Notes
Abbreviations BL Baker Library Historical Collections, Harvard Business School, Cambridge, Massachusetts GKF George Keith Funston GW George Whitney NARA National Archives and Records Administration, College Park, Maryland NYSEA New York Stock Exchange Archive NYT New York Times OYS Own Your Share PTC Paul T. Cherington RCL Ruddick C. Lawrence RMH Ralph M. Hower RW Richard Whitney TL Truman Library, Independence, Missouri TWL Thomas W. Lamont UIAAC University of Illinois Archives of the Advertising Council WSJ Wall Street Journal INTRODUCTION: Sowing an “Equity Culture” Epigraph. New York: NYSE, 1951, 12. 1. According to a NYSE report, in 1998, 84 million people owned stock in the United States. This statistic represents both direct and indirect stockowners, the latter reflecting institutional holdings. Shareownership 2000 Highlights, NYSEData.com Factbook, 2002, accessed June 6, 2011, www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=text&key =51&category=11. By 2001, 51.9% of U.S. households owned stock, and in 2007, 49.1% owned stock. See Sylvia Allegretto, “The State of America’s Wealth, 2011,” Economic Policy Institute, Briefing Paper no. 292, March 23, 2011, esp. table 7, p. 13. 2. Allegretto, “The State of America’s Wealth,” table 7, p. 13. 3. The top 5% of households in 2007 owned 69.2% of common stock. That figure includes stock owned directly and stock owned indirectly, the latter through mutual funds, trusts, and retirement accounts such as IRAs, Keogh plans, and 401(k) plans. Allegretto, “The State of America’s Wealth,” table 6, p. 11. In terms of the richest 1% of households, in 2007, they held stock holdings, on average, worth $4.2 million (in 2009 dollars) (Allegretto, 15). See also Aaron Notes 178 Notes to Pages 2–3 Brenner, “The Myth of the Shareholder Nation,” New Labor Forum 13, no. 2 (Summer 2004): 20–35, esp. 24. 4. The term “equity culture” comes from B. Mark Smith, The Equity Culture: The Story of the Global Stock Market (New York: Farrar, Straus and Giroux, 2003). Smith does not precisely define the term, but I use the phrase here to encompass the idea of participation and interest in the stock market going mainstream. 5. See, for instance, Adam Shell, “Invest in Stocks? Forget about It,” USA Today, May 8, 2012, 1A, 2A. 6. According to the Investment Company Institute (ICI), equity funds for the four years from 2008 to 2011 experienced net withdrawals each year. Net withdrawals from all types of mutual funds including equity funds totaled $100 billion in 2011. See ICI, 2012 Investment Company Fact Book, 52nd ed., chap. 2, “Recent Mutual Fund Trends,” esp. p. 24, accessed May 14, 2012, www.ici.org/pdf/2012_factbook.pdf. 7. See Edgar L. Smith, Common Stocks as Long Term Investments (New York: Macmillan, 1928). Also see Chelcie Bosland, The Common Stock Theory of Investment: Its Development and Significance (New York: Ronald Press, 1937). 8. The phrase “cult of equity” is widely used. See, for instance, Tony Keller, “The Cult of Equity,” Financial Post Magazine, September 13, 2011, accessed May 15, 2012, http://business .financialpost.com/2011/09/13/the-cult-of-equity/. 9. While other exchanges exist in the United States, in this book, “the Exchange” refers solely to the NYSE. The organization has undergone numerous changes in recent years, and in 2007, the NYSE Group, Inc., and Euronext N.V. combined to form NYSE Euronext. 10. For a discussion of some early twentieth-century criticisms of Wall Street, see Sereno S. Pratt, The Work of Wall Street: An Account of the Functions, Methods and History of the New York Money and Stock Markets (New York: Arno Press, 1975; first published 1903), see esp. 380–94. Also, Thomas Lawson, Frenzied Finance (New York: Greenwood Press, 1968; first published 1905). The rhetoric of “easy” versus “earned” money pervaded the media in the immediate aftermath of the 1929 Crash. See, for instance, Saturday Evening Post, Advertisement, NY Sun, October 25, 1929, 30; “Back to Work,” NYT, October 24, 1929, 38. Reporter Edwin Lefevre noted, “Stock speculation always has seemed the cleanest way of making easy money. It is legalized gambling masquerading as a legitimate business.” Lefevre, “The Little Fellow in Wall Street,” Saturday Evening Post, January 4, 1930, 7. On the notion of “speculation” versus “investing ,” also see Edward Chancellor, Devil Takes the Hindmost: A History of Financial Speculation (New York: Plume, 1999), esp. x–xiii. 11. A common and somewhat justified fear was that insiders often manipulated the market at the expense of outsiders. 12. Frederick Lewis...
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