(Ferdinand Pecora investigated the nation’s most influenti...)
Ferdinand Pecora investigated the nation’s most influential bankers and stockbrokers to determine what caused the Wall Street Crash of 1929, which in turn led to the Great Depression. Pecora, as Chief Counsel of the Senate launched investigation, shined a vivid light on the shocking practices that permeated Wall Street to the highest echelons of power. This book contains the judgements, the personal impressions, and the conclusions of the man whose personality dominated the proceedings. The mighty J. P. Morgan was forced to admit he and many of his partners hadn’t paid any income taxes in the previous two years and his reputation was tarnished. Pecora’s exposé of the practices of National City Bank (now Citibank) made banner headlines and caused the bank’s president to resign. Ferdinand Pecora writes about the investigation in the same straight-forward way he conducted it. Four of the New Deal's major reforms came as a direct consequence of Wall Street Under Oath. It is a book of enduring importance. Federal Reserve Chairman Ben Bernanke said the 2008 “Great Recession” was actually worse than the Great Depression, making Pecora's insights more relevant than ever before.
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Ferdinand Pecora was born on January 6, 1882 in Nicosia, Enna, Sicily, Italy. He was the first of seven children of Louis Pecora, a shoemaker, and Rose Messina. At age five he immigrated with his family to the United States and grew up in New York City's Chelsea neighborhood.
Ferdunand Pecora attended the City College of New York and received his law degree from New York Law School in 1906.
Ferdinand Pecora was admitted to the bar in 1911. In 1912, Pecora campaigned for Theodore Roosevelt for president and later served as vicechairman of the Progressive party in New York. When the party disbanded he joined the Democratic party and supported Woodrow Wilson in 1916. He became assistant district attorney for New York County in 1918, and chief assistant district attorney from 1922 to 1930, directing the office during the protracted illness of District Attorney Jacob Banton. In January 1933, Senator Peter Norbeck of South Dakota appointed Pecora, then in private practice in the Manhattan law firm of S. T. & P. Hartman, chief counsel to the Senate Banking and Currency Committee's investigation of the Wall Street practices that led to the stock market crash of 1929, an inquiry that had foundered under two previous counsels. Assigned to prepare the final report, Pecora determined that he needed additional information and persuaded the committee to let him continue the probe. He recruited a talented staff, largely from the New York County district attorney's office, and subpoenaed the records of the National City Bank.
In February 1933, when bank chairman Charles Mitchell testified, Pecora exposed questionable practices by both the bank and its investment affiliate, the National City Company, as well as Mitchell's personal evasion of taxes. Mitchell resigned, the bank severed its relations with its investment company, and the banking committee expanded its investigation. Democrats assumed the Senate majority in March, and the new chairman of the Banking Committee, Duncan Fletcher of Florida, retained Pecora as counsel. The elderly chairman gave free reign to the vigorous, cigar-smoking New York prosecutor, and defended him against criticism from conservative committee members.
Shrewd, hardworking, and possessed of a remarkably retentive mind, Pecora absorbed masses of statistics and other data to use in questioning executives of Wall Street investment banks, brokerage houses, and stock exchanges. He called J. P. Morgan, Jr. , to the stand and revealed that the wealthy banker had paid no income taxes in 1930 or 1931, and that no bank examiner had ever examined the books at Morgan's bank. During a break in the hearings an enterprising circus promoter slipped a midget onto Morgan's lap, and the widely published press photographs attracted greater public attention to Pecora's revelations. The publicity that the Pecora investigation generated contributed to major reforms of banking and stock market practices. Provisions of the Glass-Steagall Banking Act of 1933 (mandating the separation of commercial banks from their securities companies), the Securities Act of 1933, the Securities Exchange Act of 1934, and the Public Utilities Holding Company Act of 1935 responded to issues that the investigation had raised.
Since Pecora and his staff were preoccupied with conducting hearings, they played little direct role in drafting this legislation, much of which fell to the young New Dealers Benjamin V. Cohen, Thomas J. Corcoran, and James M. Landis. Pecora exerted his greatest influence over the Securities Exchange Act, which the drafters strengthened considerably to meet his objections. When he had concluded his work as counsel in June 1934, Pecora accepted a one-year appointment to the new Securities and Exchange Commission (SEC). When President Franklin D. Roosevelt named financier Joseph P. Kennedy to the five-year term, implicitly endorsing Kennedy for chairman, Pecora expressed doubts that a stock speculator would make an effective watchdog for Wall Street. As Pecora feared, Kennedy promoted a conciliatory policy, easing regulations to win business support for the SEC.
Pecora regularly voted in the minority at commission meetings. Frustrated with the SEC's tendency to compromise and bored by bureaucratic routines, he resigned after six months when Governor Herbert Lehman appointed him to a vacant seat on the New York Supreme Court. Pecora also harbored political ambitions. In 1933 he ran unsuccessfully as the anti-Tammany "Recovery party" candidate for New York County district attorney, campaigning during weekend recesses of the Banking Committee's hearings. After his appointment to the court in 1935, he was elected that year to a full fourteen-year term on the Democratic, Republican, and Liberal tickets. Pecora was reelected in 1949. He received public notice in 1936 when he presided over a special court term dealing with New York special prosecutor Thomas E. Dewey's prosecution of racketeers. In 1950, after New York City Mayor William O'Dwyer resigned under suspicion of corruption, the Tammany organization recruited Pecora as Democratic candidate for mayor, billing him as a fearless prosecutor, distinguished jurist, and "a man of stature above politics. " Pecora's platform embraced New Deal and Fair Deal policies, endorsed civil rights, and denounced the Taft-Hartley Act.
The combined Democratic and Liberal party nominations made him the front-runner. But acting mayor Vincent Impellitteri, campaigning on an independent "Experience party" ticket, tagged Pecora the candidate of the bosses, and portrayed himself as the candidate who could not be bought. Pecora lost to Impellitteri by over two hundred thousand votes. Having resigned from the supreme court in 1950 to run for mayor, Pecora returned to private law practice. He remained active in civic affairs until his death in New York. The Wall Street investigations had been Pecora's signal achievement. At a time when many Americans questioned the validity of capitalism, the Pecora hearings produced identifiable villains and made complex economic problems understandable in moral terms. The banking and security systems, he demonstrated, needed stricter government supervision to prevent a recurrence of the flagrant abuses of the 1920's. Government regulation of private finance became the Pecora investigation's legislative legacy.
Fredinand Pecora died on December 7, 1971.
(Ferdinand Pecora investigated the nation’s most influenti...)
Ferdinand Pecora was a founding member of the National Lawyers Guild.
On November 30, 1910 Ferdinand Pecora married Florence Louise Waterman. They had one child.
