The 1929 stock market crash and the role of Charles E. Mitchell

In the podcast episode, the hosts discuss the events leading up to the 1929 stock market crash. They highlight the optimism and wealth accumulation of the Roaring Twenties, fueled by the rise of upper-income individuals and the popularity of stock market investments. Citibank, with its investment subsidiary, played a significant role in this financial frenzy, attracting customers to buy stocks and bonds. Charles E. Mitchell, the head of Citibank, became extremely wealthy during this period, accumulating a $20 million fortune. Mitchell and Citibank engaged in practices such as margin loans and investment pools, contributing to the market's over-leveraging. However, when the market crashed in October 1929, Mitchell faced substantial losses, and his role in promoting risky investments came under scrutiny during a congressional hearing. While Mitchell was removed from his position at Citibank, he ultimately avoided severe consequences and was able to rebuild his fortune. The crash led to significant regulatory changes, including the passing of the Glass-Steagall Act and the 1933 Securities Act.