Years ago, in the immediate aftermath of the 2008 banking disaster, I first heard of Ferdinand Pecora, the lawyer that led the Senate investigations into the shady dealings that brought on the 1929 crash and the Great Depression, and the book he wrote about that experience, “Wall Street Under Oath: the story of our modern money changers”. Pecora’s name popped up in another book I read recently, “Striptease: the untold history of the girlie show”, he was the New York prosecutor sent after the Minsky brothers. I tried to find a copy of this book when I first heard of it, I like to own the books I read, but I only found two copies and they were offered at $500 each. Even though it was reissued in 1973 no other copies turned up. With the “Great Recession” stirring interest in the banking wrongdoings I would have expected that every dusty copy sitting on a shelf somewhere would come on the market. It did not happen so when I was reminded of Pecora and went looking again I compromised and, with a friend in a university and interlibrary loans I managed to get a copy.
Trial lawyers seem to be good writers. Pecora is no exception. The introduction is a little stuffy but it still floored me. Here are the first three short paragraphs.
“Under the surface of the governmental regulation of the securities market, the same forces that produce the riotous speculative excesses of the “wild bull market” of 1929 still give evidences of their existence and influence. Though repressed for the present, it cannot be doubted that given a suitable opportunity they would spring back into pernicious activity.
Frequently we are told that this regulation has been throttling the country’s prosperity. Bitterly hostile was Wall Street to the enactment of the regulatory legislation. it now looks forward to the day when it shall, as it hopes, resume the reins of its former power.
That its leaders are imminently fitted to guide our nation, and that they would make a much better job of it than any other body of men, Wall Street does not for a moment doubt. Indeed, if you now hearken to the oracles of The Street, you will hear now and then that the money-changers have been much maligned. You will be told that the whole group of high-minded men, innocent of social or economic wrongdoing, were expelled from the temple because of the excesses of a few. You will be assured that they had nothing to do with the misfortunes that overtook the country in 1929-1933; that they were simply scapegoats, sacrificed on the altar of unreasonable public opinion to satisfy the wrath of a howling mob blindly seeking victims.”
Pecora organizes the book according to the nature of the “crimes”. I use the quotes because although some of the practices were not technically illegal they are definitely a violation of any fiduciary responsibility the bank officers had to their customers and stockholders. Almost ninety years later the amount of money they mercilessly extracted from the trusting public is still staggering. Even more impressive than the amount of money is the arrogance of the bankes. Pecora illustrates this with a nice selection of transcripts from the testimony bankers gave under oath. If we are to believe that they were as ignorant of basic banking practices and of what was going on around them then we have to believe it was God’s work that they made so much money when the nation went broke.
The only thing that bothered me about the book had to do with the passage of time since it was written. When Pecora wrote that it was unnecessary to detail a person’s story because it was in the headlines for the last few years I wanted pull him out of his grave and tell him that I never heard of the guy. I needed to know details of the story. Since I could never get it from Pecora now I have another bit of research to distract myself with.
The official report from the investigations are online at
It is much dryer than Pecora’s book but so much easier to find.