It has been called "The Great Crash."
When the New York stock market crashed in October 1929, it was followed by the slide into the Great Depression of the 1930s.
PHOTOS OF (from left) Thomas W. Lamont, John D.
Rockefeller Sr., and John D. Rockefeller Jr. were
published on Page 1 of the Enterprise on
Nov. 14, 1929 three weeks after the stock
market crash.
Last week's own dramatic economic news from Wall Street recalled events in 1929. If you think people are upset with the stock market today, you can be sure there was plenty of anger back then.
How did the events of 79 years ago appear to people at that time – at least to readers of the Leelanau Enterprise?
That was an era when “Wall Street” and “Main Street” were less connected than they are today – although they were certainly not unconnected.
There was no reference in the Enterprise
to the “crash” that took place on the morning of Oct. 24, and that’s not surprising since that was also the newspaper’s publication date. But there was also no reference to it in the following issue’s news on Oct. 31.
There was, however, news of the loss of the car-ferry Milwaukee with all on board. The loss of the ship, which had been bound from the city of the same name for Grand Haven was “the big story” for a number of newspapers in this state.
The Enterprise’s account of the loss was quite sketchy, although the car-ferry had originally been built in 1903 for service between Northport and Manistique.
Another story carried in the Enterprise’s Oct. 31 edition was that of the marriage of Charlotte Marion Day of Glen Haven to Louis Warnes, on the 28th. “The groom is a merchant at Glen Haven, proprietor of the general store formerly owned by D.H. Day,”
The newspaper reported. Mrs. Warnes, who died in August 2006 at age 94, was the last surviving child of the “locally legendary” David Henry Day.
Returning to economic matters, there was no reference to the stock market crash in the Enterprise’s Nov. 7 issue, either. Finally, on Nov. 14, news of the now historic event surfaced in the newspaper.
First, an illustrated “canned” item appeared in the lower left-hand corner of page one. Pictured was John D. Rockefeller Sr., flanked by his son and Thomas W. Lamont. Above the picture was the headline “These Men Saved the Country from a Panic.” A caption beneath the picture explained that the three had “bought heavily on the Stock Exchange in order to end the recent decline in prices and thus averted a national panic.”
The market had, indeed, rebounded some, and many observers apparently expected it would soon fully recover, as it had done in the past..
The Enterprise’s caption concluded by stating that “at a meeting called by Mr. Lamont, the decision was made to remedy the worst Wall Street situation in a score of years (since 1907, to be more precise).”
But the “remedy” was not sufficient, for what had happened was not simply another “panic,” but a crash of unprecedented magnitude. It was like Humptey-Dumptey’s great fall and “all the king’s horses and all the king’s men couldn’t put Humptey-Dumpty together again.”
But that wasn’t yet apparent on Nov. 14, 1929, when the Enterprise also ran the following editorial under the heading “What Happened in Wall Street.”
“The principal sufferers from the slump in the stock market are the business enterprises which purvey luxuries to the newly rich,” the editorial began. “One New York ‘beauty parlor,’ which charged a minimum fee of $25 for a ‘treatment’ has already closed its doors. The ‘exclusive’ jewelry shops where no customer was really welcome unless he had a hundred thousand dollars to spend report a decided falling off in sales. One Fifth Avenue furrier who had imported some Russian sables to make a $50,000 wrap for the wife of a Wall Street gambler has had the garment thrown back on his hands and is now advertising it for sale for a mere $30,000.”
The Wall Street crash, from the perspective of small town “Main Street,” was even seen as constructive. The Enterprise continued:
“Slackening of trade in things like those represents no real economic loss; quite the contrary. The $50,000 which the furrier did not get for his sables is now in the hands of gentlemen who know what to do with the money. It will be invested in something which will enable some great manufacturing establishment to add a dozen workers to its payroll. And that is worth more to all of us than a dozen sable wraps.”
And the Enterprise still wasn’t quite done with the subject. The final two paragraphs of the editorial clearly saw the glass “more than half full.”
“There is just as much money in the country as there was. Payrolls are as large as ever and growing. The businesses whose shares have declined in price are earning as much as they did before. The folk who have lost money are those who tried to get something for nothing by buying stocks at more than they were worth in order to resell them to others who were even more gullible.”
“What has really happened is that a vast amount of money has been taken out of the hands of wasters and has got into the bank accounts of men of constructive vision. Most of this money will now go into useful channels.”
The Enterprise was far from alone in not seeing the Great Depression on the horizon, in the wake of the stock market collapse.
The owners of the ill-fated Milwaukee, which went down at the same time as the stock market, immediately ordered a new vessel.
“The company (Grand Trunk R.R.) must shortly have had regrets about ordering her,” marine historian George Hilton wrote, “for the fall in traffic as a result of the depression was so great that by 1932 only two ferries were regularly in service (with the replacement boat, there were four units in the fleet).”
The new ship, named the City of Milwaukee, ironically spent its last operating years loading and unloading rail cars across the apron of a slip (at Elberta, Mich.) that had originally been built at Northport for its ill-fated predecessor.
Today, the City of Milwaukee is a museum ship permanently berthed at Manistee.
One of the very few other ships built on the Great Lakes during the Great Depression was the ore carrier Thomas W. Lamont, launched at Toledo in 1930. It was named for the aforementioned Thomas W. Lamont.
Lamont, among other things, was a managing member of the banking firm of J.P. Morgan and Company.
Years earlier, J. Pierpont Morgan, Sr., had actually been able to do what Lamont and the Rockefellers had been unable to do in 1929 – help bail the U.S. out of a financial crises.
But times had changed and President Herbert Hoover, faced with unprecedented economic problems, was unable to stem the ebbing economic tide.
In 1928, Hoover defeated the Democratic nominee, Alfred E. Smith, to become president. By 1932, however, Hoover could probably barely have defeated Alfred E. Newman of Mad magazine fame. Republicans nevertheless backed Hoover for re-election and political observers predicted a Democratic win – with any candidate – practically inevitable.
Democrat Franklin Delano Roosevelt was easily swept into office in November 1932, and was subsequently re-elected three times.
He never did win Leelanau County, however. The only Democratic presidential candidate ever to do so was Lyndon Johnson, in 1964.
A number of books have been written about the stock market crash and the Great Depression. One of them is The Great Crash, 1929 by the noted economist John Kenneth Galbraith.
“The Great Crash of 1929 contracted the demand for goods, destroyed for a time the normal machinery for lending and investment, helped arrest economic growth, caused much hardship and, needless to say, alienated countless thousands from the economic system,” Galbraith wrote.
Ironically, Hoover had misgivings about the way the economy was going as early as 1925, Galbraith tells us. But most people didn’t want to hear anything negative in the “Roaring Twenties,” when a speculative atmosphere seemed to promise potential riches for everyone.
“As secretary of commerce he (Hoover) had sought nothing so much as to get the market under control,” Galbraith wrote. “People did not know of his efforts, uniformly frustrated by Coolidge and the Federal Reserve Board, to translate his thoughts into action.”
As president, Hoover reaped what others had sown.
No one wants to re-live the 1930s and this explains, in large measure, the quick governmental response to last week’s events.
Although the Great Depression occurred many decades ago, it may seem, to those who actually lived through it, like only yesterday.
It profoundly changed lives and attitudes.
