By TONY RENNELL

Last updated at 00:50 18 March 2008

On A roof in Wall Street, the banking area of New York, a maintenance worker was going about his business on the afternoon of October 24, 1929.

Then he looked down and saw a big crowd in the street below watching him. They thought he was about to jump.

Shares on the New York Stock Exchange had been plummeting all day. There were rumours of suicides. The maintenance man seemed to fit the bill.

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Lives being ruined by the minute: Outside the New York Stock Exchange, October 1929

And so one of the great myths of the 1929 Wall Street crash was born. Bankers jumping out of skyscrapers and stockbrokers leaping to sudden death is the abiding image of economic collapse in all our minds. But it is not strictly accurate.

History does record the fate of the executive of a cigar company at this time, perched on a high ledge in Manhattan and then plunging to his death below.

But it turned out he was just trying to fix the radio aerial in his hotel room.

But if that myth about the great crash of 1929 was an exaggeration, then the rest of the story is horrifyingly true. It brought America's prosperity and the belief of its people in never-ending growth to a sudden, unexpected and tragedy-laden halt.

Speculators, from the big tycoons to ordinary men and women, lost everything.

In the aftermath, recession turned into Depression, millions lost their jobs and fell into poverty.

Breadlines filled the streets that once had seemed paved with gold.

Almost 80 years on, with the world's stock markets in turmoil and America's fifth largest securities bank, Bear Stearns, having to be bailed out, the events of 1929 may seem as if they are coming to haunt us.

Is history about to repeat itself?

The roots of the 1929 crash lay in the almost unparalleled wealth that had characterised the Roaring Twenties - a period not unlike the economic good fortune the West has enjoyed for the past 25 years.

President Calvin Coolidge felt he was presiding over capitalism and all its benefits, and the delights, the prosperity, would go on for ever, he assured the American people.

The United States had never had "a more pleasing prospect than that which appears at the present time," he said in late 1928.

The barometer of all this was the New York Stock Market though, as it shot higher and higher, and trade became hotter and hotter, thermometer might be a better analogy.

The market had tripled in four years and its prices reached an all-time high in September 1929.

The middle classes were piling in with their surplus cash, and more.

"In the previous century, people like this had no idea they could do such things with their money," said one historian of the period.

"But the experience of War Bonds during World War I - buying pieces of paper and getting a return on it later - really got people into this idea of paper assets, and it became a kind of craze."

They were egged on by investors like Will Payne, who swore that putting your money in shares was no longer a gamble because everybody was winning.

John Jaskob, the author of Everybody Ought To Be Rich, told his expectant readers: "Just put $15 a month into shares, and it will be $80,000 in 20 years." No sweat.

Millions of ordinary people bought into this idea of wealth without having to work for it.

You threw everything you could into shares, and if you didn't have the cash to hand then the banks - in an awful pre-echo of today's sub-prime crisis - were more than happy to oblige.

With interest rates at 3.5 per cent, credit was cheap.

Everybody was a broker or a tipster. Like house prices in recent years, shares dominated after-dinner conversation from New York to San Francisco.

One observer noted that: "All sorts of people to whom the ticker-tape machine had been a hitherto alien mystery were whipping out the early editions of afternoon papers to catch the 1.30pm quotations from Wall Street."

Another was told by his barber in a whisper, "Buy Standard Gas. It's doubled. It's good for another double."

The man reflected that if the hysteria had reached "barber level", then something was not right.

A classic bubble was reaching bursting point.

On the morning of October 24 - "Black Thursday" as it came to be known - as the bell rang to signal the start of trading on the Wall Street Exchange there were no buyers, only sellers.

Even now, no one is absolutely sure why it happened on that day.

There was some political uncertainty over a new tariff about to be imposed on foreign goods which would push up prices in the shops, but little more to launch a crisis, let alone one that would engage the whole world.

But sentiment had turned. The future looked less rosy than it had done yesterday. A mighty sell-off was under way.

"It carried down with it speculators big and little in every part of the country, wiping out thousands of accounts," the New York Times reported.

People sold in panic, taking any price they could get for fear that soon their shares would be worthless.

Thousands, the Times continued, "threw their holdings into the whirling stock exchange pit for what they would bring.

"Losses were tremendous and thousands of prosperous brokerage and bank accounts, sound and healthy a week ago, were completely wrecked in the strange debacle, due to a combination of circumstances but accelerated into a crash by fear."

The ticker-tape on which prices were reported could not keep up and was sometimes 30 points behind the prices actually being traded on the frantic floor of the exchange.

Speculators were "wild- eyed," the Times reported, "awed by the disaster that had overtaken them".

Outside in the street, the crowds spotted the workman on his roof and feared the worst.

There was a bid to stop the rot.

Five of the most influential bankers in America met in crisis talks and after a brief discussion announced that they believed the market to be sound, that the collapse in prices was "technical" rather than fundamental and that many shares were now selling well below their true value.

They put their money where their mouths were and bought huge bundles of shares.

The reassurance worked and suddenly there were buyers eager for stock that an hour before you could barely give away.

But the damage had been done.

The bigger banks and traders may have recovered their position by the end of the day, but it was the smaller speculators, gambling with borrowed money, who were hardest hit.

If the big bankers, with their vote of confidence, thought they had contained the beast, they were wrong.

Four trading days after Black Thursday came Black Tuesday.

Panic turned into rout.

Between eight billion and nine billion dollars were wiped off the value of shares that day, "the most disastrous in the stock market's history," according to the New York Times.

On the floor of the Exchange, traders fought like animals.

"They hollered and screamed," one observer said. "They clawed at one another's collars. It was like a bunch of crazy men.

"Every once in a while, when Radio or Steel [shares] would take another tumble, you'd see some poor devil collapse and fall to the floor."

The New York Times saw efforts to rally the market simply swamped.

"Banking support which would have been impressive and successful under ordinary circumstances was swept violently aside as block after block of stock, tremendous in proportions, deluged the market."

The Rockefellers were among those attempting to halt the decline by throwing in their money but the market simply crashed through their quotations and plunged downward "in a day of disorganisation, confusion and financial impotence".

The human casualties could only look on.

As the New York Times reported: "All over the city, groups of men, with here and there a woman, stood watching spools of ticker-tape unwind and as the tenuous paper with its cryptic numerals grew longer at their feet, their fortunes shrank.

"They were like friends around the bedside of a stricken friend. There were no smiles.

"There were no tears either. Just the camaraderie of fellow sufferers. Everybody wanted to tell his neighbour how much he had lost.

"Nobody wanted to listen. It was all too repetitious a tale."

That day, more than 16 million shares were sold. By the time the exhausted market closed, the Dow Industrial Index, the measure of share prices, had lost nearly a quarter of its value.

It would be 25 years before it got back to its high of just two months earlier.

Investors were ruined. More importantly - and perhaps more pertinently for today - the banks which had been so eager to lend money to fund the share buying, shut up shop.

Businesses found themselves without credit.

Company closures followed - 100,000 in the next few years - and America spiralled downwards into Depression.

Economists still disagree about what caused the crash. It wasn't the economy, they say.

America's finances were sound, the Government had a healthy surplus on its budget, balance sheets were strong in the corporate sector and shares were not in fact as overvalued as might have been expected.

But the facts of the economy were irrelevant. Once confidence had gone, sheer panic took over.

The long-term impact on America was enormous. One observer wrote: "We thought American business was the Rock of Gibraltar.

"We were the prosperous nation and nothing could stop us. There was a feeling of continuity.

"If you made it, it was for ever. Suddenly the big dream exploded. The impact was unbelievable."

What stared America in the face was an era of unprecedented poverty and unemployment in which men who had once run their own companies queued up to be jurors in the courts just to get the $4-a-day allowance.

You could barely move in New York for shoe shine boys and door-to-door salesmen just trying to scrounge a living.

It was a fate America - and the world - never wants to repeat.

Could the 1929 crash - and, by implication, the Depression of the 1930s - have been prevented? Some economic historians believe it was part of an unstoppable economic cycle, just as some analysts believe a major downturn is certain now.

But stock market crashes can be better managed today than the one of 1929.

Then the bankers did try to stop it, but their intervention was too little and too late.

It had been a different story 22 years earlier in 1907, when panic threatened the American banking system.

The tycoon J. P. Morgan came to the rescue by forcing bankers to fund a multi-milliondollar rescue package.

Summoning the country's leading financiers to his New York mansion, he told them: "This is where the trouble stops." It did.

Perhaps it is some comfort in America's present financial crisis that it is the bank that still bears his name, JPMorgan Chase, that is leading the Bear Stearns rescue.

This is where the trouble stops? We shall see.