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CHAPTER 1

The Cruelest Year

That August a writer for the Saturday Evening Post asked John Maynard Keynes, the great British economist, whether there had ever been anything like the Depression before. "Yes," he replied. "It was called the Dark Ages, and it lasted four hundred years." This was calamity howling on a cosmic scale, but on at least one point the resemblance seems valid. In each case the people were victims of forces they could not understand.

Some vaguely blamed "conditions," Hoover's euphemism. Others confused the Depression with the stock market Crash of 1929 — "We haven't been to the city since the Depression," they would say, or "I used to, but that was before the Depression." A remarkable number of sufferers stoically accepted the implicit charge of malingering made by President John E. Edgerton of the National Association of Manufacturers: "Many of those who are most boisterous now in clamor for work have either struck on the jobs they had or don't want to work at all, and are utilizing the occasion to swell the communistic chorus." An explanation lies in the strength of the Protestant ethic forty years ago in America. Although millions were trapped in a great tragedy for which there could plainly be no individual responsibility, social workers repeatedly observed that the jobless were suffering from feelings of guilt. "I haven't had a steady job in more than two years," a man facing eviction told a New York Daily News reporter in February 1932. "Sometimes I feel like a murderer. What's wrong with me, that I can't protect my children?"

Such men had been raised to believe that if you worked diligently, you would succeed. Now failure was dragging down the diligent and the shiftless alike. Men were demoralized, and "a demoralized people," as Walter Lippmann wrote then, "is one in which the individual has become isolated. He trusts nobody and nothing, not even himself." Seventeen years later, in The Lonely Crowd, Riesman explained the plight of the inner-directed man caught in such a crisis: "If repeated failures destroy his hope of future accomplishment, then it is likely that his internal strengths can no longer hold the fort against the external evidence. Overwhelmed with guilt, he will despise himself for his failures and inadequacies." Newspapers of that period are crowded with accounts of men who took their own lives rather than go on relief. Emile Durkheim had created a special category, "altruistic suicides," for men who killed themselves rather than become a burden to the community.

The real blame lay in the false underpinnings of the Coolidge-Hoover "New Era" prosperity. Seen in perspective, the Depression appears to have been the last convulsion of the industrial revolution, creating a hiatus before the technological revolution. In the aftermath of the World War, the techniques of mass production combined to increase the efficiency per man-hour by over 40 percent. This enormous output of goods clearly required a corresponding increase of consumer buying power — that is, higher wages. But the worker's income in the 1920s didn't rise with his productivity. In the golden year of 1929, Brookings economists calculated that to supply the barest necessities a family would need an income of $2,000 a year — more than 60 percent of American families were earning. In short, the ability to buy did not keep abreast of the volume of goods being turned out. It was part of the foolishness of the time to argue that the surge in production was no problem, that "a good salesman can sell anything." In practice this meant that while the rich (and many who weren't rich) were speculating in stocks, zealous salesmen were encouraging a kind of mass speculation. Customers of limited means were being persuaded to take products anyhow, the exchange being accomplished by an overextension of credit.

The stock market, honeycombed with credit in the form of brokers' loans, crashed of its own weight, calling to account the millions of little deals consummated by commercial travelers who had sold anything and everything to people lacking the means to pay for it. Thus ended the New Era prosperity. The panic followed, and the country couldn't cope with it. The last extended economic crisis had been in 1893; since then America had become so industrialized that a massive return to the farm was impossible. There was a certain rough justice in Herbert Hoover's ascent to the Presidency on the eve of the catastrophe, for as Secretary of Commerce he had been fascinated with productivity and indifferent to the dangerous lack of buying power. Long after he left the White House, he realized what had happened and wrote: "A margin of some thousands ... got too much of the productive pie for the services they performed. ... Another margin of some 20 percent got too little."

Between the Crash and 1932, the cruelest year of the Depression, the economy's downward spiral was accelerated by measures which, according to all accepted canons, ought to have brought recovery, and which in practice did the opposite. To protect investments, prices had to be maintained. Sales ebbed, so costs were cut by laying off men. The unemployed could not buy the goods of other industries. Therefore sales dropped further, leading to more layoffs and a general shrinkage of purchasing power, until farmers were pauperized by the poverty of industrial workers, who in turn were pauperized by the poverty of farmers. "Neither has the money to buy the product of the other," an Oklahoma witness testified before a congressional subcommittee, explaining the vicious circle. "Hence we have overproduction and underconsumption at the same time and in the same country."

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In June 1932, Ivy League seniors joined 21,974 other alumni hunting for jobs. By then New York department stores were requiring bachelor degrees for all elevator operators, and that was the best many of them could do, but twenty-year-old Sylvia Field Porter, Hunter '32, was an exception. She switched her major from English to economics because of what she later called "an overwhelming curiosity to know why everything was crashing around me and why people were losing their jobs" and talked her way into an investment counsel firm. At the same time she began a systematic study of the financial world, with the thought that one day she might write a column about it. She then discovered that she was in the middle of a crisis without historical precedent.

Ever since the fiasco of England's South Sea Company in 1720, the phrase "South Sea bubble" had been used to describe a doomed business venture. The bubble had certainly burst; South Sea stock had plunged to 13.5 percent of its highest quotation. Yet it subsequently rallied, and the firm continued to do business for eighty years. By the time of Miss Porter's commencement, however, United States Steel and General Motors had dropped to 8 percent of their pre-Crash prices. Overall, stocks listed on the Big Board were worth 11 percent of their 1929 value. Investors had lost 74 billion dollars, three times the cost of the World War. More than 5,000 American banks had failed — in Iowa City, just across the county line from Hoover's native West Branch, all five banks were shut — and 86,000 businesses had closed their doors. The country's Gross National Product had fallen from 104 billion dollars to 41 billion (in 1973 it would be 2,177 billion). In 1932, 273,000 families were evicted from their homes, and the average weekly wage of those who had jobs was $16.21.

Some enterprises flourished. The contraceptive business was netting a quarter-billion dollars a year, a fact which the youth of that day conveniently forgot after they had become parents. Over half the population was going to the movies once a week (admission was a quarter for adults, a dime for children), and each year saw an increase in the number of cigarette smokers, none of them aware that the habit might be harmful. Kelvinator refrigerators and Atwater Kent radios were moving briskly. Miniature golf courses and circulation libraries were booming. Alfred C. Fuller was doing very nicely with his corps of door-to-door brush salesmen; in the grim month of August 1932 his sales leaped from $15,000 to $50,000 and grew thereafter at the rate of a million dollars a year. A prodigy named J. Paul Getty was quietly picking up cheap petroleum wells; that February he gained control of 520,000 of the Pacific Oil Corporation's one million shares. Here and there a venture was lucky. In Quincy, Massachusetts, the owner of a curious restaurant with a bright orange roof and pseudo Colonial architecture was almost bankrupt when a stock company opened across the street. Its first play was Eugene O'Neill's nine-act Strange Interlude. Every evening there was an 8:30 intermission for supper, and the restaurateur, Howard Johnson, survived.

But these were exceptions. U.S. Steel, the key to heavy industry, was operating at 19.1 percent of capacity. The American Locomotive Company didn't need much steel. During the 1920s it had sold an average of 600 locomotives a year; in 1932 it sold one. Nor was the automotive industry the big steel customer it had been. Month by month its fine names were vanishing: the Stutz Motor Company, the Auburn, the Cord, the Edward Peerless, the Pierce Arrow, the Duesenberg, the Franklin, the Durant, the Locomobile. One rash man decided to challenge Ford with another low-priced car. He called it the Rockne, lost 21 million dollars, and killed himself. In January an inventive bacteriologist named Arthur G. Sherman had become the sensation of the Detroit Auto Show by exhibiting the first crude, hand-carpentered, wooden trailer. In 1932 he sold just eighty of them. Air transport nose-dived. Airliners then had twelve seats, of which, the Department of Commerce reported, an average of seven were flying empty. And with the exception of the new talkies, most entertainers were foundering. In four years the jazz musician Eddie Condon landed four recording sessions; the phonograph recording industry had dwindled from 50 million dollars a year to a quarter-million. Sally Rand was making a precarious living with her celebrated fans; to a reporter who asked why she did it, she replied, "I never made any money till I took off my pants."

Because poverty was considered shameful, people tried to conceal destitution from neighbors, often with considerable success. One could never be sure about the family across the street. The smartly dressed young lawyer who always left home at the same time each morning may have been off to sell cheap neckties, magazines, vacuum cleaners, pressure cookers, or Two-in-One shoe polish door-to-door in a remote neighborhood. He may have changed his clothes and gone to another part of the city to beg. Or he may have been one of the millions who looked for work day after day, year after year, watching his children grow thinner and fighting despair in the night. There were certain skills developed by men who spent their days in the streets. You learned to pay for a nickel cup of coffee, to ask for another cup of hot water free, and, by mixing the hot water with the ketchup on the counter, to make a kind of tomato soup. In winter you stuffed newspapers under your shirt to ward off the cold; if you knew you would be standing for hours outside an employment office, you wrapped burlap bags around your legs and tied them in place. Shoes were a special problem. Pasteboard could be used for inner soles, and some favored cotton in the heels to absorb the pounding of the concrete. But if a shoe was really gone, nothing worked. The pavement destroyed the cardboard and then the patch of sock next to it, snow leaked in and accumulated around your toes, and shoe nails stabbed your heels until you learned to walk with a peculiar gait.

It was remarkable how ingenious an impoverished, thrift-minded family could be. Men resharpened and reused old razor blades, rolled their own cigarettes or smoked Wings (ten cents a pack), and used twenty-five-watt light bulbs to save electricity. Children returned pop bottles for two cents or stood in line for day-old bread at the bakery. Women cut sheets lengthwise and resewed them to equalize wear, retailored their clothes for their daughters, and kept up a brave front with the wife next door — who may have being doing the same thing on the same meager budget. Families sorted Christmas cards so they could be sent to different friends next year. Sometimes a man would disappear for weeks. All the neighborhood knew was that he had gone on a "business trip." It was a considerate husband who withheld the details of such trips from his wife, for they were often more terrible than anything she could imagine.

He was, of course, looking for work. The legends of job hunting had become folklore by 1932, and some of the unbelievable stories were true. Men did wait all night outside Detroit employment offices so they would be first in line next morning. An Arkansas man did walk nine hundred miles looking for work. People did buy jobs. In Manhattan a Sixth Avenue employment agency did have five thousand applicants for three hundred jobs. It is a matter of record that a labor subcommittee of the 72nd Congress heard testimony about men setting forest fires in the state of Washington so they would be hired to put them out. Business Week verified the fact that a great many people who no longer loved America either left it or attempted to. Throughout the early Thirties the country's emigration exceeded its immigration. Amtorg, the Russian trading agency in New York, was getting 350 applications a day from Americans who wanted to settle in Russia. On one memorable occasion Amtorg advertised for six thousand skilled workers and a hundred thousand showed up, including plumbers, painters, mechanics, cooks, engineers, carpenters, electricians, salesmen, printers, chemists, shoemakers, librarians, teachers, dentists, a cleaner and dyer, an aviator, and an undertaker.

New York drew countless job seekers from surrounding states, though the city had a million jobless men of its own. A few strangers joined Manhattan's seven thousand nickel shoeshine "boys" or found furtive roles in the bootleg coal racket — 10 percent of the city's coal was being sneaked in by unemployed Pennsylvania miners — but most outsiders wound up on one of New York's eighty-two breadlines. If a man had a dime he could sleep in a flophouse reeking of sweat and Lysol. If he was broke he salvaged some newspapers and headed for Central Park, or the steps of a subway entrance, or the municipal incinerator. The incinerator's warmth drew hundreds of men on winter nights, even though they had to sleep on great dunes of garbage.

Returning from such an expedition in or under an empty freight car, a husband would review family assets with his wife and estimate how long they could keep going. Wedding rings would be sold, furniture pawned, life insurance borrowed upon, money begged from relatives. Often the next step was an attempt at a home business, with its implicit confession to the neighborhood that the pretense of solvency had been a hoax. The yard might be converted to a Tom Thumb miniature golf course. The husband might open a "parlor grocery." The wife might offer other wives a wash, set, and manicure for a dollar. In Massachusetts, idle textile workers erected looms in their living rooms; in Connecticut, households strung safety pins on wires, toiling long hours and earning a total of five dollars a week for an entire family.

These last-ditch efforts rarely succeeded; there were so few potential customers with money. Finally hope was abandoned. The father went to the city hall, declared himself penniless, and became a statistic. Because those figures were poorly kept, the precise extent of poverty is unknown. Somewhere between 15 million and 17 million men were unemployed, with most of them representing a family in want. Fortune, in September 1932, estimated that 34 million men, women, and children were without any income whatever. That was nearly 28 percent of the population, and like all other studies it omitted America's 11 million farm families, who were suffering in a rural gethsemane of their own.

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During the Nixon Presidency, when America's farm population had shrunk to 5.2 percent of the population, it was hard to realize that only forty years earlier 25.1 percent had been living, or trying to live, on the land. They had not shared in New Era prosperity; the Crash merely worsened a situation which had already become a national scandal. By 1932 U.S. farmers had come to remind one reporter of Mongolian peasants seen in the rotogravure sections of Sunday newspapers, and the shadow of imminent famine fell across the plains. Agricultural prices hadn't been so low since the reign of Queen Elizabeth. Farmers were getting less than twenty-five cents for a bushel of wheat, seven cents for a bushel of corn, a dime for a bushel of oats, a nickel for a pound of cotton or wool. Sugar was bringing three cents a pound, hogs and beef two and a half cents a pound, and apples — provided they were flawless-forty cents for a box of two hundred.

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Excerpted from "The Glory and the Dream"
by .
Copyright © 2013 William Manchester.
Excerpted by permission of RosettaBooks.
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