Sunday, September 26News That Matters

Looking Back at the First Roaring Twenties

In The New York Times on New Year’s Day 1929, 10 months before the crash, the financial editor Alexander Dana Noyes wrote both of “the most reckless stock speculation” and of a series of “exceedingly favorable” factors protecting the economy: a “sound banking system,” “expanding production and consumption,” “large profits,” “stability of prices,” “conservative methods of trade,” “labor’s high wages” and “increasing exports.”

As stocks rose, people who had little knowledge of the market blithely bought shares for the first time, as Eunice Fuller Barnard described in “Ladies of the Ticker,” a firsthand account in April 1929.

Recently, there has been a parallel rise in trades by inexperienced retail investors.

Early in the 1920s, people played the market as a grand game, abetted by technological innovation and new mass media.

In 1923 the Trans-Lux company came out with the “movie ticker” — a large illuminated screen showing rapidly changing stock prices. For the first time, a crowd at a retail brokerage could watch together as a facsimile of the stock ticker tape whizzed by in bright light.

And they heard about the stock market on the radio, the hot new technology of that era. Westinghouse, in Pittsburgh, created one of the world’s first commercial radio stations, KDKA, which broadcast Warren G. Harding’s victory in the presidential election on Nov. 2, 1920. Sports events, comedy shows and stock market reports soon followed, and radio stations spread throughout the United States and the world.

The world entered homes electronically, giving people an immediate sense of the possibility of new technologies and access to a global narrative about financial success.

What is startling, in retrospect, is that while there was plenty of discussion of the brave new horizons for investing in the 1920s, there was very little skeptical scrutiny of the underpinnings of the markets available in mass media, at least at first.