145
INTO THE GREAT DEPRESSION
shares were sold for a total daily loss of $15 billion. This was like having
burglars break into Ford’s River Rouge factory and steal four out of every ten
cars in one day. Overall, during October 1929, companies traded on the New
York Stock Exchange lost $50 billion in value, nearly 40 percent of their pre-
September worth. The plummet in companies’ values meant that millions of
mostly amateur investors lost—and lost big. Overproduction, falling wages,
layoffs, firings, gloomy financial forecasts, and devastating stock news worked
like a chain reaction: fear feeding on bad news led to more bad news and more
fear. Once begun, the Depression would only get worse. The stock market
crashes did not so much cause the Depression as signal its beginning, like a
fever breaking out days after a virus has entered the body.
The Great Depression was grim. In New York City, two weeks before
Christmas in 1930, crowds filled the pavement outside the Bronx branch of
the Bank of the United States, intending to withdraw all their savings, hav-
ing
heard a rumor that the bank was running out of money. With insufficient
cash on the premises, the bank went out of business the next day, December
11, initially taking 400,000 people’s deposits with it. Businesses relying on
the bank to meet their payrolls had nothing to offer employees. Reporting
that New Yorkers generally took the closure “philosophically, realizing that
there was nothing they could do about it,” the New York Times said, how-
ever
, that “in the less favored parts of the city . . . the foreign-born, many of
whom did not understand English, stood determinedly in the rain, hoping
that something would show up to enable them to get their money.”
11
Later,
80 percent of the bank’s deposits were paid out, but national confidence in
banks was badly shaken. By 1932, the companies listed on the Big Board at
the Stock Exchange on Wall Street had watched 89 percent of their total value
evaporate. On average, one dollar of stock in 1929 was worth eleven cents by
1932. Investors who had borrowed heavily from brokers to buy their stocks
owed ten dollars for a one-dollar sandwich. General Motors, the leading car
company in sales, lost 92 percent of its value in three years. By 1933, there
was not a single full-time employee at U.S. Steel, though in 1929 there had
been 250,000. In 1932 alone, almost one-quarter of a million people were
evicted from their homes (one out of every 480 people), and one out of every
four capable, working adults was unemployed. Capitalism seemed to many
Americans like a failed system.
When
local, state, and federal governments did not help, people turned to
simple solutions. At the cloudy edge of the continent in Seattle, Washington,
50,000 residents formed the Unemployed Citizens League and promptly began
their own barter economy, trading eggs for carpentry, fish for dentistry. They
simply gave up on money because there was not any. Children, adolescents,
and adults wandered the nation, hopping rides on railroads, begging for food