Paul Warburg, one of the wise men of American banking, the intellectual father of the Federal Reserve System, kept predicting that it would all end in disaster, issuing his most powerful jeremiad on March 8, 1929: “History, which has a painful way of repeating itself, has taught us that speculative overexpansion invariably ends in over-contraction and distress.” If the “debauch” on the stock market and the “orgies of unrestrained speculations” continued, he warned, the ultimate collapse in stocks would bring about “a general depression involving the entire country.”
