by Jane Dabel
Black Tuesday is a historical novel set in New York City on the eve of the Great Stock Market Crash of 1929. It traces the story of Leila Kahn, a smart and hardworking Russian immigrant who lives on the Lower East Side of Manhattan in a fifth floor walk up. Against her better judgment, Leila falls for banker Roderick Morgan, who is embroiled in a fraudulent financial deal with his uncle, Jack Morgan. Leila learns the truth about Roderick’s dealings and takes a heroic stance, confronting Wall Street's greed, power, and depravity in a manner that is both timely and inspirational in today's turbulent times.
Black Tuesday eerily mirrors the present. One of the central themes, that the banking system is rigged against the poor, sheds light on what working people thought about Wall Street in the 1920s. In recent weeks, growing numbers of protestors have joined Occupy Wall Street demonstrations all over the country at the same time that other Americans are boycotting new banking fees targeting debit card users. These recent populist uprisings indicate that, unfortunately, not much has changed since the 1920s.
Before her career as a writer and a journalist, author Nomi Prins worked at top Wall Street firms. Prins specializes in whistle-blower books, including It Takes a Pillage, Other People’s Money, and Jacked and has taken it as her duty to expose the shady deals and cozy relationships from Wall Street to Washington. I recently had the opportunity to discuss with Nomi Prins her new novel and she explained how her historical work highlights many contemporary issues.
Is your use of Leila, a Russian immigrant, intended as a subtle critique of American capitalism? Or are you more interested in the challenges facing immigrants during that era?
It was more my desire to depict the real challenges that faced both immigrants and the working poor at the time – and in many ways, today.
A critique of American criminal capitalism, where certain wealthy insiders game and corrupt the system with deadly impact on the rest of the population, lingers throughout the book, but it wasn’t my attempt to use Leila’s Russian heritage as a separate criticism. There was a wondrous sense when immigrants came to the US, throughout the late 1800s and early 1900s, of an amazing America that held unlimited promise for all, a nation that welcomed all equally. Yet, what many found upon arrival was nothing like that.
Leila and her little sister Rachel lived in a dilapidated fifth floor tenement building, sharing a two-room apartment with five people. Their lives are not easy. Yet, they have a synergy that the Park Avenue crowd disdains, or don’t even understand.
There was, and is, an Upstairs/Downstairs world in New York City. Black Tuesday focuses on the stark lifestyle and wealth difference between families, neighborhoods and ethnicities.
How would you characterize the qualities Leila brings to the crisis that were absent in real life? Was it intentional to center the story on a woman?
One of the most interesting things to me about Leila is that she doesn’t start out being some kind of fist-pumping activist. She came to America having survived vicious, violent pogroms in her homeland that killed her father and brother and rendered her mother a shell of her former self. So her initial reaction to her boyfriend Nelson’s more militant style of activism is to shrink away from it.
Her first instinct is to escape from her surroundings, not to advocate changing them. She is lead by her passions and heart, much as any 19-year-old would be at the time, or now. It is only through more awareness as to the non-random reasons for her family, friends and neighbor’s poverty, at the hands of actual crimes committed by Wall Street bank titans, that her inner desire to fight rather than flee emerges, and even that process invokes much emotional duress for her. It does not come easy. It was important for me that the main character live through such an array of emotion.
This is much of the reason I wanted the story to center on a woman - plus the fact that so few stories of the time were female-centric; and even today most of the non-fiction books about finance are written by men, and men run the financial industry.
How does Leila’s activist boyfriend’s distrust of bankers and Wall Street compare to Americans’ views of the banking industry today?
We are seeing more outrage each day with the growing Occupy Wall Street movement. But I think much of the reason there has not been more is that now, as then, Wall Street operates in a cloak of secrecy abetted by national, political policy and powerful relationships between our lawmakers and bankers.
As a country, we are obsessed with money. So on the one hand, we have great disdain for the most powerful bankers and their obvious sense of entitlement and greed; and on another, because it is not entirely clear exactly how they go about making money, a part of us wonders if they aren’t somehow just smarter at it. This notion is propped up by the mainstream media that constantly updates us on how the stock market and corporate profits are doing, a media that deifies Steve Jobs and not ordinary citizen heroes.
It isn’t until we are personally touched by the devastation caused by Wall Street practices, that we question the ‘how’ more. The media still largely claims that the big bank bailouts were necessary. Even President Obama recently stated that though he supports the protestors, we need a strong financial system. Nowhere in those kinds of proclamations is the notion that this financial system is destroying us.
Nelson possesses a strong cynical and rebellious streak. Though he didn’t know all the details of how the bankers were making money into the crash of 1929, he knew that it wasn’t by honest means. He is very certain of the corruption and confident in his ability to change it, through whatever means necessary.
The reference to the Triangle Shirtwaist fire is particularly interesting given the recent hundredth anniversary commemoration. In the aftermath of the fire, city officials and unions insisted on fire safety measures to protect workers. Do you think such activism could happen today?
It was astonishing to me that the men that ran the Triangle Shirtwaist Factory were acquitted of all and any potential wrongdoings. So many people, mostly young women, died because they could not escape the fire, effectively locked into their workspaces. As her Aunt Rosa recounts her escape, it makes Leila’s blood boil that these men weren’t held accountable for the deaths they caused.
In 1912, workers banded together and managed to change certain conditions through demonstrations and strong union leaders. But towards the late 1920s, as the stock market was ‘booming,’ workers again were facing an uphill battle for rights. I think it’s only through visible activism that things change.
Throughout the book, you highlight the concerns of ordinary New Yorkers who feel financially squeezed. Do you see the recent Wall Street protests as a way of modern Americans to protest in a similar fashion?
Yes absolutely, we are now living in times very similar economically to those of the Great Depression. Back then we had national unemployment, as it was measured, at 25 percent. Today, if we consider national underemployment, it’s around 17 percent. Youth unemployment is over 20 percent. Student loan debt is at all time highs where job prospects upon graduation are at lows. As then, nearly one third of the homes in the nation are ‘upside down’ on their mortgages, meaning they owe more than their homes are worth. The protests are a way to draw attention to the wealth inequality that comes with these factors, the fact that banks got bailed out by the government and citizens didn’t, and that both political parties care more about the financial health of Wall Street than of the general population.
One of the most interesting parts of the novel is the courtroom scene where bankers are taken to task for their failures. What do you think about the fact that there have been no legal actions taken towards those behind the financial meltdown?
Thanks for saying that. I loved that scene - the pages nearly wrote themselves! As background, I’m a huge fan of the movie Witness for the Prosecution - the original black and white version. I must have watched that film a dozen times before writing the court scene in Black Tuesday. I also thought it would be interesting to take another view of the Pecora Commission hearings that took place in 1933, four years after the 1929 Crash. Ferdinand Pecora, the former District Attorney upon which the Black Tuesday character Anthony Borteli is based, called up all the major bankers including Morgan Bank’s Jack Morgan and National City Bank's Charles Mitchell, to inquire about their shady dealings. It turned out none of the other bankers were found guilty of major fraud of any kind. That’s the same as the result of the Congressional Panel Investigations and Hearings since the 2008 crisis so far. History does repeat.
In Black Tuesday’s trial, bankers come face to face with the people they defrauded and pillaged. That is something that can only happen in a fiction book. I think it would be really fantastic if such a courtroom situation could occur today.
In “July to August, 1929” you describe everyone around Wall Street talking about getting rich, including “the cabbies that drove bankers to their offices and the bootbacks that polished their shoes.” If you were to re-write the sentence and place it at the eve of the current financial crisis, who were the characters and what were they thinking?
Today, we have so much more access for individuals to invest or ‘bet’ in the market - e-trade, Charles Schwab accounts, and so forth. They never even have to sit down with or see a broker. Additionally, many have 401(k) or pension plans that invest in various stocks and securities for them. In the 1920s, there were things called ‘trusts’ through which people thought they could invest along side the bigger, smarter financiers.
Now, we have MSNBC, CNBC, Fox Business and Jim Kramer touting stocks and how small investors can become rich. During the times between the financial crises – most recently between the Enron and WorldCom frauds of 2001/2002 and the current crises, I think people believed that their stock portfolios or retirement investments, and indeed their homes, were more sound. Now they realize this is not the case.
Then as now, certain Wall Street bankers and the equivalent of today’s hedge and equity fund titans, manipulated the market by having more access to information and the ability to maneuver bigger price swings since they controlled more of the trading volume. It’s the same thing today. Additionally, with programmed trading, the big volume trades cause even more tremendous market movements that hurt the ‘little people’ who don’t know they are coming, or why they might be coming.
You picked the Morgan bank as the epicenter of greed and corruption. Why did you choose this bank to tell the story?
Back then the Morgan bank was a very secret and elitist bank. Partners were handpicked by Jack Morgan (son of JP Morgan). Customer lists weren’t public, nor were many of their deals. Today, JPM Chase, which includes the original Morgan bank, is one of the most powerful banks in the world.
Recently Jamie Dimon, CEO of JPM, said that certain new proposed bank regulations coming out of Europe were ‘anti-American.’ This was the same kind of argument used by Morgan and other bank titans in 1929 – the 1929 version of Too Big To Fail.
These big banks and their leaders, epitomized by Morgan Bank in 1929 and JPM Chase today, are run by entitled, privileged elites with disdain for containment by stricter new laws or enforcement of existing ones. They travel in moneyed circles, have access to the most senior political leaders, and in general are completely disconnected from the rest of the public. The only difference is that while Morgan came into his money from his father and running the Morgan banks, Jamie Dimon rose through the ranks of several banks before attaining his position. Otherwise they could be the same man, same bank, different time.
To learn more about Nomi Prin's and her new book visit www.nomiprins.com.
About the author:
Jane Dabel is an associate professor of history at California State University, Long Beach. She is the author of A Respectable Woman: The Public Roles of African American Women in 19th-Century New York (NYU Press, 2008). She is currently working on a book about the economic roles of African American women following the Civil War.