November 2, 2010
In Search of Ferdinand...
1932. The economy was mired in a continuing depression, and the denizens of political office saw its recovery as the key to their fate. An outgoing Republican President cautiously blamed excesses on Wall Street; a successor Democrat elected in hopes of sweeping change was continuously cautioned against overreaching reform. The head of a major railway went so far as to warn the chair of the Senate Banking Committee against Congressional scrutiny of the markets:
The disclosures to date are causing the rank and file out through this country to distrust all banks, the good along with the bad; hoarding is starting in again; withdrawals are becoming very heavy; the whole financial structure seems to be sitting on dynamite. ["Hellhound", p. 214].
Against this backdrop were held the famed Pecora Hearings, the New Deal inquiry both placing financial reform in the popular conscience and laying the groundwork for the federalizing of securities regulation in this country. To fans of financial law, the story of the closing months of the lengthy Senate investigation is epic yet largely undetailed. Hence the import of Michael Perinos' new book, "The Hellhound of Wall Street: How Ferdinand Pecora's Investigation of the Great Crash Forever Changed American Finance." Professor Perino of St. John's Law School succeeds in dramatizing the clash pitting Ferdinand Pecora, the bold former NY prosecutor, against a parade of Wall Street titans in a pivotal ten days of hearings emblematic of the new confrontation between Washington and the securities markets. Along the way, the Professor aptly describes the conflux of personalities, politics and luck that produce any noteworthy historical tale.
The book is a great read and a ready source of historical testimony by Charles E. Mitchell, Richard Whitney, J.P. Morgan, Jr., and others. Kudos to Professor Perino (a former NY litigator himself) for contributing a riveting account of a singular time in the history of business regulation.
November 2, 2010 | Permalink