Assessing the Great Depression
Several Senators from the U.S. Senate Banking and Currency Committee, led by Ferdinand Pecora, held court from 1932 to 1934 to investigate the cause of the biggest financial collapse in American history. The group probed stock-exchange practices in an attempt to determine how they had played such a detrimental role in U.S. banking, commerce and securities.
The lengthy process saw the investigation of bankers like J.P. Morgan, who at one point during the proceedings had a midget named Lya Graf placed in his lap by an employee of Ringling Bros. Circus for a camera gag — the world's smallest woman sitting on the world's richest man. More than $250,000 and 12,000 published pages later, banking reform finally became a reality. Two major laws that came about as a result included the Glass-Steagall Banking Act of 1933, which separated commercial and investment banking, and the Securities Exchange Act of 1934 that formed the Securities Exchange Commission, which regulates the stock exchanges.