, ed., Out of the Sweatshop: The Struggle for Industrial Democracy (New York: Quadrangle, 1977), 20-58.
22 Irving Bernstein, The Lean Years: A History of the American Worker, 1920-1933 (Boston: Houghton Mifflin Company, 1960), 263.
23 POH, 84-89; Maureen A. Flanagan, America Reformed: Progressives and Progressivisms, 1890s-1920s (New York: Oxford University Press, 2007).
24 POH, 105-108; Reminiscences of Thomas E. Dewey (1959), in Oral History Collection of Columbia University, 443.
25 J. Joseph Huthmacher, “Charles Evans Hughes and Charles Francis Murphy: The Metamorphosis of Progressivism,” New York History 46 (January 1965): 25-40.
26 Nancy Joan Weiss, Charles Francis Murphy, 1858-1924: Respectability and Responsibility in Tammany Politics (Northampton, MA: Smith College, 1968), 78-85.
27 Reminiscences of Reuben A. Lazarus (1951), in Oral History Collection of Columbia University, 399-403.
28 POH, 122-123.
29 POH, 123-126; John Jones to Peter Norbeck, January 27, 1933, Norbeck Papers, Box 2, Folder 10.
30 POH, 127-140.
31 POH, 140-43a; 441-457, 478-481; NYT, August 23, 1928.
32 POH, 198-254; NYT, August 21, 1921.
33 POH, 290, 359-367, 579-581; NYT, June 8, 1921; NYT, June 11, 1921; Time, June 12, 1933.
34 POH, 313-330; NYT, June 10, 1922.
35 NYT, December 30, 1920; NYT, November 7, 1920; NYT, July 21, 1923; Peter H. Odegard, Pressure Politics: The Story of the Anti-Saloon League (New York: Columbia University Press, 1928), 228-240; K. Austin Kerr, Organized for Prohibition: A New History of the Anti-Saloon League (New Haven: Yale University Press, 1985), 1-11, 121-122; Ron Chernow, Titan: The Life of John D. Rockefeller, Sr. (New York: Vintage Books, 1998), 368; POH, 291-303, 308-312, 335-359, 624-628; Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (New York: Aspen Publishers, 3rd edition, 2003), 21; Reminiscences of William H. Anderson (1950), in Oral History Collection of Columbia University, 61.
36 NYT, February 12, 1929; NYT, July 7, 1929; NYT, August 23, 1929; NYT, November 6, 1929; POH, 275-277, 601-610.
37 NYT, April 12, 1929; POH, 581-594.
38 POH, 273; Weiss, Charles Francis Murphy, 32-33; Warren Moscow, Politics in the Empire State (New York: A.A. Knopf, 1948), 44-45.
39 Time, April 30, 1934; Weiss, Charles Francis Murphy, 125; Alfred Connable and Edward Silberfarb, Tigers of Tammany: Nine Men Who Ran New York (New York: Holt, Reinhart and Winston, 1967), 277-278; Herbert Mitgang, The Man Who Rode the Tammany Tiger: The Life and Times of Judge Samuel Seabury (Philadelphia: J.B. Lippincott Company, 1963), 164-165; POH, 1026-1027.
40 David Von Drehle, Triangle: The Fire That Changed America (New York: Atlantic Monthly Press, 2003), 306; POH, 582, 643.
41 POH, 590-594; NYT, August 9, 1929.
42 NYT, January 1, 1930.
43 POH, 633-635.
44 POH, 619-620, 633-638.
Chapter 3. Sitting on the Lid
1 Peter Norbeck to W. E. Briggs, April 26, 1932, Norbeck Papers, Box 139, Folder 2.
2 Hugo L. Black, “Inside a Senate Investigation,” Harper’s Monthly Magazine 172 (February 1936): 275-86.
3 William H. Harbaugh, Lawyer’s Lawyer: The Life of John W. Davis (New York: Oxford University Press, 1973), 321.
4 NYT, March 7, 1932; NYT, March 9, 1932; NYT, March 10, 1932; NYT, March 12, 1932; Drew Pearson and Robert S. Allen, More Merry-Go-Round (New York: Liveright, Inc., 1932), 355.
5 Donald A. Ritchie, Electing FDR: The New Deal Campaign of 1932 (Lawrence, KS: University Press of Kansas, 2007), 168; Donald A. Ritchie, “The Pecora Wall Street Expose 1934,” in Congress Investigates: A Documented History, 1792-1974, ed
. Arthur M. Schlesinger Jr. and Roger Bruns (New York: Chelsea House Publishers, 1975), 2559; SBCC Minutes, April 8, 1932; NYT, April 9, 1932; NYT, April 10, 1932; Peter Norbeck to J. D. Coon, April 11, 1932, Norbeck Papers, Box 139, Folder 5; Public Papers of Herbert Hoover (Washington, D.C.: U.S. Government Printing Office, 1977), 1175; Pearson and Allen, More Merry-Go-Round, 355-356.
6 John Brooks, Once in Golconda: A True Drama of Wall Street 1920-1938 (New York: John Wiley & Sons, 1969), 61-62, 142; Steve Fraser, Every Man a Speculator (New York: HarperCollins, 2005), 417; Ormonde de Kay, “Debt Before Dishonor: How Richard Whitney Went down the Drain and up the River,” Quest (February 1988): 40-47.
7 Washington Post, April 9, 1932; Joel Seligman, The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance (New York: Aspen Publishers, 3rd edition, 2003), 15; Brooks, Once in Golconda, 142.
8 POH, 662; Ritchie, “The Pecora Wall Street Expose 1934,” 2560; Seligman, The Transformation of Wall Street, 15.
9 Brooks, Once in Golconda, 144.
10 WSJ, April 23, 1932; Tatler and American Sketch, May 1, 1932; P. M. Cushing to Editors, New York Evening Post, May 10, 1932; Gilbert C. Fite, Peter Norbeck: Prairie Statesman (Pierre, SD: South Dakota Historical Society Press, 2005), 176-177.
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