And the stock market is in a free fall, with each day bringing new lows. Things will likely get much worse, bringing untold harm to millions of Americans who find themselves out of a job with little safety net to rely on.
We have seen this before. In the early 1930s, the bottom was falling out until there was nowhere left for Republican President Herbert Hoover to stand. The stock market plunge of 1929 set in motion a loss of business confidence that led to the Great Depression.
Like today’s pandemic, the Depression crisis had been a long time in the making. The economy of the 1920s was riddled with structural problems, from declining agricultural profits to the maldistribution of income to a fragile banking industry. Hoover, an engineer by training and the former secretary of commerce, did take steps to restore confidence, but they were not enough. As things worsened, Americans realized that much bolder measures were necessary, measures that Hoover refused to take. Angered by this unwillingness, voters decisively elected Franklin Roosevelt in 1932 to save the day. Absent massive intervention — or even with it — Donald Trump risks a repeat in 2020.
The stock market collapse on Black Thursday, Oct. 24, 1929, triggered a total economic collapse. Despite some momentary rallies, there was no snapback for years to come.
The rampant evidence of a sharp economic decline was most visible in the bread lines that dotted city landscapes. Usually, the lines of unemployed men disappeared when the weather warmed up and men could get work. But this time, after Easter, when the queues typically withered, the homeless and hungry were still waiting their turn for bread. As author Sherwood Anderson explained, “Our streets are filled . . . with men new to the art of begging.”
The response to this sudden scourge was makeshift. New York City Police conducted a door-to-door survey of the hungry and set up food distribution depots for families in need as the city’s teachers also dispensed relief to malnourished children. Princeton University’s collegiate eating clubs sent their table scraps to the unemployed, the gangster Al Capone opened a soup kitchen in Chicago, well-to-do women in St. Louis delivered uneaten food from restaurants, and a New York philanthropist named “Mr. Glad” drove his truck around the city, handing out sandwiches and coffee to the out of work.
Few knew exactly how many were jobless because the federal government did not systematically collect those statistics. Many, including Roosevelt, then the governor of New York, suspected as early as January 1930 that the number was rising far faster than the Hoover administration was willing to admit.
“One doesn’t improve the conditions of a sick person by telling him how sick he is,” explained Hoover’s secretary of labor. Hoover himself said in a statement in March, “All evidences indicate that the worst effects of the crash upon unemployment will have passed during the next sixty days.”
But families didn’t need statistics to know that their own resources were proving inadequate. Herbert Benjamin, a young Communist Party leader, said that self-help was “comparable to the relief that a starving dog might get by eating his own tail.” There were even rumors of children chewing on their fingers until they bled.
Hunger spread to farms where a quarter of the country still lived, including African American, Mexican American and other agricultural workers who worked for close to nothing. As a Texas sharecropper said, “I picked all week and made $0.85. I can starve sitting down a lot easier than I can picking cotton.”
In the spring of 1930, a drought in the Mississippi Delta that spread across eight states in the Cotton Belt and Appalachia made things worse, destroying staple crops and subsistence farms alike. Families survived on a diet of salt pork, cornmeal and turnips, eating dandelions when necessary and stealing coal to heat their poorly insulated homes.
Unemployment, once a shameful and private condition, became public. No longer simply out of work, citizens were now afflicted by a collective condition, signaling an evolution from a sense of shame to one of blame.
And their No. 1 target was Herbert Hoover.
In late 1930, with daily evictions in the hundreds, those who lost their homes or faced eviction huddled together in Chicago’s Grant Park, dubbing their makeshift village a Hooverville. That term quickly spread throughout the country, with shanty dwellers in Seattle explaining, “This is the era of Hoover prosperity; let’s call this place Hooverville.”
The newspapers that the homeless used to cover themselves became Hoover blankets and their empty pockets, turned inside out, Hoover flags.
It did not play well when the president, in response to the new phenomenon of men standing on street corners, selling apples for pennies, remarked, “Many people have left their jobs for the more profitable ones of selling apples.” He sounded horribly out of touch.
Demands for relief accelerated. On March 6, 1930, half a million unemployed workers and their supporters turned out in 25 cities to insist on local relief and jobs. Outside the White House, yards away from where the president and the first lady were entertaining guests, demonstrators carried signs that read, “We Demand Work or Wages” and “Fight or Starve.”
Politicians joined the chorus. Governors stepped in to fill the void. In Albany, Roosevelt called an emergency session. “The old remedies are not enough,” he declared.
In the summer of 1931, contemplating a third winter of Depression, he announced that New York would undertake relief, and he created the Temporary Emergency Relief Administration, funded with $20 million, as a matching fund for localities. This was the first time any state government fed the hungry. It was “not as a matter of charity,” said FDR, “but as a matter of social duty.”
Unemployment was as high as 8 million, and workers’ income had fallen nearly in half. Hoover, feeling pressure, finally established the President’s Organization of Unemployment Relief with the unfortunate acronym POUR. But POUR billboards and advertisements, such as one depicting a businessman with his shirt sleeves rolled up ready to take on “Old Man Depression,” did little to help. Exhorting people to “dig deep enough,” to provide necessities did little to actually lessen their pain.
Out of desperation, thousands of out of work autoworkers marched on the Ford Motor Co. with posters that read, “Give Us Work” and “We Want Bread Not Crumbs.” Local police and Ford security opened fire, killing four marchers. No arrests of the shooters were made. Twenty-five thousand joined in the funeral procession.
Forced to act, the president supported the Reconstruction Finance Corporation to issue federal loans to banks, credit unions and other businesses. But that did little for those going hungry on the streets. New York Congressman Fiorello La Guardia derided the measure as the “millionaire’s dole,” supplying federal aid to bankers instead of to the unemployed.
By 1932, the economic situation had bottomed out. One in four Americans was out of work. In the late summer, 25,000 unemployed veterans marched on Washington, demanding early payment of a bonus for their service. But to no avail.
In November, Roosevelt won in landslide, carrying 42 states to Hoover’s six.
Today, we are just weeks into a disaster. With cities closing down, requiring citizens to shelter at home, already millions are blaming the president for not acting sooner and not demonstrating necessary leadership.
In the Great Depression, Americans had their Hoovervilles. In 2020, angry, fearful, frustrated citizens might call their silent cities: Trump Towns.
Soon they are likely to look for a politician who will do more.