The Big Bull Market by Frederick Lewis Allen From Only Yesterday, 1932 Course Title: Writing Prose...

The Big Bull Market by Frederick Lewis Allen From Only Yesterday, 1932

Course Title: Writing Prose

Instructor: Liu Hongyong

Warming Up

Would you like to become a millionaire overnight? By what means?

How much do you know about stock market? Do you think it is a good way to make quick

money through speculating in the stock market? Why and Why not?

Born: July 5, 1890, Boston, Massachusetts, USA.

Died: Feb. 13, 1954 (aged 64), New York City, USA.

Studied: Harvard University. Occupation: Social historian and

editor (the Atlantic Monthly, the Century, Harper’s Magazine).

Background Knowledge Frederick Lewis Allen(1890–1954)

Representative works:

Only Yesterday (1932), Since Yesterday (1940), The Big Change (1952).

He is best remembered for his journalistic but nonetheless penetrating works of social history.

Background Knowledge Frederick Lewis Allen(1890–1954)

Bull (buyer): It refers to a person who buys business shares in

the hope of reselling them at a higher price. A Bull Market: It indicates a period of time when stock prices are

rising. It is a rising market and a period of optimism. It tends to be associated with increasing investor confidence, motivating investors to buy in anticipation of future capital gains. A bull market is also described as a bull run.

Background Knowledge A Bull Market and A Bear Market

Bear (seller): It refers to a person who keeps selling stocks so as

to lower the price, and at last buys back at a lower price a larger amount than that sold.

A Bear Market: It indicates a period of time when stock prices

(values) are falling. It is a falling market and a period of pessimism. Investors anticipating further losses are motivated to sell, with negative sentiment in a vicious circle.

Background Knowledge A Bull Market and Bear Market

Background Knowledge Why Bull and Bear?

The precise origin of the phrases "bull market" and "bear market" is obscure. The Oxford English Dictionary cites an 1891 use of the term "bull market".


Some Clues It relates to the head (neck) of the animals: Bear’s head (neck)

points downwards while Bull’s head (neck) points upwards.


Some Clues It relates to the way that the animals attack: Bull attacks upwards with its

horns from bottom, while Bear swipes downwards with its paws from above.


Some Clues It relates to the speed of the animals: Bull usually charges at very high

speed whereas Bear normally is lazy and cautious mover.


Some Clues Bear hibernates, while Bull does not.


Some Clues The word "bull" plays off the market's returns being "full" whereas

"bear" alludes to the market's returns being "bare". The expressions "bullish" and "bearish" mean optimistic and

pessimistic respectively.

It refers to the rising stock market in the USA in 1920s (known as “Roaring Twenties”), especially during the period from March 3, 1928 to October 24, 1929.

Background Knowledge The Big Bull Market

Throughout the 1920s a long boom took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value. Many investors became convinced that stocks were a sure thing and borrowed heavily to invest more money in the market.



By August 1929, brokers were routinely lending small investors more than 2/3 of the face value of the stocks they were buying. Over $8.5 billion was out on loan, more than the entire amount of

currency circulating in the USA.


The rising share prices encouraged more people to invest; people hoped the share prices would rise further. Speculation thus fueled further rises and created an economic bubble. The average P/E (price to earnings) ratio of Composite stocks was 32.6 in September 1929, clearly above historical norms. After an amazing five-year run when the world saw the Dow Jones Industrial Average (DJIA) increase in value fivefold, prices peaked at 381.17 on September 3, 1929.


Many believed that the market could sustain high price levels. Irving Fisher famously proclaimed, “Stock prices have reached what looks like a permanently high plateau”.

Most economists view this event as the most dramatic in modern economic history.

It is also known as The Wall Street Crash of 1929, the Crash of ’29 or the Great Crash.

It was the most devastating stock market crash in the history of the USA., taking into consideration the full scope and longevity of its fallout.

Three phrases — Black Thursday (October 24, 1929), Black Monday (October 28,1929), and Black Tuesday (October 29, 1929) — are used to describe this collapse of stock values.

Background Knowledge New York Stock Market Crash

The initial crash occurred on Black Thursday, but it was the catastrophic downturn of Black Monday and Tuesday that precipitated widespread panic and the onset of unprecedented and long-lasting consequences for the USA.

The collapse continued for a month and followed by the

Great Depression.

Background Knowledge New York Stock Market Crash

Impact: academic debate The New York Stock Market Crash, starting from

the USA and spreading to Europe and the rest of the world, had a major impact on the U.S. and world economy & society.

It has been the source of intense academic debate—historical, economic and political—from its aftermath until the present day.

The main question is: Did the Great Crash cause the Great Depression, or did it merely coincide with the bursting of a credit-inspired economic bubble?

Background Knowledge

New York Stock Market Crash

Impact: academic debate Many academics see the Wall Street Crash of 1929

as part of a historical process that was a part of the new theories of Boom and Bust.

According to economists, the Great Crash was a historical event in the continuing process known as Economic Cycles

(prosperity – recession – depression – rehabilitation). It is widely regarded as signaling a worldwide

economic turn-down that initiated the Great Depression starting from 1929 and lasting through most of the 1930s.



Impact: direct result Decline of international trade: US export: $5.2 billion (1929)

$1.7 billion (1933); UK 50% drop. Decline in personal income: 1932, US: 25%, UK: 20% Drop in tax revenue, price and profit. Loss of jobs, homes, savings and property.



Impact: direct result Suicides, deaths due to starvation, disease and lack of medical

care. Bankruptcies, business closures. Physical and psychological depression. Political turmoil and social unrest (Hitler in power in 1933).



Stories of Suicides Winston Churchill, visiting New Yo

rk, was awakened the day after Black Tuesday by the noise of a crowd outside the Savoy-Plaza Hotel. "Under my very window a gentleman cast himself down fifteen storeys and was dashed to pieces, causing a wild commotion and the arrival of the fire brigade," he wrote.



Stories of Suicides Reporters in downtown Manhattan

were checking out a rumor that 11 busted brokers had jumped out of windows.

A vice president of the Earl Radio Corporation jumped to his death from the window of a Manhattan hotel. His suicide note read, "We are broke. Last April I was worth $100,000. Today I am $24,000 in the red."



Stories of Suicides A St. Louis broker swallowed

poison. A man committed suicide by

sticking his head in an oven.



• The Great Stock Market Crash of 1929

Background KnowledgeThe Great Depression

Background KnowledgeThe Great Depression

Wall Street Crash on the Dow Jones Industrial Average, 1929

Christmas Dinner

A Breadline in NYC

Farm Closure

Unemployment

The 30th President of the US (1923 – 1929) Republican He is remembered for “Coolidge Prosperity”; a small

government; laissez-faire economy. The political genius of President Coolidge was his

talent for effectively doing nothing: “This active inactivity suits the mood and certain of the needs of the country admirably. It suits all the business interests which want to be let alone...” He himself said: “the business of the American people is business”.


John Calvin Coolidge (1872-1933)

Silent Cal: Coolidge was a quiet man, a man of few words, and was therefore commonly referred to as "Silent Cal." He said: "I think the American people want a solemn ass as a President and I think I will go along with them."

Once, Dorothy Parker, seated next to him at a dinner, said to him, "Mr. Coolidge, I've made a bet against a fellow who said it was impossible to get more than two words out of you." His famous reply: "You lose."

It was also Parker who, upon learning that Coolidge had died, reportedly remarked, "How can they tell?"


John Calvin Coolidge (1872-1933)

The 31st President of the US (1929 – 1933). Republican. Economic policy: promotion of economic

modernization, the Efficiency Movement. He tried to combat the Great Depression with volunteer

efforts and government action, none of which produced economic recovery during his term.

He had the longest retirement of any U.S. President and died 31 years after leaving office, during the administration of Lyndon Johnson — his fifth successor.


Herbert Clark Hoover

(1874-1964)

The 32nd President of the US (1933-1945).

Democratic The New Deal: 1933 – 1938 Goal: the three Rs (Relief, Recovery an

d Reform ) -- direct relief, economic recovery and financial reform.

Most programs abolished in 1943 due to opposition.

Programs still in place: Social Security and the Securities and Exchange Commission.


Franklin Roosevelt

(1882-1945)

The only U.S. President to have served more than two terms (elected to four terms in office).

On Fear

The only thing we have to fear is fear itself.


Franklin Roosevelt

(1882-1945)

Paragraph I

1.Find out the topic sentence of this paragraph and its key word.

The Big Bull Market was dead. 2.The key word dead in the first sentence is echoed

in the following sentences. Please identify these echoes.

disappeared, lost, dropped, debt, suicides.

3.What disaster did New York Stock Market Crash bring about?

1> A blow in the face of the grocer, the

window-cleaner, and the seamstress, etc.

2> The impact upon the wealthy people and

investors.

3> The daily report of suicides.

Paragraph I

Paragraph I4. Why are the grocer, the window-cleaner, and

the seamstress mentioned? They are mentioned to show the magnitude of the disastrous

crash of the Big Bull Market by which the rich and the poor were hit alike. It shows that the distress of the stock market has struck them a blow in the face.

With a hope of out of poverty, these poor people had put their life savings or even borrowed money with high interests into the stock market. But the sudden collapse of the market broke their dream and ruined their life. With their capital gone and maybe a heavier debt left, they were sure to bear more hardship and poverty in life instead of the realization of living in comfort and at ease.

5.What account for the fact that “Investors who had dreamed of retiring to live on their fortunes now found themselves back once more at the very beginning of the long road to riches”.

The capital they have been accumulating over the years has gone all of a sudden. This sudden disaster has broken their dream of retiring to live in comfort and at ease, and even worse than that, it sent them back where they started. All their past efforts have proved to be in vain. The strenuous struggle has to be started all over again.

Paragraph I

6.What does the wave of suicides suggest to you about the market crash?

The emergence of the wave of suicides testified to the extreme gravity of the stock market crash.

Paragraph I

1.Why Coolidge-Hoover Prosperity was not yet dead, but it was dying?

Because the effect of the crash on society as a whole would take some time before they could be felt to the full.

“Coolidge-Hoover Prosperity was not yet dead” functions as an alteration of the sweeping statement “The Gig Bull Market was dead.”

Paragraph II

2.What is the indication of the decline in American economy?

a multitude of ills (poisons) besetting the body economic;

the wave of panic selling of stocks and shares hastening the spread of the ills.

Paragraph II

3.Why does the writer say “ills had passed unnoticed”? Because they were overshadowed by the illusion of permanent

prosperity (stock market optimism).

4.Is the sentence “a multitude of ills beset the body economic, as poisons seep through the human system” an example of simile or metaphor? Why?

simile, as.

Paragraph II

5.What are the three encouraging signs? Are they strong enough to guard against the poisons?

liquidation of broker’s loans; Reserve Banks’ lowering the rediscount rate; larger banks/corporations surviving the emergency. no.

Paragraph II

Also the Federal Reserve, informally the Fed. The central banking system of the US created by Congress

via the Federal Reserve Act in 1913.

Paragraph II Federal Reserve System

A quasi-governmental banking system Board of Governors: 7 members (Chairman and Vice

Chairman: 4 years service term; other five: 14 years service term), appointed by the President and confirmed by the Senate.

12 regional Federal Reserve Banks: Boston, New York City, Philadelphia, Cleveland,

Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco.


Roles and Responsibilities Conducting national monetary policy. Supervising and regulating banking institutions. Maintaining economic stability and containing systemic

risks. Providing financial services to the US government and

foreign official institutions.


The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank.

The rediscount rate is the interest rate charged to member banks by regional Federal Reserve Bank for rediscounting top-grade commercial paper offered by its member banks.

rediscount means to discount (esp. commercial paper) for a second time.

Paragraph II

The discount rate and The rediscount rate

6.What are the main causes (poisons) of the decline in American economy?

1> overproduction of capital; 2> over expansion of business concerns; 3> overproduction of commodities; 4> the maintenance of an artificial price level for many commodities; 5> the depressed condition of European trade.

Paragraph II

7.How did the experts of finance and the President respond to the menace of a major depression?

They simply turned for aid to empty promises, reassurance and consolation. Their response demonstrated their powerlessness to impede the progress of depression.

8.Who does the President refer to? Herbert Clark Hoover

Paragraph II

9.Translation: No matter how many soothsayers of high finance proclaimed that all was well, no matter how earnestly the President set to work to repair the damage with soft words and White House conferences, a major depression was inevitably under way.

尽管高级金融机构许多预言家宣称一切还好，尽管总统甜言蜜语、白宫频频商讨，一本正经地着手去医治创伤，然而一场大萧条的到来已不可避免。

Paragraph II

1.Find out the topic sentence of this paragraph and its key words. What terms repeat the meaning of these key words?

Prosperity is more than an economic condition; it is a state of mind.

mass thinking, mass emotion.

Paragraph III

2.Translation:Prosperity is more than an economic condition; it is a state of mind. The Big Bull Market had been more than the climax of a business cycle; it had been the climax of a cycle in American mass thinking and mass emotion.

繁荣不仅是一种经济状况，它还是一种心态。大牛市不仅是一个商业周期性的高峰，它也使美国大众思想和大众情绪达到了周期性的顶点。

Paragraph III

3.Please explain that “prosperity is more than an economic condition; it is a state of mind”.

A superior economic condition not only provides material gratification, but also brings about a sense of security. It brings about a confidence in the future and an optimistic outlook on life.

Paragraph III

4. Please explain that “The Big Bull Market had been more than the climax of a business cycle; it had been the climax of a cycle in American mass thinking and mass emotion”.

the climax of a business cycle: referring to the highest state of economic activity marked by prosperity of the different stages of recurrent succession. A business cycle: prosperity-recession-depression-rehabilitation

“the climax in mass thinking and emotion”: an indication of the high spirits of the American people who were confident of success and a brighter future.

Paragraph III

5.Explain the reason why “There was hardly a man or woman in the country whose attitude toward life had not been affected by it in some degree and was not now affected by the sudden and brutal shattering of hope.”

Nearly all the Americans enjoyed prosperity before the crash and built their hope or faith upon it, but their hope was shattered into pieces by the sudden falling of the market.

Paragraph III

6. What does Allen imply by “new adjustments, new ideas, new habits of thought, and a new order of values”? Explain it with examples.

It implies that the end of prosperity (the decline of the American economy) demanded the Americans of some necessary sacrifice and deprivation.

Paragraph III

It can be explained by the following examples: 1) Youngsters who had planned to go to college and

looked forward to a promising career were now forced to give up such a project and take up something less ambitious.

2) Merchants who had thought of expanding business and making a fortune had to be content with what little they had.

3) Housewives were forced to make drastic cut on household spending .

4) Merry-making, theatre-going as well as keeping private cars and taking holidays abroad had now become luxuries. Hard-working and thrift had come to be regarded as virtues.

Paragraph III

Paraphrase the underlined parts1.The psychological climate was changing; the ever-shifting currents of

American life were turning into new channels. the economic situation having experienced a drastic change, to

comply with it, the American way of life now had to remold itself and to look for a new orientation, to take a different course.

2. The Post-war Decade had come to its close. An era had ended. American prosperity

Paragraph III & IV

For whom is the author writing? The whole selection, in view of its academic quality, should be

intended for educated people as a whole, especially for those who are interested in finance, business and social history, such as economists, historians, government officials, etc.

The purpose of the author 1) Uncover the artificiality of the Big Bull Market; 2) Cheer up the people in the Great Depression; 3) Help people cope with the bad situation; 4) Learn from the mistakes of the past, thereby live a better life in the future.

Reader and Purpose

1.Restatement Restatement is one of the simplest ways of

achieving emphasis. When restating, the writer often repeats sentence

form as well as the meaning. The writer may restate with the same words, or

restate the same idea with different words.

Writing Techniques

In this selection, the writer organizes his material by restatement. After the first strong statement of his subject in the first sentence, he tells us over and over that the big bull market was dead. But he does not merely repeat himself. Each sentence, each paragraph shows us a different and interesting view of the same topic.

The writer restates the idea of death in every paragraph. In the first paragraph, the writer restates the death in each sentence with different echoing words. In the second paragraph, the writer carries on the restatement, using dead and dying. In the third paragraph, the writer uses gone and going. In the last paragraph, the author uses the words 'close' and 'end' to echo the word 'dead'.

Writing Techniques

2.Completing a cycle/Closing by return/ Return to the beginning

At the end of a passage the author returns to the rhythm and the sense of his beginning.

The last word of the opening sentence of this article is 'dead'. In the last paragraph, the author uses the words 'close' and 'end' to echo the word 'dead' in both sense and rhythm. So the author's idea has come full circle, he completes a cycle or closes by return or returns to the beginning.

Writing Techniques

3.Strong words.

Avoid colorless words; use strong, descriptive, concrete words.

seep --- go (11) soothsayers --- experts (21) brutal --- cruel/unkind (30) why soft (23)?

Writing Techniques

seep, flow slowly through holes; go, colorless. soothsayers refers to fortune-teller whose prediction

may be superstitious. experts can predict scientifically. brutal is very cruel, severe, hard to bear. It is stronger

than cruel or unkind which are too general. soft words are kind, sweet, soothing and pleasant to

the ear.

Writing Techniques

• Although it is sketchy in appearance, this extract is the fruit of a deep-going research into the 1929 New York Stock Market Crash and its tremendous impact on the American economy as well as on the American mentality. The author has chosen the New York Market Crash as his starting point and his study let him view the crash as a signal marking the end of an era of American prosperity. The writing differs from news coverage in that (simply because) the author had purpose to work out a logical conclusion from the early symptoms of the economic decline in the United States rather than merely report what had happened to American economy. In view of academic quality, of the extract, it would be safe not to assume that it was intended for the general public, i.e. the man in the street. This extract is characteristic of its brevity of discourse, subject broad enough to fill up volumes, however, its organization is economical in the treatment of material and its overwhelming diction. All these combined make it a model for expository writing.

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