Henry Winston was just another average Joe. There was absolutely nothing significant or special about him. He had a wife, Mary Anne, two kids, Jeremy and Lisa, and a cat named Tiger. He lived in a simple two story house just outside the city. He worked as a car salesman in the adjacent big city, New York, earning a steady income. Little did he know that he would almost single handedly force the stock market crash of 1929 upon the United States, plunging the economy to a record breaking low, and ultimately cost the United States billions of dollars over the next half decade.
Now you might be wondering, “Hey Mr. Narrator, how could one man possibly cause the Stock Market Crash of 1929?” Well fine sir, I’ll tell you how it all went down, step by step, piece by piece, and detail by detail.
It all started back on August fifth of 1929, when our dear friend, Henry Winston, first learned about buying stocks on margin. He had just clocked out of his job at six o'clock p.m, just like everyday, but he decided to take a different route home. He walked up South Blvd. instead of crossing over onto Lancaster Ln. to the bank up the road. He thought that he was just going to make a small withdrawal from his savings, but when he got to the bank, there was a very long line with about fifty-sixty people in it.
Henry approached the back of the line, and asked the man in front of him, “what’s with this line?” The man responded, “right now, you can buy stocks on margin, which means you borrow 90% of the cost of the share from the bank, and pay them back later when you earn tons of money!” This grabbed Henry’s attention. He had considered buying shares in the past, but always decided against it because he would rather invest his money in something more worthwhile, like new clothes and such. This “buying on margin” offer started having him rethink things, since the stock market was doing so well lately.
After about twentyfive minutes, Henry withdrew his forty dollars, and then withdrew another fifty to buy a few shares in Coca Cola, his favorite soft drink. He only had to pay fifty dollars for five shares even though the original share price was one hundred dollars.
Now you might be wondering, “Hey Mr. Narrator, how did his purchase of stock on that day eventually cause the Stock Market Crash of 1929?” Well fine sir, I’ll tell you how it all went down, step by step, piece by piece, and detail by detail.
Now fast forward to October twenty ninth of that same year, our dear friend, Henry Winston was sitting in his living room, eating a slice of wheat toast with homemade strawberry jam and reading the newspaper, when something caught his eye. Tiger, the house cat was stuck about thirty feet up in the tree in the front yard. Henry ran outside in his bathrobe, and realized that cat was not going to come down on its own. He was just about to call the fire department, when his ten year old son, Jeremy approached him and said, “I’ll rescue Tiger Dad. I’m a great climber.” Before Henry could react, Jeremy was already halfway up the tree. He ignored his father’s orders to come back down until he reached the cat (he was clearly a very disobedient child).
Now as you may know, it is very difficult to climb with only one arm. Jeremy was carrying Tiger with his left arm, and only made it down five feet when it happened. As you may have guessed, he fell twentyfive feet, breaking both his legs in the process. Henry, enraged, ran over to him, picked him up, and threw him in the backseat of the car, while the cat walked away unscathed.
Now you might be wondering, “Hey Mr. Narrator, what does some kid breaking his legs have anything to do with the Stock Market Crash of 1929?” Well fine sir, I’ll tell you how it had everything to do with the Crash, step by step, piece by piece, and detail by detail.
After about ten minutes of driving, our dear friend Henry Winston realized he had rushed out the door so fast that he forgot his wallet. He couldn’t turn back now, being more than three quarters of the way to the hospital, but he needed some immediate cash to pay for his son’s surgery. He also didn’t have time to wait for the bank to withdraw him some money, because that might take up to eight minutes, which was eight minutes longer that his son is screaming in agony, paralyzed with pain. Then he remembered something. Three of his five Coca Cola shares were kept in his glove box in case he needed them for something. Henry decided that now was that time that he needed them for. He arrived at the bank, stopped the car, ran inside, sold his three Coca Cola shares for three hundred dollars, and ran back to the car in no more than two minutes. He then drove four more blocks to the hospital, carried his son to the E.R, and payed for his surgery. Little did he know, his actions would ultimately cause the Great Depression.
Almost immediately after our dear friend sold his shares, people who saw him got got suspicious. From their point of view, the saw a worried and frightened looking man run into the bank in his bathrobe, frantically sell his shares, and drive away hastily without any evidence of his intentions. One witness, George McDonald, saw Henry Winston sell his shares, and thought to himself, “If this man frantically sells his shares when the stock market is doing so well, he must know something that I don’t. He must know that the value of his stocks are going to go down soon, so mine probably will too. I should follow his lead and sell all of my shares before it is too late.” George then promptly walked into the bank, sold his shares for much more than he bought them for, and walked away, unsure of what his decision will bring, but content none the less.
It just all went downhill from there. Everyone who saw Henry and/or George were thinking the same thing that George thought when he saw Henry. Soon, there was no neat single file line leading into the front doors of the bank. Instead, there was a great mass, a pile, if you will, of shareholders desperately trying to sell their shares, most still not exactly sure why they want to sell them. Eventually, everyone in the vicinity could see and hear what was going on, leading to an exponential increase in the size of the “riot”. Since the bank sold the shares originally for one tenth of the actual price, the bank ran out of money to buy back shares after only three hours. At this point, every single unsold share is worth virtually nothing as the crisis in New York spreads nationwide. This day will go down in history as “Black Tuesday”, costing the United States 30 billion dollars in money that the banks didn’t have.
In the end, Jeremy’s legs would heal. However, Henry would lose his job, and his daughter in the next ten years. He got laid off because his boss couldn’t pay him, and Lisa would die to malnourishment, as the Winston family couldn’t afford much fresh food when they had to pay for heat and water for their house. This is how many peoples live were in that time, and it wasn’t until FDR’s “New Deal” when things started to take a turn for the better. By the end of World War Two, the economy was back to normal, but no one will forget the unforgiving time period that was “The Great Depression.”