Anneville

Preface

Tuesday, the 29th of October, 1929, “Black Tuesday,” is considered by most people to be the seminal event in the decade-long disaster that has come to be known as The Great Depression. In the early months of 1929, some economists were warning that the financial structures of America, and ­indeed of most of the industrialized world, were heading for a massive breakdown; but very few investors heeded these warnings and no one foresaw the full magnitude of the calamity that was about to occur.

Statistics alone cannot fully illustrate how bad things became after the crash, but they are useful to some extent, and so they are presented here for what they are worth.

On Black Tuesday over sixteen million shares were traded -- a record that lasted for 30 years. In only two weeks the market had lost 26 billion dollars, one third of the value recorded in September, 1929 -- money that could never be recovered. How much that 26 billion would be worth in today’s dollars is inestimable; how much human suffering this loss caused can only be imagined.

Businesses began to fail at an alarming rate. By the end of 1930, there had been a record-breaking 26,255 business failures, and the Gross National Product was down 12.6 per cent. Agriculture, which had been in trouble all through the twenties, was now in even deeper trouble. Farm foreclosures reached epidemic proportions. The miseries of those impacted by the Dust Bowl have been brilliantly described by  John Steinbeck in his The Grapes of Wrath, but similar miseries were inflicted on farmers all over the country.

In Iowa groups of farmers had to resort to armed violence to try to keep their farms from being taken away from them by the banks. Farmers who managed to keep their farms were unable to sell their products, and it was not uncommon to see crops rotting in the fields and live stock dying on the hoof for want of markets.

People who had bank savings lost their money too.

The banking system began to collapse. In 1930, 1,352 banks suspended operations forever, wiping out the savings of all of their depositors. A pathetic example of one of these failures might help to illustrate how devastating these were to ordinary folks:

On December 11, 1931, New York City’s Bank of the United States failed, and 400,000 depositors lost all of their savings permanently. Most of the depositors had been immigrants -- small businessmen and wage earners who had labored long and hard to set aside money that would tide them over during hard times. It would be a long time before these folks would ever trust an American bank again.

The shrinking buying power of the public resulting from the losses in the stock market and banks created a chain reaction that ravaged our entire economy. Business and industry were forced to lay off more and more workers, and these unemployed workers were unable to buy goods, which caused businesses and factories to lay off even more and more workers. By December, 1930, 4 million workers had lost their jobs. By the end of 1931, unemployment had soared to 8 million; and by November, 1934, unemployment had reached 13 million.

Those who had lost their savings in the stock market or in bank failures became completely destitute once they lost their jobs. The few public, private, and religious relief agencies that had existed before the crash became hopelessly overwhelmed. The federal government was restricted by law from assisting local and state relief authorities; so these agencies became overwhelmed also.

Those who depended on pensions for income soon found their income reduced drastically and, in many cases, completely cut off.

For the first time in the history of the country the tide of immigration was reversed: hundreds of thousands of people left our shores to try to find a better life some place else. Many American citizens of Mexican heritage headed for south of the border. In California illegal Mexican farm laborers were packed into boxcars like cattle and shipped back to Mexico. The catalogue of grim statistics goes on and on.

Hunger, privation, and malnutrition became widespread. In some areas people, especially children, died of famine. A reporter wrote about the terrible plight of a small band of unemployed coal miners in Appalachia. One worker told the reporter: “The winter is the worse. That’s when we begin to lose the children. Seven have died already -- you ain’t seen anything really bad until you see one of your little ones shrivel up and die cause you don’t have enough food to keep ‘em alive.”

Such tragic anecdotes are not isolated examples: they are all too familiar.

But the allotment of human misery is never evenly distributed, and the severity of the suffering in those days varied widely from region to region.