The Great Depression (16 page)

EDITOR’S NOTE

 

By the end of 1932 one out of every four families in Youngstown needed the support of charity. In January 1933 Benjamin Roth wrote in his diary that people seemed to be “marking time” until the new Democratic president took office. But in the short time between Franklin D. Roosevelt’s November landslide victory as the thirty-second president of the United States and his inauguration on March 4, 1933, the economic crisis actually deepened. Throughout the nation events taking place in the banking system, farming, the Hoover administration, and overseas created a more turbulent social and economic environment. As Richard H. Pells puts it, “Economically, the winter of 1932-1933 was the worst in American History.”

 

In 1933 more than 40 percent of home mortgages were in default. Foreclosures, notes Roth, “are no longer a disgrace.” In the nonexistent real estate market of the Great Depression, banks often deferred foreclosure proceedings. Banks realized there would be no recoup on a seized property that they couldn’t sell, rent, or even afford to maintain adequately.

 

Farmers were the most vulnerable to foreclosure in the Depression. “In Iowa, the most heavily mortgaged state, nearly one-third of the value of farms was in thrall, mainly to banks and insurance,” describes Arthur M. Schlesinger Jr. With bread selling for three cents a loaf and milk at eight cents a quart, farmers organized an influential movement called the Farmers’ Holiday Association to protest, sometimes violently, price devaluation. In May 1932 hundreds of farmers disrupted the nation’s food supply by destroying their crops and blockading highways and rails to prevent trucks or trains from distributing their milk or chickens. They overpowered and disarmed local sheriffs who tried to bring order. Though Americans were starving throughout the country because they didn’t have the means to eat anymore, farmers poured milk onto the side of the road. “Seems to me there was a Tea-party in Boston that was illegal too,” rationalized one farmer, according to historian T. H. Watkins.

 

Militant farmers also intimidated, even injured, sheriffs, bank officials, or lawyers who attempted to foreclose farms or seize properties due to unpaid taxes. By 1932 the typical farmer’s income had fallen by 64 percent, yet his indebtedness had only been adjusted to drop 7 percent. As Schlesinger explains, “A cotton farmer who borrowed $800 when cotton was 16 cents a pound borrowed the equivalent of 5,000 pounds of cotton; now with cotton toward 5 cents, he must pay back the debt with over 15,000 pounds of cotton.” Considering no one had the purchasing power in 1932 to buy 15,000 pounds of cotton from each and every cotton farmer who needed to pay back loans, farmers took the notion of loan forgiveness into their own callused hands. Mobs of angry farmers gathered at bankruptcy proceedings and farm auctions, carrying clubs and swinging a noose around a nearby tree to deter outside bidding. One Iowa debtor was able to pay back the $800 mortgage on his property for just $1.90. Sometimes, the practices turned to violence. A New York Life Insurance officer was attacked by a mob when he offered a price for a farm that was less than the value of the mortgage. In January and February 1933 farmers sabotaged at least seventy-six auctions. The outcry worked. The Iowa state legislature passed a moratorium on foreclosures on February 17, 1933. Minnesota and other farm states soon passed similar laws that winter.