Monday, October 20, 2008

Depression-Era Reading Rundown

Over the last several months, my reading list has been predominantly decorated with titles related to history and economics. I'd like to spend a few moments discussing a couple of the more notable titles, because I suspect that there are a least of handful of my readers who might be interested in the perspective.

Please note that while the four books I'm discussing are very much Great-Depression-related, this does not mean that I'm expecting another Great Depression — or even a Greater Depression. The simple truth is that I have no idea what's coming, and how much more difficult (if at all) things might get.

Suffice to say that over the last year, I've done my share of research and idea-swapping regarding the current credit crisis. At present, put simply, I have scant faith in CEO bankers and bureaucrats to "do the right thing" for anyone other than themselves. The rest of us simply get to plan as best we can, mostly hoping that The Benevolent Fist of Government™ (a term coined, as best I can tell, by a CR reader) doesn't smash to bits something we actually need. (Like trust in free markets, for instance. And trust in financial institutions, for another.)

Anyhow ... on to the books.

The Great Crash, 1929, by John Kenneth Galbraith
If you're looking for the most highly-acclaimed and well-written macro rundown of the 1929 stock market crash, this is your bullseye. The Great Crash, first published in 1955, is absolutely fascinating, and worthy of multiple re-reads. Galbraith's take on the stock market collapse is, for lack of a better term, stunningly literary.

The values of a society totally preoccupied with making money are not altogether reassuring. During the summer, the Times accepted the [advertising] copy of a dealer in the securities of the National Waterworks Corporation, a company which had been organized to buy into city water companies. The advertisement carried the following acquisitive thought: "Picture this scene today: If by some cataclysm only one small well should remain for the great city of New York — $1.00 a bucket, $100, $1,000, $1,000000, then the man who owned the well would own the wealth of the city." All cataclysmically minded investors were urged to get a long position in water before it was too late.

And I love this snippet:

Mr. Mellon did not know [if prosperity would continue into 1929]. Neither did any of the other public figures who then, as since, made similiar statements. These are not forecasts; it is not supposed that the men who make them are privileged to look farther into the future than the rest. Mr. Mellon was participating in a ritual which, in our society, is thought to be of great value for influencing the course of a business cycle. By affirming solemnly that prosperity will continue, it is believed, one can help insure that prosperity will in fact continue. Especially among businessmen, the faith in the efficiency of such incantation is very great.

The Great Crash is a page-burning read, and folks ways smarter than me have hailed it as a historical and economics classic. All such compliments are deserved ... and then some.

Rainbow's End: The Crash of 1929, by Maury Klein
Klein's 2001 retelling of the crash is much longer and more detailed than Galbraith's, and not quite as easy a read. Its day-by-day rundowns are almost footnoted into oblivion, which I suppose appeals to the truly over-the-top economics geeks among us. Most other readers, looking for good writing and timeline flow, will probably either put the book down for good or else shrug their way through it.

Rainbow's End begins its story well before 1929 (think early Coolidge years) and ends with a prologue discussing 1930. It's much more of a blow-by-blow historical account, and loaded with contemporary anecdotes, than is The Great Crash.

But to some observers the [1920s Florida real estate] frenzy had revealed, as historian George Soule noted, "that large numbers of people were in a mood in which they believed that money could be made almost miraculously out of the mere growth of the country." That mood or fever had run its course in Florida, at least for a time, but it did not go away. Instead it found another promising venue in which to pan for instant gold. The fact that the collapse had scarcely ruffled the nation's economy reassured those in financial markets who recognized that stocks rather than real estate were fast becoming the best game around. As the Florida rainbow vanished, leaving as always far more losers than winners in its wake, it was no accident that yet another rainbow began taking shape at almost the same time in faraway New York City.

The Forgotten Man: A New History of the Great Depression, by Amity Shlaes
Recently issued in paperback, Shlaes' Forgotten Man focuses largely on government's policy reactions to the Depression as it unfolded, spread, and took its seemingly endless hold. There's a lot of info here on the people behind the story — bureaucrats, politicians, and various other unwilling economists, I mean — and not quite as much on the Forgotten Man himself. I was rather hoping the book would lean the other way, given its title.

Here's a passage where Shlaes discusses how towns and other entities took to issuing their own forms of currency:

Obscure nonprofits and citizens' groups, towns and businesses, were all creating money: the Business Men's Club of Oak Hill, West Virginia, issued coins. The Lane Bryant Store issued money in Indianapolis, non fifty minutes from Willkie's hometown. City and state governments also got into the money business. The state of Washington issued money, as did the Port Authority in New York and the village of Chatham, New York (its money was orange). Sometimes towns paid their workers in scrip; Hawarden, Iowa, was one. A clothing store owner reported that he "even paid a life insurance premium to a Hawarden agent in scrip." In Inwood, a "Mutual Exchange" on upper Broadway created credit tokens for trading among other exchange members. Thus, for example, a farmer near New Hope, Pennsylvania, asked the exchange to send him workmen. They came and were paid for the construction job with 134 bushels of winesap apples. Some of hte apples were then sold for credits, in order to increase the credits' circulation; some were even converted to jelly, promptly labeled "Barter Brand." "Barter apples, the best you ever ate."

The Forgotten Man is an excellent historical account of the Great Depression. It's also a book which dispels some popular high-school history-class myths. (Herbert Hoover was not a frigid and heartless do-nothing, and FDR's New Deal policies usually had a nasty way of creating more problems than they solved.)

Down & Out in the Great Depression: Letters from the Forgotten Man, by Robert S. McElvaine
What personal stories I didn't get from The Forgotten Man, I was pummeled with in Down & Out. The title tells you precisely what this is — a collection of hundreds of letters written by the people who suffered through the Depression. If you're in the mood to have your heart cut out of your chest, slapped to the ground, and then boot-stomped into mush, well, Down & Out is the read for you. You'll not find any Hallmark material in these pages.

A quick sample of the content, misspellings and all:

March 29 — 1935

Dear Mrs. Roosevelt: I am writing you a little letter this morning. Are you glad it spring I am. For so manny poor people can raise some more to eat, you no what I am writing this letter for Mother said Mrs Roosevelt is just a God mother to the world and I thought mabe you had some old clothes you no Mother is a good sewer and all the little girls are getting Easter dresses And I though that you had some you no papa could wear Mr. Roosevelt shirts and cloth I no. My papa like Mr. Roosevelt and Mother said Mr. Roosevelt carry his worries with a smile you no he is always happy. You no we are not living on the relief we live on a little farm. papa did have a job and got laid on 5 yr ago so we save and got two horses and 2 cows and a hog so we can all the food stuff we can ever thing to eat some time we don't have eni thing but we live, But you no it so hard to get cloth. So I though mabe you had some. You no what you though was no good Mother can make over for me I am 11 year old. I wish I could see you I no I would like you both. And shoes Mother wears 6 or 6-1/2. And papa wear 9. we have no car or no phone or radio papa he would like to have a radio but he said there is other thing he need more. papa is worried about his seed oats. And one horse is not very good. But ever one has't to worrie, I am send this letter with the pennie I get to take to Sunday school Mother give me one so it took 3 week. Cause Mother would think I better not ask for things from the first Lady. But Mother said you was an angle for doing so much for the poor. And I though that would be all rite this is some paper my teacher gave for Xmas. My add is

C. V. B. [female]
Rushsyhania, Ohio

Conversely (and more importantly, I'd argue), if you would like to gain a new and tremendous appreciation for the nowhere-near-disaster economic conditions we've enjoyed in the years since World War II, I can think of no other book which achieves it with such brutal efficiency.

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— Posted by Michael @ 9:02 AM


You might want to consider reading "The Worst Hard Time" by Timothy Egan (2006). It focuses on the Dust Bowl but talks quite a bit about the Depression and the governments response to the ongoing drought etc. With the other reading you've done, it would be easy for you to tie it all together. It was pretty much all new info for me since I'm pretty sure I wasn't paying attention in school if they talked about any of it.
I enjoy your blog.


I'm reading The World in Depression, 1929-1939 by Charles P. Kindleberger (interlibrary loan) which has a bit different spin.


@ Doubtisgood:

Thanks for the suggested title; I'll look into that one. I actually DID pay attention to history in high school -- liked it quite a bit -- but you can only get so much appreciation of it from the history-class macro view. As I read these books now, being an adult, the depth and clarity are just on another level.

@ Teri:

So what do you think about the book? Is it very good?


It seems to be good. I haven't read many depression books that take a global viewpoint.

Also, if you want a read from the poor man's point of view, I really enjoyed "Ava's Man" by Rick Bragg.

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