Once in Golconda: A True Drama of Wall Street 1920-1938

by John Brooks

Once in Golconda "In this book, John Brooks-who was one of the most elegant of all business writers-perfectly catches the flavor of one of history's best-known financial the 1929 crash and its aftershocks. It's packed with parallels and parables for the modern reader." -From the Foreword by Richard Lambert Editor-in-Chief, The Financial Times Once in Golconda is a dramatic chronicle of the breathtaking rise, devastating fall, and painstaking rebirth of Wall Street in the years between the wars. Focusing on the lives and fortunes of some of the era's most memorable traders, bankers, boosters, and frauds, John Brooks brings to vivid life all the ruthlessness, greed, and reckless euphoria of the '20s bull market, the desperation of the days leading up to the crash of '29, and the bitterness of the years that followed. Praise for Once in Golconda "A fast-moving, sophisticated account.embracing the stock-market boom of the twenties, the crash of 1929, the Depression, and the coming of the New Deal. Its leitmotif is the truly tragic personal history of Richard Whitney, the aristocrat Morgan broker and head of the Stock Exchange, who ended up in Sing Sing." -Edmund Wilson, writing in the New Yorker "As Mr. Brooks tells this tale of dishonor, desperation, and the fall of the mighty, it takes on overtones of Greek tragedy, a king brought down by pride. Whitney's sordid history has been told before..But in Mr. Brooks's hands, the drama becomes freshly shocking." -Wall Street Journal "It's all there in Once in Golconda-the avarice of an era that favored the rich; and the later anguish of myriads of speculators doomed by a bloated market, easy credit, and their own cupidity and stupidity." -Saturday Review

Genres: History, Finance, Business, Nonfiction, Economics, American History, Personal Finance

320 pages, Paperback

First published January 1, 1972

About the author

John Brooks (1920–1993) was an award-winning writer best known for his contributions to the New Yorker as a financial journalist. He was also the author of ten nonfiction books on business and finance, a number of which were critically acclaimed works examining Wall Street and the corporate world. His books Once inGolconda, The Go-Go Years, and Business Adventures have endured as classics. Although he is remembered primarily for his writings on financial topics, Brooks published three novels and wrote book reviews for Harper’s Magazine and the New York Times Book Review.

Reviews

[Stefan · Rating 2 out of 5]

Everything you didn’t need or want to know about Wall Street between 1920 and 1938.

[Joel Gray · Rating 3 out of 5]

GOLCONDA WAS, ACCORDING TO LEGEND, A CITY IN INDIA IN WHICH EVERYONE WHO ENTERED IT BECAME RICH (LIKE WALL ST IN THE 1920S)

In the fall of 1921 the post war depression ended and a new and more durable boom replaced it.

The Fed reduced the discount rate from 7% in 21 to 3% by 24. Such a dramatic reduction promoted general expansion, risk-taking, speculation and reckless spending. US Treasury also started reducing corporate tax rates.

Business was aided by the spread of the automobile. In almost most aspects business was good, giving the stockmarket a sound underpinning.

Banks were failing as they had lent to the farmers where price had plummeted and they had no Govt assistance.

The key to success in stock trading was exclusive information.

In 27 the Fed reudced interest rates, rather than increasing them to reign in margin lending (where they only put down 10-20%). They increased rates in 28 but it was too late - who cared if the margin loan rate went from 8% to 12% if a man could make 100% in a month!?

Banks were able to lend from the Fed at 5% and loan it out via margin loans at 12%. In 29 the margin rate went as high as 20% and settled at 15%.

Sep 3 1929 was the high of the market which would endure for 25 years.

By 32 unemployment was at 25%, industrial production was half of its 29 high, industrial stocks were down 80% and there were big foreign withdrawals of gold.

In 31 the stock exchange adopted a rule forbidding short sales in stocks that were already on the way down (stands today).

In 32 there was a run on the banks. Roosevelt enforced an 8 day bank holiday at one point. The market was closed over this period as well but rose 15% the day after it reopened.

Roosevelt forced investment banks and trading banks to separate. The House of Morgan chose to be a trading bank. Morgan got 50% of the firms profits and the other partners 50%.

Roosevelt attempted to stoke inflation for farmers by removing the US$ peg to gold. Reversed it in 34 when inflation didnt respond dut to a lower US$.

Repeal of prohibition in 33.

[Brad Gillespie · Rating 5 out of 5]

If you're a professional investor or just working with your retirement accounts, history can be key to better results. This audiobook or book clarified the 1920s and 30s and helped me understand current regulations based on how they came about. Warren Buffett had this book on his recommended list at this year's Berkshire Hathaway annual meeting.


https://mobile.audible.com/search.htm...

[Nightwitch · Rating 5 out of 5]

I was surprised by how intensely readable this was. Definitely popularized rather than scholarly - a really easy, informative read.

[Vineet Khanna · Rating 5 out of 5]

Very informative



The book has aptly portrayed the prequel ans sequel to the 1929 Crash and is as valid today as it was when it was written.

[Dominik · Rating 2 out of 5]

This is not an investment book. It is a depiction of events happening between 1920 and 1940 from the perspective of Wall Street.
If you are looking for info on how assets were behaving during the great depression and how to prepare for such events in the future, this book is not for you.
However, if you are interested in how the Roosevelt administration changed Wall Street from a "Gentlemen's club" into a "Regulated Market", this is just what you are looking for.
The book could be helped by stories on how "market operators" were scamming the public, how "big money" groups were manipulating the market and how the ancestors of r/wallstreetbets thrived during the crazy bull market of 1920's. Unfortunately, those really interesting stories didn't get much attention from the author.

[Dan Zwirn · Rating 4 out of 5]

Brooks’ book puts the reader into the middle of the tumult of the 1920s buildup to the 1929 crash and its the terrible aftermath in the 1930s. It features the stories and quirks of a number of most high profile financial and government figures of the era and, above all, reminds us once again that there is ‘nothing new under the sun’ when it comes to the cyclical nature of the financial markets. This is an excellent book to accompany our current experience of the slow-moving train wreck that is the result of the bursting of the post-GFC ‘Everything Bubble’.

[Balloon Bruce · Rating 1 out of 5]

Dull.

[Matt · Rating 4 out of 5]

Great history

Some tedious parts to it but overall John Brooks gives you a great inside look at the times. Worth reading

[AG · Rating 5 out of 5]

Good insight into what occurred leading up to the market declines of 1929.

[Maheswari · Rating 4 out of 5]

Good to understand the speculative and wild days of Wall Street before Roosevelt era SEC act. Also, revealing to read how class, family and background played a huge partisan role

[George Nassef · Rating 4 out of 5]

A sobering account of what our parents and grandparents survived during the Great Depression. We could learn a few lessons from history.

[Pamela · Rating 3 out of 5]

For those who, like me, are not familiar with Golconda, the title is a reference to a mythological city in India where everyone who passed through it got rich. After reading this, I decided it was a most apropos title. A somewhat different treatment of the stock market crash of 1929, Once in Golconda deals mainly with the men who were involved, both in the build up and the crash. Many of the names are familiar and, even famous or infamous, J.P Morgan and his partner Thomas Lamont, Averill Harriman, Joseph Kennedy, and Richard Whitney. Some are more obscure except in financial circles of the time, James Warburg, Michael J. Meehan, Jesse Lauriston Livermore, and "Sell 'Em" Ben Smith. The government is represented, too, presidents Coolidge, Hoover, and FDR along with Andrew Mellon, Secretary of the Treasury. Mainly, though, the central character here is Richard Whitney. The epitome of American aristocracy, he went from the heights of Wall Street by attempting to stop the 1929 crash by forming a consortium to buy stocks at higher than going rates and then fell to its depths after declaring bankruptcy and being convicted of embezzlement in 1938. He wound up in Sing Sing.

The story serves as both a history lesson and a cautionary tale. John Brooks paints an in-depth picture of these men, who they were, what they did and what part they played in both the biggest up market and the greatest crash in American history.

[KennyO · Rating 4 out of 5]

Here's an account of Wall Street's transformation from the 1920s when the NYSE & al. was a de facto financial club for the wealthy to 1938's populist-leaning market. The narrative centers on Richard Whitney, an Old Guard stalwart who was chosen by his peers to be president of the exchange. Whitney's personal investments, like nearly everyone else's, took a drubbing as the Great Depression followed the Market Crash of 1929 and this work is to a great degree the story of Whitney's ill-considered responses to those setbacks and the denouement that changed the character of American investment forever.

Brooks writes well but has a fixation with vocabulary that's unnecessarily hoity toity. He occasionally drops in words and expressions that seem to have been calculated to make the reader say, "Huh?" "Defalcation" is a favorite of his, often used but tending more to obscure his meaning than to enlighten. He does move the story along, though, and he is clear when describing the people, their backgrounds and positions and their places in the thread of the account. I raised an eyebrow here and there at some of what he wrote WRT conversations but endnotes are substantial for those who are motivated to dig deeper.

You don't need to be a money grubber or serious investor to enjoy this book which is something akin to a low key thriller.

[Peter · Rating 4 out of 5]

There is a lot of talk today about whether various market require further regulation to be safe for investors (hedge funds, mortgage lenders, Sarbanes-Oxley). This book focuses on the market, and particularly the New York Stock Exchange, in the days prior to the Securities Acts that set up, among other things, the SEC. It is enlightening how free-wheeling things were, particularly prior to the market crash in 1929. Stock manipulation was commonly practiced by many market participants, but the benefits accrued to people on the inside. The stock exchange was run like a private club for the benefit and enrichment of its members.

I'm not sure of the author's politics, but there is a certain wistfulness in his description of the decline of the old guard in the mid-1930s and the inception of government regulation. Then, as today, the Republicans preferred loose or no regulation while the more liberal Democrats (led by President Roosevelt) pushed for standards. In the end, the Democrats won. This is a light and fun read for people with interest in history and the stock market.

[RF]

With all the talk of stagflation, recession, etc... figured this might be a timely read...

[Nicole · Rating 4 out of 5]

This gives a great background and insight into how the stock market began. It's a pretty technical book, but good.

[Michael Benidt · Rating 5 out of 5]

A chilling read because the The Twenties and early Thirties are so similar to today's economic troubles. All the more chilling because the book was written in 1969. Fluid writing, captivating.

[Lawrence · Rating 3 out of 5]

An indebt look at what happened and why the Great Depresion occured.

[Stephen · Rating 5 out of 5]

I may even prefer this to Galbraith's "The Great Crash."

[Justin · Rating 3 out of 5]

More memoir than how to

[Karen · Rating 5 out of 5]

I realize I'm naive but this history is truly shocking.