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Authors: Benjamin Roth,James Ledbetter,Daniel B. Roth

The Great Depression (11 page)

BOOK: The Great Depression
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I received over the mail instructions to collect against a local man a balance of $50 due as subscription price to an “investment service.” The record shows that in 1930—over a year after the big stock crash—this man invested over $100,000 in common stocks at what then seemed to be bargain prices. The total value today at market prices is $30,000. At least half of his funds should have been invested in high grade bonds.
 
DECEMBER 18, 1931
 
It seems that if a bank once closes its doors, it remains closed forever. For awhile a fuss is made, efforts to reopen, etc. but nothing happens. That is the situation in Youngstown now with the City, Dollar & 1st Nat’l still closed. In Chicago 59 banks were closed this year and only 2 re-opened. In Toledo—out of 4 large banks—only 1 re-opened. The stock holders now are getting double-liability notices.
 
Down-Down-Down goes the stock market.
 
Many interesting stock market stories now float about. In 1929 one Youngstown man owned 4000 shares Sheet & Tube on which he received an income of $20,000. He sold at boom price of $150 per share and received $600,000. Then bought 6000 shares Republic pfd which gave him an income of about $30,000 net. Now the Republic pfd pays no dividend and is selling at $10.
 
The only moral I can see is to limit investments to the highest grade issues and to diversify. If he had invested in a diversified list of blue chip stocks and bonds he would still be a loser but not nearly so much and he would still be getting a comfortable income. A portion of good old government bonds is the backbone of many an investment list today.
 
DECEMBER 23, 1931
 
Almost Christmas and we haven’t had a snow-fall this year. The weather is like spring and it has been the warmest winter I can recall. Nothing new in business. Predictions for the new year have all been very conservative so far. A number of enterprising auto merchants and real estate dealers have been offering a bonus of 10 or more shares of common stocks in Republic Steel, Continental and other low stocks with each sale made. Others are giving cheap stocks as Xmas gifts to elevator boys, etc.
 
DECEMBER 30, 1931
 
Good news for Youngstown. The Commercial Bank and the (now closed) First National Bank will combine and reopen on Jan 4th as a new bank under the name of Union National Bank. It is said that the old stockholders of the First National Bank get nothing for their stock. Stock-holders of the old Second National have already been assessed double.
 
Stocks and bonds are still going down. Even U.S. gov’ts are selling as low as 82.
 
[Quarry owner Jacob] Coxey of Massillon, Ohio plans to issue his own city money backed the same as city bonds. He says this will help unemployment.
 
The papers are now full of the usual predictions for the new year but they are very conservative.
 
 
 
 
1932
 
JANUARY 2, 1932
 
The
N.Y. Times
yesterday had the usual new year predictions by business leaders. It was comical how each and every one refused to be definite. Last year they almost gave a date for the expected revival. The slump is now looked upon as of indefinite duration.
 
It was “interesting” to watch the workmen this morning eradicating the “First” and substituting “Union” on the old First National Bank Bldg.
 
The bank failure movement having swept thru the West and Middle-west is now devastating the East and South. Several large bank “consolidations” are announced in New York. Today’s paper announces the failure of a South Carolina bank with 44 branches. I think the old-style “country banker” is out of the picture forever. Local business men are more hopeless than ever and a good many bankruptcies are looked for in the near future.
 
JANUARY 4, 1932
 
The new Union National Bank (merger of 1st and Commercial) opens this morning and starts with a bad run. The entire room is packed like sardines and everybody is withdrawing. I don’t know how they can stand the pace long. Seems to me that they should put a limit on withdrawals.
 
JANUARY 5, 1932
 
The new Union National Bank is again crowded this morning. A few minutes after the doors opened there was a lineup of about fifty people in front of each paying window. Fortunately most of them seem to be working people who would have very small accounts.
 
JANUARY 7, 1932
 
The run on the Union National still continues. Yesterday was the 3rd day and crowds seem as big as ever. Progress is slow—about 10 minutes for each person. If a large withdrawal is demanded they are told to take it up with one of the officers.
 
Other signs of the times:
1. Sheet & Tube, preferred, sells at 40.
2. In almost every state an “army of unemployed” marches toward the capital for relief.
3. In Massillon, Coxey issues $100 city bonds to be used as money.
4. Frequently some girl or man advertises that they will marry or “sell themself” to any person for a certain sum of money which they need very badly.
5. No sign of betterment and dark predictions of large business failures this year.
 
JANUARY 9, 1932
 
The run continues on the Union National but it is much smaller. A statement published yesterday shows that even during the run the deposits exceeded the withdrawals and the bank is about 40% liquid.
 
JANUARY 11, 1932
 
The run on the Union National has practically subsided and the new bank has settled down to business.
 
The stock market continues downward and there seems no end to it. The contrast between 1929 prices and today is unbelievable. A few samples of some of the drops are Truscon 63 to 5; Sheet & Tube 175 to 12; U.S. Steel 250 to 35; Republic Steel 140 to 4; Treasury Bonds at 83; Sheet & Tube bonds at 65; good railroad bonds at 75 etc. etc. Even now there is no way of telling if the bottom has been reached.
 
In looking back now it seems that the only safe rule to follow is to sell everything when prices are high, stocks, bonds, real estate. If this had been done and the money converted into liquid form such as treasuries or municipal bonds, then today the change could be made to good, high-grade stocks and bonds. The real tragedy is that people who never speculated but invested only in banks, railroad bonds, etc. are suffering with the rest.
 
Even those who invested in 1930—after the crash—at what they considered bargain prices, now find their “bargains” selling at half price or lower.
 
The war between Japan and China drags along. Threats made by the U.S. are disregarded. Germany announces she cannot and will not pay further reparations and France threatens to collect by force what is coming to her.
 
JANUARY 27, 1932
 
Just returned from Warren. Both Youngstown and Warren look “lean and hungry.” The streets are crowded with shabby, unemployed—vacant store rooms everywhere—signs on closed banks—bankruptcy sales and half-price sales in the stores that are open—soup kitchens. It will take long to forget these things.
 
Business shows no sign of pick-up. People are already looking toward the next presidential election when a Democrat will probably replace Hoover. In the meanwhile Hoover adds to his long list of artificial stimulants his “reconstruction finance company” which will loan government money to frozen banks and industries. By the last election the Republicans lost the control of Congress to the Democrats. This seems to reflect the desire of the people for a change—altho I personally feel that Hoover or the Republican Party should not be held responsible.
 
FEBRUARY 22, 1932
 
Conditions get worse instead of better and unemployment increases. In our own family the following lost their jobs since Jan. 1st: Joe Roth; M. I. Benjamin; Roy Elliot; Morris (out 2 years).
 
The war in China continues to rage and there is grave danger that U.S. will be dragged in.
 
Youngstown is now operating several soup kitchens. The people come with buckets to take home soup and a loaf of stale bread. I visited the one being operated in the old St. Columba’s church. About 500 people were in line.
 
Pres. Hoover starts an “anti-hoarding” campaign in which people with hidden money are asked to buy government bonds.
 
MARCH 8, 1932
 
3000 unemployed riot at Ford plant in Detroit and 4 are killed by police. About a month ago Ford announced he would re-employ 100,000 men but so far has failed to live up to his promise.
 
No definite change for the better although people are more cheerful and feel they are on the up-grade. It looks as tho the Dollar Bank and City Bank will re-open soon. Depositors have signed agreements as to limit withdrawals.
 
We have had mild summer weather all winter so far but yesterday the first real blizzard of the year visited us.
 
MARCH 28, 1932
 
The first quarter of 1932 comes to a close with industry stagnant and no sign of betterment. Unemployment increases—various efforts are being made to help things but so far they have all failed. Congress is trying to pass bills to raise taxes to balance the budget and everywhere there is unrest.
 
The City and Dollar Banks are still closed. Steel industry is operating at 20%. Stocks are again going down and are now at the all-time low for this bear market.
 
It now seems that the only person who could have evaded this panic would be a person who sold everything he had at the top of the boom and then invested everything in government bonds. Even then he would lose at least 10% but he could now reinvest. Good railroad and other bonds are selling for 40 to 50%.
 
APRIL 5, 1932
 
Stocks still going down and breaking low records for the depression. The price of stock exchange seats has fallen from a high of $650,000 in 1929 to a present price of $85,000.
 
APRIL 6, 1932
 
It is common street talk now that we have not yet seen the worst of the depression. Rumors of all kind. One is that the Yo. Steel & Tube will shut down entirely and is building a fence around its property for protection. At the same time there is talk that the Sheet & Tube-Bethlehem-Inland merger will be revived. There is nothing else to add. Insanity and suicide among prominent business men is on the increase.
 
APRIL 13, 1932
 
For the 12th consecutive day stocks have been drifting lower. Congress starts an investigation of short selling. Business indexes reach new low. Steel mills operate at 20%. Sharon Steel Hoop and Ohio Works (of U.S. Steel) Plants shut down completely. B&O 8 1/2; N.Y. Central 20; Continental shares—comm. 3/8—pffd 7.8—Gen Fireproofing 5; Sheet & Tube pfd @ 35 and common @ 10. Some of these low priced stocks are bargains. Local predictors say Truscon (now 4 7/8) will go to 2.
 
Organized demand by soldiers for two billion cash bonus leads to revival of talks of U.S. going off gold standard. France again leads attack against value of U.S. dollar.
 
Locally the big stores are still deserted except when they run a sale and almost give away merchandise. I don’t see how they keep going.
 
APRIL 14, 1932
 
Talked to W. W. Zimmerman today. He said, “This is the most puzzling period of my life. I can’t understand things. Everything that I thought was right is now proving to be wrong.” And the same thought is in the minds of other thinking people. All sense of value, optimism and initiative seems to have disappeared. That is why the depression period presents so many opportunities to the man who has the nerve to buy stocks and real estate and businesses when the outlook is the blackest.
 
Signs of the times: The demand for gold metal by foreign countries on account of money scarcity has made it worthwhile to melt old gold ornaments, etc. The jewelers on E. Federal St. are running large ads saying they will pay high prices for old gold in any form. As a result many old watches, heavy rings, etc. are going back to the melting pot. Several out-of-town concerns have solicitors going from house to house.
 
Recently advertising and house-to-house canvassing has increased—buying up pass books on closed banks at 50¢ to 60¢ on the dollar. It is possible the committee trying to open the banks has something to do with this.
BOOK: The Great Depression
13.83Mb size Format: txt, pdf, ePub
ads

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