Hard Times: Part One, Origins of the Depression
12/15/08 7:50AM By Mitch Wertlieb
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(HOST) With the word now official that the United States is in recession, VPR is looking back at the country's most infamous economic downturn, the Great Depression. Today, we focus on how the nation fell into economic turmoil, and what that meant for Vermont in the earliest stages of the Depression. I'm Mitch Wertlieb.
While much of the United States was reveling in the excess of the roaring 20's...with hot Jazz and illegal liquor flowing from Speakeasies, and the stock market booming...Vermont got an early indication of the hard times to come. Paul Searls is a Professor of History at Lyndon State College:
(Searls) "A lot of traditional Vermont industries were experiencing hard times already by the mid 1920s... the paper industry is a good example of that. Paper mills were shut down across the state, so the state economy was already pretty fragile by the time the stock market crashed."
(Mitch) "...and then of course the Great Flood of 1927 comes along for Vermont & that couldn't have helped things."
(Searls) "No it didn't... it certainly really did a great deal to destroy the transportation infrastructure in the state and rebuilding that took a long time."
(Mitch) Vermont also struggled with social and health problems that have improved greatly over time. While Vermont was ranked the healthiest state in the nation in both 2007 and 2008, by the onset of the Great Depression, the outlook was bleak:
(Searls) "There was a lot of concern in the 20s about Vermont's education levels and physical health levels too... during the draft for WW1 it was discovered that Vermont had the lowest literacy rates and the worst health of any of the New England States, so in the 20s this was a concern among reformers that Vermont was falling even further behind other New England states than it already was."
(Mitch) Add to these problems an emerging crisis in the housing market. Art Woolf is an economist at the University of Vermont, and says the downward housing spiral helped usher Vermont-and the rest of the country-into a deep economic hole.
(Woolf) "We don't have really good data on foreclosures, but that was a very important part of the Great Depression. Back then you didn't have 30 year mortgages on houses. What you had was a 30 year mortgage with a balloon. And so you paid off your mortgage for 5 years, and then you had a certain amount left, and then you basically refinanced. So if you couldn't make that refinancing if the bank wouldn't give you, another loan after that, you lost your house. So I suspect that was fairly common in Vermont as well."
(Mitch) Harriet Riggs can attest to that. Harriet was born in 1919, and is 89 years old today. We met her and her husband Heath at their home in Richmond, where she told us about growing up in Chester during the Great Depression. Her father lost the family home and had to move when he couldn't find work.
(Mitch) "So your father was out of work for a time."
(Harriet) "Yes he was out of work for a time."
(Mitch) "Do you remember anything about that? Your father being out of work?"
(Harriet) "I remember he collected unemployment. And he had to get to Springfield, Vermont to pick up his check, or his money for that. And that was seven miles from Chester, and he didn't have a car, so he would walk over there. And get. I think he had to show up in person. And I remember walking over there with him one time."
(Mitch) Harriet was away at college in Massachusetts when her father was forced to move, and he didn't tell her what happened, putting off the news for as long as he could. But many years later, Harriet realized just how tough things were for her parents. Like a lot of people who lived through those times, Harriet developed a habit of saving nearly everything--because everything had value, whether financial or sentimental. She removes a piece of twine from a stack of brittle, yellowed papers with faded type-face. They're letters written by her father. One of them, dated November 1st, 1938, is a message Harriet's father sent to the auto-maker Henry Ford, asking for work. Harriet picks up the correspondence:
(Harriet) "Dear Sir, today's paper says that you are about to start an industrial plant, at South Sudbury, Massachusetts, and I hearby wish for you to consider my application for such a position, as you might have open that would be suited to my qualifications" and then he gave his history and his qualifications. He graduated from Norwich University. And he was an engineer."
"The Seven years of Depression 1929 to 1936, were too heavy a drain on my personal finances, so in 1936 I secured a position as machinist and tool maker in the experimental roof of the fellows toolmaker company of Springfield Vermont, where I worked until last April."
"I was forced to make change in homestead, and due to the fact that my daughter is working her way through Mass State College, I wish to locate somewhere in the state of Massachusetts"
(Mitch) Harriet also saved the return letter from a Ford secretary, informing her father that they were sorry, but no jobs were available.
Despite these hard times, Harriet says her family never worried about going hungry.
In many ways, common and necessary items were more valuable because they were harder to replace. Harriet's husband Heath is 90 years old, and recalls an incident he finds funny now, but was no laughing matter when it happened to him as a child.
(Heath Riggs) "My shoes got wet, and we put them in the oven to dry, which is the way that things were done in those days, somebody came a long and closed the oven door, we don't know who. And baked the shoes, so that they were just a crisp. They were not useable. And then the parents came along, and saw the situation, and they didn't know what they were going to do because, they were the only pair of shoes they had for me. So they just evidently scrounged around and managed to buy the shoes by not buying something else. That's the way they managed. I think it was a very common type of experience. 1:55 (can be tightened to around."
(Mitch) What also seems a common experience in Vermont was a sense among those who lived through the Depression that they were not living through extraordinary times. John Carpenter is 90 years old and lives today in Shelburne. He still has a boyish quality, grinning while he talks, and for him and the kids he grew up with, the onset of the Depression and the 1930's in general...were just the years that marked their childhood:
(John Carpenter) "I know the kids and the neighbor, in the neighborhoods, in school all that, didn't pay much attention to it. They're probably the same way today. I don't remember...we stopped going to the movies for example, which was 10 or 20 cents. And a few things like that that were personal. Otherwise, we grew up in that period, as happy as a lamb could be."
(Mitch) "Did your parents talk about the conditions of the time, did they talk about the times being tough?"
(Carpenter) "I'm sure they did. And my dad was used to being a foot soldier, so to say. He'd walk a mile or so it was from our house up to UVM, where he was a professor German. He'd come back at noon, and then go back up. They might have bought a car, if it hadn't been for the Depression. Because the college teachers, they were on the low side of the payroll."
(Woolf) "The real puzzle about the Great Depression is why it happened."
Again, economist Art Woolf:
(Woolf) "Essentially what happened back then, was that banks were going bankrupt, they were failing in massive numbers between 1920 and 1933, 10,000 banks failed, that's about one out of every 10 banks in the United States. 2:59
The Contrast with today is remarkable, we've had some bank failures and some big ones, but it's just a handful it's not massive."
(Mitch) Woolf says the federal government had a window of opportunity to address those bank runs with aggressive action, but-especially in the early days of the Depression--failed to get involved .
(Woolf) "And what the fed should have done back then, was to inject large amounts of money and be what it should be which is a lender of last resort and if banks were having bank runs, the famous scene from It's a wonderful life with Jimmy Stewart is a classic example of that, the feds should have sent trucks up to that bank with money in it and give the depositors money. We now have the FDIC which prevents that, or hopefully prevents that from happening."
(Mitch) Harriet Riggs says even when her family did suffer great financial losses, her parents didn't look to place blame, and they didn't discuss it with their children. Harriet's father lived to be 106...and still was reluctant to talk to her about the Depression. I asked Harriet again about the letter her father wrote to Henry Ford asking for work.
(Mitch) "You say you weren't aware of financial difficulties at the time."
(Harriet) "No they never talked about any problems."
(Mitch) "Really, even though in this letter that you've just read to us, he mentions the depression. (Harriet) he does, but he didn't talk to his children."
(Mitch) "Why do you think that is?
(Harriet) I don't know. He just didn't want us to worry." (laughs)
(Mitch) Tomorrow in our series, we'll get a snapshot literally-by examining historical photos-of what Vermont looked like during the worst years of the Depression.
For VPR News, I'm Mitch Wertlieb.
Photo: Louise Rosskam - Lincoln-silver salesman, Library of Congress
VPR Photo: Harriet Riggs