Published May 15, 2020
By ARNOLD KOCH
MELROSE — In April, the U.S. unemployment rate jumped to 14.7 percent, the highest level since the Great Depression. Back then, the stock market crashed on Black Tuesday, October 29, 1929. In days, nearly $30 billion was lost. By 1930, businesses were closing, jobs were scarce, and banks, with some people’s life savings, were closing. Installment buying had been very popular. People had bought more and more on time. When things got tight, they stopped and the market became glutted with products.
By 1932, nearly 3,500 banks, holding billions in unsecured deposits, had gone under. Twelve million were unemployed (25 percent of the U.S. workforce.) About 1 million of New York City’s 3.2 million working population were unemployed.
In Chicago, 40 percent of its employable workers were idle. By May, Chicago teachers had received only five months pay for the last 13 months and 3,177 had lost $2,367,000 in bank failures. That same month, there was a hunger march of 500 in Boston. The governor of Pennsylvania estimated that 250,000 persons in Philadelphia “faced actual starvation.”
Growing up in the Great Depression, I remember respectable-looking men knocking on our backdoor in New Jersey looking for odd jobs or even food. In Manhattan, a few jumped out of buildings (windows were easier to open then – no central air conditioning). Our neighbor lost her husband by suicide. My grandfather lost his business and had to move in with us.
Len Dalton once wrote in the Melrose Mirror how his grandfather, a bank president, was greatly extended on margin in 1929. “Apparently, it meant ruin for him, so one day he drove his car into the garage at his Wellesley home, closed the doors, and allowed the carbon monoxide from the engine exhaust to kill him. My grandmother was so grief stricken that she couldn’t bring herself to attend the funeral.”
Bill Jodrey once wrote that, “the Depression had taken a death grip on the economy when I left Melrose high school in a pique of frustration with teachers/schools/financial scrimping, etc.
“I did not see into the future so my mind shut down and I took off for the open road. If I thought things were bad when I left, I soon learned just how much worse they could become. I spent four months hitchhiking and riding freight trains from Melrose, to Seattle, down the West Coast to Los Angeles and back by various routes to Boston.”
The entire Western World had sunk into the Great Depression. How much the Crash had to do with it is still debated. A “culture of greed” was blamed as well as President Herbert Hoover whose first reaction was to wait it out. He insisted that the Red Cross, not the government, could handle it. Shantytowns, called “Hoovervilles” were soon everywhere (including the Boston Common and New York’s Central Park).
Twenty thousand veterans camped out in Washington demanding early payment of a bonus they were promised for serving in World War I. It would have set the government back around $4 billion to buy each recipient five months of food and shelter. It failed in the Senate but 8,000 veterans refused to leave their encampment. Hoover authorized $100,000 to hasten their departure with the money to be deducted from the bonus pool. On July 28, 1932, when they refused to leave,
General Douglas MacArthur, assisted by Major Dwight Eisenhower, forced them out with infantry, tanks, calvary and tear gas. Two veterans died. The nation was outraged, especially when Hoover and MacArthur justified the action by claiming the marchers were criminals and communists.
When Franklin Roosevelt was elected President by a landslide in 1932, he faced one of the greatest challenges ever faced by a President. At his Inauguration on March 4, 1933, Roosevelt set the tone with these words:
“This is pre-eminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great nation will endure as it has endured, will revive and will prosper.
“So first of all let me assert my firm belief that the only thing we have to fear. . .is fear itself. . . nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”
His first act was to declare a bank “holiday” to prevent more panic withdrawals. Checks were not honored and payrolls not met. Some tried to persuade their friendly grocer to give them food on credit. Congress passed a rescue bill that finally propped up the banks with federal loans. The people trusted the President and about $600 million in hoarded currency was redeposited in a week and $1 billion in a m onth. On March 16, 1933, the Melrose Savings Bank reopened “by authority of the government” with instructions not to pay out more than $100 to each applicant.
Roosevelt then asked Congress for emergency powers “as great as the power that would be given to me if we were in fact invaded by a foreign foe.” Among many programs, he pushed through Congress huge federal loans for public works which also took millions of youngsters off the streets to build highways and plant ten million trees.
One of the government programs, later to be called the Works Progress Administration (W.P.A.), turned out to be a lifesaver for the Melrose unemployed.
By 1933, the Melrose Department of Public Welfare’s expenditures had gone from $25,648 to $128,175 since 1930. The City’s 1933 Annual Report summed up the situation:
“One of the questions uppermost in the minds of American people is how long these huge relief expenditures must continue. The numbers out of work are still so vast as to require hundreds of millions of dollars in relief payments to take the place of wages that do not exist. Until the federal public works program is developed in volume great enough to offer work opportunities, relief payments in increasing sums will be necessary.”
In 1934, the Mount Hood Park development project began with the construction of the 40 ft. Slayton Memorial Tower at a cost to the Federal Government of about $5,500. and the employment of 24 laborers and 4 masons. During 1934, $338,368 was paid by the government to Melrose workers at Mt. Hood. Only those in need of help or relief were eligible for work. Two shifts were maintained to provide more with work. During 1935, an average of 665 men and women were receiving federal government assistance for work on various projects.
If you wanted to go to a local bar in those depressing times to drown your sorrows… forget it. In 1934, Melrose remained “The Spotless Town” and voted against the sale of all alcoholic beverages. You could, however, take a swim in Ell Pond to cool off. Almost 40,000 did so with no fatalities or major accidents and 10 water rescues.
By 1935, the U.S. was the only industrial nation in the world without national old-age and unemployment insurance. Both programs were adopted that year. In 1936, the first nine holes were finished at Mt. Hood and the second nine holes and club house were started to make it “one of the finest recreational areas in the state.”
President Roosevelt became known as “The Great Communicator.” His “fireside chats” on the radio (no TV then} were a mandatory family event. Even movie theaters placed ads that the show would be interrupted for his speech. Albert Sindlinger, who worked for the Gallop Organization, later said, “his strength was in his voice and his sincerity, and this would not have carried over on television, because what carried Roosevelt was what you imagined in your head as he spoke.”
Columnist Westbrook Pegler, a constant critic of FDR, wrote, “He needs to be fought all the time, for he has an enormous appreciation of himself and of any idea which he happens to approve, but if the country doesn’t go absolutely broke in his time, it will be a more intelligent and a better country after him.”
Roosevelt’s goal of full employment in peacetime was never achieved. In 1938, there were still 10 million unemployed. Auto production was just half that of 1937. In Hitler’s Germany, however, where six million had once been unemployed in a population of 66 million, by 1938, the number of unemployed had sunk to a miniscule 200,000 out of a workforce of 25 million. It was an impressive achievement, but, unlike us, it depended on military conscription and a vastly expanded army, on massive rearmament and, finally, compulsory labor services for all young Germans.
It wasn’t until Germany’s invasion of Poland in 1939, when war orders came into our factories from England and France, that U. S. employment improved, but full employment came only after we entered World War II, in December 1941.
References: Fortune Magazine (9/32), City of Melrose Annual Reports (‘30 – ‘38), “The Century” (Jennings-Brewster), “American Heritage” (8/65), “America,” Allistaire Cooke, “FDR,”Ted Morgan.