Self-Help In Hard Times
The United States in the Great Depression and Beyond
A Hearts of Iron 2 AAR
The United States in the Great Depression and Beyond
A Hearts of Iron 2 AAR
Chapters
1929 - 1936
The Hoover Administration
Chapter I - The Stock Market Crash
Chapter II - Lost Oppurtunities
Chapter III - The Bonus Army
Chapter IV - The General Strike of 1932
The 1932 Election
Chapter V - The 1932 Election, Part I
Chapter VI - The 1932 Election, Part II
Chapter VII - The 1932 Election, Part III
The New Deal
Chapter VIII - The New Deal
Chapter IX - The Dust Bowl
Chapter X - Communists and Trotsky
Chapter XI - Alphabet Soup & Labor Unrest
Interlude I
The Oval Office I - USS Texas
1936
A Few Months of Disaster
Chapter XII - A Few Months of Disaster
The 1936 Election
Chapter XIII - The 1936 Election, Part I
Chapter XIV - The 1936 Election, Part II
Chapter XV - The 1936 Election, Part III
Interlude II
Chapter XVI - Germany During The Great Depression
Chapter XVII - The 1936 Military Budget
The 1936 Election (Continued)
Chapter XVIII - The 1936 Election, Part IV
Chapter XIX - The 1936 Election, Part V
Chapter XX - The 1936 Election, Part VI
1937
The Debs Administration
Chapter XXI - The Debs Administration, Part I
Chapter XXII - The Debs Administration, Part II
Chapter XXIII - The Debs Administration, Part III
Chapter XXIV - The Socialist Deal
Attempting A Revolution
Chapter XXV - Interregnum to Revolution
Chapter XXVI - Revolution, Part I
Chapter XXVII - Revolution, Part II
Chapter XXVIII - Revolution, Part III
Chapter XXVIX - Revolution, Part IV
Chapter One: The Stock Market Crash of 1929
The most critical event in United States history was to occur in 1929. Late in October of that year the Dow Jones Industrial Average dramatically fell from its peak of 321.17 only a few weeks before. Within hours eleven prominent investors had committed suicide, the first of many to come. Only a few days later the entire capitalist structure that had held aloft the nation for decades self-imploded. Meanwhile President Herbert Hoover had continued to endorse the Smoot-Hawley Tariff Act that was to dramatically increase tariffs on over twenty-thousand goods, a move that only furthered an increasingly alarming situation. While the fortunes of the rich were dramatically worsening, the losses felt by the middle and lower classes were worse. John Galbraith, in his book The Wild Crash was to say, “the economy was fundamentally unsound.” Moreover he linked many of the problems to a “bad distribution of income” where a mere five-percent of the population was to control over thirty-percent of the nations wealth. Prominent historian Howard Zinn would go further stating:
”Howard Zinn” said:A socialist critic would go further and say that the capitalist system was by its nature unsound: a system driven by the one overriding motive of corporate profit and therefore unstable, unpredictable, and blind to human needs. The result of all that: permanent depression for many of its people, and periodic crises for almost everybody. Capitalism, despite its attempts at self-reform, its organization for better control, was still in 1929 a sick and undependable system.
Despite attempts by prominent Wall Street bankers such as Thomas W. Lamont, Albert Wiggin, and others, the crisis worsened on the 28th – Black Monday. Newspaper reports had ignited panic over the weekend, culminating in a rush to sell stocks on the floor. In the resulting financial explosion the Dow Jones lost over thirteen-percent of its value. The next day it was even worse, losing another twelve-percent despite salvation attempts by William C. Durant and members of the Rockefeller family. The rush of sales had driven almost every stock price dramatically down – General Motors quickly saw its stock fall by more then fifty-percent. Less then three years after the event the Dow Jones was to rest at a mere 41.22 points.
Banks in New York found themselves hemorrhaging money in every conceivable fashion. Swamped with thousands of clients wishing to remove their money the American banks keeping the German economy running canceled their loans. In response the Germans were to shortly cancel their war reparations, spreading the financial panic in all directions. Even with the increase in capital generated by such moves, the public attempting to remove their saving plunged thousands of banks into bankruptcy. The New York Daily on the 25th was to the picture lines, stating it was “panic in the streets”, adding “during the conference of bankers that halted the decline, the steps in front of the sub-treasury were filled with interested watchers.” Even after such events many did not understand the magnitude of the financial implosion, one broker was recorded as saying, “when the smoke has cleared away and stoke trading is done again on a reasonable basis, today's activity will be described as the Panic of 1929.” The Daily reported the Stock Exchanger ticker two hours behind trading on the floor, trading as they described was “done in the dark. Reporter Waldo Young who had observed several previous panics was to state:
”Waldo Young” said:It is over. We have seen the worse. Heaven forbid that anything worse then yesterday on the Stock Exchange should be possible!
I have been personally through the decline of 1903, 1907, 1914, and 1920. As I recall the worse days of those panicks, none of them was as wicked on the floor of the exchange then the artificial panic of 1929 – at midday yesterday. The whole country was involved in the trading.
The ticker did not finish recording the days prices until 7:07 p.m. Total sales were roundly 13,000,000. It was a “volume day” with a vengeance.
Panic was to grip Wall Street, requiring more then four-hundred additional officers to maintain any sembelence of order
With the tickers continuing to work for hours after the markets closed, the Chairman of the National City Bank, Charles E. Mitchell was to say, “I still see nothing to worry about, I still stand back of the statement I made when getting off the ship last Tuesday.” While many of the rich closed their eyes of the crisis, over five thousand banks were to shut down, and as a result businesses financially dependent on them followed suit. Those businesses that could continue to employ workers did so, but slashed wages again and again as the depression continued into the next year. Industrial production spiraled downwards:
”Howard Zinn” said:Industrial production fell by 50 percent, and by 1933 perhaps 15 million (no one knew exactly) – one-fourth or one-third of the labour force – were out of work. The Ford Motor Company, which in the spring of 1929 had employed 128,000 workers, was down to 37,000 by August of 1931. By the end of 1930, almost half the 280,000 textile mill workers in New England were out of work. Former President Calvin Coolidge commented with his customary wisdom: “When more and more people are thrown out work, unemployment results.” He spoke again in early 1931, “This country is not in good condition.”
Unknown to Coolidge, Hoover, and everyone else in the United States the worst was yet to come. Middle and lower class workers could not rely on the government. Even President Hoover a devout Quaker and believer in charity could grasp the gravity of the situation seen and did almost nothing to rescue the situation. Finding themselves alone the workers knew they would need to rely on self-help in hard times.
The Great Depression had arrived.
Next: Herbert Hoover and the Rise of Hoovervilles
Last edited: