The Great Depression

Excerpts from Brother Can You Spare a Dime

The Great Depression 1929 - 1933

By Milton Meltzer

Published by The Library of American History

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"We have not yet reached the goal, but given a chance to go forward with the policies of the last eight years, and we shall soon, with the help of God, be withing sight of the day when poverty will be banished from the nation."  Herbert Hoover on August 12, 1928 in this speech accepting the Republican nomination for President.

(Pg-7)  The gap between incomes was wide.  The 27,500 wealthiest families in America had as much money as the 12 million poorest families.  The nation's top and bottom were worlds apart.  While miners and lumbermen earned about $10 a week, Andrew Mellon was paying an income tax of $1,883,000, Henry Ford a tax of $2,609,000 and John D. Rockefeller Jr. a tax of $6,278,000. 

During the twenties, Mellon was secretary of the treasury in the cabinets of Presidents Harding, Coolidge and Hoover.  His goal was to cut government spending and reduce taxes.  By 1928, as the wave of prosperity carried large capital investors to new peaks of income, he succeeded in drastically chopping the income tax of the very rich.  During that decade the income of the rich from dividends, interest and rent rose by almost 30%.  By 1929 the 5% of Americans with the highest income were taking in about one-third of all personal income.

(Pg. 10)  A New York Times reporter described the scene:

"Fear struck the big speculators and the little ones, big investors and little ones.  Thousands of them threw their holding 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. . . The entire financial district was thrown into hopeless confusion and excitement.  Wild-eyed speculators crowded the brokerage offices, awed by the disaster which had overtaken many of them."

 (Pg. 11)  The big bankers tried to come to the rescue: They pooled their resources to halt the collapse.  Prices moved up a little during the afternoon, but within a few days the avalanche roared down again. 

On Monday, October 28, the losses were much worse.  The next day, Tuesday, was what historians have called "the most devastating day in the history of markets."  Sixteen million shares were sold, and many put up for sale could find no buyers, no matter how low the price. . . . .

The shock was terrible, but most people could not really believe what was happening.  On October 25, the day after the crash, President Hoover had reassured the nation: "The traditional business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis."  On November 4, Henry ford announced: "Things are better today than they were yesterday."  On November 15, Hoover spoke to the newspapers again: "Any lack of confidence in the economic future of the basic strength of business in the United States is foolish."  And on December 10, the chairman of the board of Bethlehem Steel, Charles M. Schwab, declared: Never before has American business been as firmly entrenched for prosperity as it is today."

(Pg. 15)  Within two months, the crash of the stock market had thrown several million people out of work.  The trouble spread quickly.  Many businesses came to a dead halt.  Salespeople were fired from stores, factories cut down on production, executives decided not to expand.  Recently completed office buildings, apartment houses and hotels could find few tenants.  Construction ground to a standstill.  Banks tightened up on credit, and business and industry ran dry of funds.  And as the wheels slowed down, and then stopped, pink slips began to appear in pay envelopes . . .

(Pg. 16)  The auto industry shrank like a punctured balloon.  Certainly no one would make a down payment on a Model T or Stutz Bearcat now.  The Willys plant in Toledo dropped from 28.000 workers in March 1929 to 4,000 in November.  In Detroit it was no better.  The Ford payroll - 128,000 in March - sank to 100,000 in December.  eighteen months later it had dwindled to 37,000.

(Pg. 28)  Undernourishment was common throughout the country.  Infants and children, in the growing years when good food and decent shelter and a sense of security are of the greatest importance, faced the specter of famine.  A big drop in consumption of milk was noticed in state after state.  Everywhere health officials reported that child welfare and public nursing were usually the first services to suffer when city and state budgets were cut.

(Pg. 30 & 31)  As early as 1930 the census revealed that over 3 million children seven to seventeen years old were not in school.  Soon, in Alabama five out of six schools were shut down for lack of funds.  Over 300 schools in Arkansas were open only 60 days during the year.  In the hard-hit coal state of West Virginia, 1,000 schools gave up altogether and turned their pupils away.  New York City laid off 11,000 teachers in 1932-1933.  By the end of 1933 it was nationwide: 2,600 schools had closed their doors.  The education of at least 10 million children was disabled by shutdowns or shortened terms. 

At least a third of the children reported out of school by the 1930 census were working - in factories, canneries, farms, or sweatshops in the home.  Parents were desperate to see anyone in the family earning and sent their children to work.  As a result, sweatshops were springing up everywhere.  Back again, as in the earliest years of the Industrial Revolution, were the abuses of long hours, low wages and unhealthy working conditions.  child labor laws were being openly flouted.

(Pg. 32)  Many boys and girls who failed to find jobs near home of felt they were a burden to their parents simply took to the road.  A sight new to the 1930's was the army of young transients.  The Children's Bureau estimated that by late 1932 a quarter of a million under the age of 21 were roaming the country.  They hopped freights, bummed their food and lived along the tracks with the hardened hoboes in squatters camps called jungles. 

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