The Representative Quotes section is unusually long because this book is full of nuggets of wisdom written by someone in the midst of the Great Depression, not after the fact. I want to keep a record of what I learned for future reference.
I've preserved numerous spelling and grammar errors that appeared in the original diary (and, therefore, in the published work).
Knowing more about the Great Depression has helped me better appreciate elements of our popular culture like the songs Happy Days are Here Again (1929, pre-Depression, with Barbra Streisand's post-Depression, post-WWII performance in 1962) and Somewhere Over the Rainbow (1939).
Roth, Benjamin. The Great Depression: A Diary. PublicAffairs, 2009.
Representative Quotes
"In 1929 when the crash came all sorts of people were into the market on margins over their heads - doctors, lawyers, merchants, bootblacks, waitresses, etc. They bought stocks on tips, did not know what the company sold or made and did not know how to investigate a stock even if such a thought had occurred to them." (p. 6)"June 5, 1931: The sheriff has been selling recently at public sale many vacant lots on which accumulated taxes amount to $500 or more. At these sales the lots are selling as low as $25 apiece clear of taxes. One of my clients bought ten of them ranging from $10 to $50. Of course they are mostly located in undesirable neighborhoods. Another client had 10 buildings razed because he could not collect rents and the taxes are exorbitant. This is a popular way to reduce taxes.... The constant supervision required by real estate, the costly upkeep, its illiquidity, the danger of a deficiency judgment - all have cooled me considerably." (p. 9)
"July 30, 1931: Magazines and newspapers are full of articles telling people to buy stocks, real estate etc. at bargain prices. They say that times are sure to get better and that many big fortunes have been built this way. The trouble is that nobody has any money." (p. xii)
"August 9, 1931: Professional men have been hit hard by the depression. This is particularly true of doctors and dentists. Their overhead is high and collections are impossible. One doctor smoothed a dollar bill out on his desk the other day and said that was all the money he had taken in for a week." (p. xii)
"October 10, 1931: Again and again I am forced to the conclusion that in prosperous times a man must be cautious and preserve his capital and be careful not to over-expand his business or to go too deeply into debt relying on a continuation of good business to pay the debt. In time of depression a man can be brave and if the depression is nearing an end he can invest his money or expand his business or open a new business with confidence that he is facing 5 or 10 years of prosperity. He can feel sure that the road will be up - not down. Many great and prosperous businesses were founded on the ruins of depression....
"A great many losses and failures in business and in investment are due to the reversal of this policy. At the height of prosperity they rush in to buy stocks or real estate or businesses and assume enormous indebtedness which can be liquidated only if the boom spiral mounts higher and higher. Then comes an abrupt end to prosperity - a crash - and down go these businesses and investments purchased at top prices. If the purchase was made mostly with borrowed capital as so often happens - then you can write finis to the chapter." (p. 28)
"April 6, 1936: I read an interesting thing today about Floyd Odlum and the building up of his Atlas Investment Trust. Started with $40,000 in 1924 - ran it up to a million in 1929. Sold out for cash and held on to cash until the bottom of depression was reached in 1932. With his cash he bought heavily in 'special situations.' Mostly in investment trusts hard up for cash. Stocks in these trusts were selling for less than 50% of their asset values. Since the assets were stocks quoted at depression levels - the buyer of such an investment trust bought the assets at 1/2 of depression values. He then held on and later liquidated at huge profits. He never took over the active management of a business but sold the stock to those who could run it. There were many such 'special situations' during the depression. He was actually buying stocks under the hammer. The same thing happened with railroads and other companies such as Continental Shares when they went into receivership. The person who had enough money to liquidate them could have had the assets for a song. Same principle as buying real estate at a foreclosure sold for price of the mortgage. Assets of the Atlas Corporation are now over $100,000,000 and they have literally become private bankers." (p. 171)
"April 28. 1936: For the last two weeks the stock market has been slowly sinking. Yesterday a bad break brought losses ranging as high as 10 points. It is funny how when the stock market is rising every piece of news is regarded optimistically and bad news is ignored. Now the reverse is true." (p. 171)
"August 24, 1936: It is an interesting sidelight on this depression that many companies which went into receivership during the depression are now being reorganized. In most cases the common stock was wiped out but bonds or preferred are good. In 1933-4 these preferred stocks could be bought for as low as 25 cents per share ($100 par) and are now worth as high as $14 (Continental shares). Here again a man with liquid capital and courage could have made a fortune on a comparatively small investment. Some who bought at low prices did not have the courage to hold on and sold at a nice profit of $4 or $5 per share. The real winnings went to those who held onto the receivership shares throughout the whole reorganization." (p. 176)
"January 2, 1937: "1932-1936 were bad depression years for the lawyer and even tho prosperity has returned for most people it has not yet returned for the lawyer. It will be a year or more before people will have enough money to buy real estate and do other things that require a lawyer. The lawyer who specialized in bankruptcies, receiverships and reorganizations reaped a harvest throughout the depression....
"Cash is king in every depression. A small investment in real estate or stocks or bonds in 1932 would be worth a fortune today.... Even though good stocks, bonds, and real estate were selling at giveaway prices but few men had both the cash and the courage to buy when things looked the blackest.
"When the final upturn came in 1935 it came very quietly and suddenly and kept going up.... the full effect cannot be appreciated unless you look back to see what progress was made in 1935-1936.
"During past depressions prominent bankers, business men, etc. were all wrong in most of their predictions. Use your own judgment and do your own thinking." (p. 194)
"March 11, 1937: President Roosevelt is still hell-bent for reform and his latest proposal is to pack the Supreme Court so it will hold constitutional his New Deal laws." (p. 197)
"October 12, 1937: During the past 2 years of general recovery, the law profession lagged behind. We are still badly in debt and have not yet had a chance to recover. It has been a long, hard pull." (p. 201)
June 24, 1938: Stock prices have continued straight up for more than a week now and many gains amount to 50% or more. Just as in 1932 the rise came after a lull of several weeks and a falling down in volume of sales - but no indication of improvement in business indices. It caught the economists flat-footed.
"Both 1932 and 1938 indicate there is no way to catch the bottom of the swing because it comes without warning. When liquidation has dried up and the situation looks hopeless - that is the turn. Your guess is as good as anybody's." (p. 213)
"July 20, 1938: In this depression at least the stock upturn came several weeks before business indexes showed any improvement. For the past two weeks these indexes have been turning slowly up. At the time of the stock market upsurge the indexes were very slowly moving down and some were stationary. Same with stocks. Volume was low and there were many indications of a sold-out market." (p. 214)
"March 10, 1939: Talked to W.W.Z. today. He said: During the past 10 years I lost half my life savings in local banks and corporations. The directors were personal friends and they advised my investments. I thought they were high-minded men and would look after the business. When the companies were broke I found out they had protected themselves and nobody else. If I had to do it over again I would invest only in outstanding national corporations with stocks listed on the N.Y. Exchange so I could sell when trouble threatened." (p. 216)
"October 16, 1940: From time to time people tell me of their experience in the stock market. For the most part they were within reach of large profits but did not take them. Dr. S.D. said: In 1929 I held $180,000 in stocks subject to a 40% margin. The crash caught me and I rushed in to sell but my broker strongly advised against it. Later I had to put up $10,000 additional margin. I finally sold out in 1930 and salvaged only the $10,000 margin. I put this $10,000 in the Home Savings Bank. It closed in 1931. In 1932 when the market was at low ebb I sold my pass book on the Home Savings for $4000 - and bought high grade stocks at 1/10 their real value. I determined to hold these until the market came back to normal. I did hold on until the first part of 1935 but then I needed money so badly I sold these stocks for about $10,000. Six months later these stocks shot sky high and I would have made an extra $50,000 if I had been able to hold on." (p. 235)
"July 9, 1941: As usual the law profession drags along in the vanguard and has reflected very little of the war boom." (p. 248)
"December 15, 1941: Stocks are selling today on a 20% earning basis. Even if taxes go higher they are a good buy for the long pull." (p. 251)
"December 31, 1941: This is the craziest business year I have ever been through. We are at war, steel mills have been humming, wages are high and everybody working - yet my law practice was worse in 1941 than in 1940. Because of war, high taxes, threat of inflation, government restrictions, etc. etc. business men are afraid to expand, buy real estate or do anything constructive and there is very little for the lawyer except an occasional divorce case or other domestic business.... Some businesses do record business and others go broke. It is all a matter of luck. Auto dealers sold a record number of cars in 1940 and now there are no tires to sell. Tires have been rationed - so dealers in new tires are out of business while second-hand dealers and re-treaders are busy. There may be a few people who are making money but I do not know who. This is truly a 'profitless' prosperity and it takes a strong heart to remain in business." (p. 252)
SAT Vocabulary Words
Racketeer: a person who engages in dishonest and fraudulent business dealings.
"Youngstown's steel industry was booming again, and racketeers were getting rich on illegal gambling." (p. x)
Receivership: the state of being dealt with by an official receiver.
Receiver: a person or company appointed by a court to manage the financial affairs of a business or person that has gone bankrupt.
"Fannie Mae and Freddie Mac had to be taken into receivership [in 2008]." (p. xii)
Kitty-cornered (cater-cornered): situated diagonally opposite someone or something.
"Visit the nicely appointed library or historical society at Youngstown (they are partically kitty-corner across Wick Avenue from one another)" (p. xx)
Palimpset: a manuscript or piece of writing material on which the original writing has been effaced to make room for later writing but of which traces remain.
"As if constructing a kind of economic palimpset, Roth would occasionally go back and annotate his earlier entries and did not hesitate to prove himself wrong." (p. xxi)
Rouge: a red powder or cream used as a cosmetic for coloring the cheeks or lips.
"in the latter stages of the [1922-1929] delerium [women] wore their stockings rolled and their bare knees rogued" (p. 4)
Scalper: a person who resells shares or tickets at a large or quick profit.
Par: the face value of a stock or other security, as distinct from its market value.
"The scalper then sold these bonds on the market at par and with the money scalped some more bonds." (p. 6)
Pot: a toilet.
"June 28, 1962: The U--- family bought half of East Federal St. at sheriff sales in the 1930s. However down-town real estate has gone to pot because of the growth of suburban shopping centers. The U--- family still owns half of E. Federal St. but the buildings are empty and cannot sell." (p. 13)
Rabid: having or proceeding from an extreme or fanatical support of or belief in something.
"He was particularly rabid against his investments in real estate." (p. 17)
Stogy: a long, thin, inexpensive cigar.
"2 for 5 stogies are again in popular favor" (p. 20)
Vicious: (of language or a line of reasoning) imperfect; defective.
"This scarcity of money is what makes people think if more money were printed business would be better. This is a false and vicious theory." (p. 24)
Millinery: women's hats.
"millinery store" (p. 25)
Fraternity: a group of people sharing a common profession or interests.
"The whole banking fraternity is in public disfavor" (p. 26)
Bated: in great suspense; very anxiously or excitedly.
"with bated breath we asked 'What next?' " (p. 32)
Ways and means: the methods and resources at someone's disposal for achieving something.
"a meeting... to consider ways and means.... the choir has been fired and other economies affected but this does not seem enough" (p. 41)
Go to the wall: (of a business) fail; go out of business.
"Many old businesses are going to the wall" (p. 44)
Dub: give an unofficial name or nickname to (someone or something).
"dubbed themselves the Bonus Expeditionary Force" (p. 51)
Extraction: the ethnic origin of someone's family.
"of German extraction" (p. 56)
Plead: present and argue for (a position), especially in court or in another public context.
"pleading 'state rights' on the Prohibition question" (p. 63)
Shantytown: a deprived area on the outskirts of a town consisting of large numbers of crude dwellings.
"burned down the shantytown where some 15,000 veterans had camped" (p. 65)
Semi-annual: occurring twice a year; half-yearly.
"unfavorable semi-annual reports" (p. 66)
Thrall: the state of being in someone's power or having great power over someone.
"nearly one-third of the value of farms was in thrall, mainly to banks and insurance" (p. 79)
Magnate: a wealthy and influential person, especially in business.
"car magnate Henry Ford" (p. 90)
Indict: formally accuse of or charge with a serious crime.
"Indictment of bankers and investigations are the order of the day." (p. 104)
Terrific: of great size, amount, or intensity.
"Everything depends on the President. It is a terrific responsibility." (p. 108)
Brain trust: a group of experts appointed to advise a government or politician.
"Pres. Roosevelt's advisers are a group of college professors called 'the brain trust.' " (p. 116)
Piece work: work paid for according to the amount produced.
"the girls claim they work long hours on piece work" (p. 116)
High finance: financial transactions involving large amounts of money.
"A great deal of rotten-ness in high finance has been discovered." (p. 119)
Come to a head: reach a crisis.
"I believe the issue of more direct inflation will come to a head soon. In the meantime my law practice remains stagnant while commodity prices go up at a dizzying pace." (p. 131)
Tory: an American colonist who supported the British side during the American Revolution.
"The U.S. Chamber of Commerce takes a public stand against President Roosevelt's gold policy and demands a return to sound money and the gold standard. The President strikes back by calling them a bunch of 'tories.' Remembering that George Washington would not accept Continental currency in his business dealings I do not quite see the parallel implied by the use of the term." (p. 140)
Ejectment: the action or process of evicting a tenant from property.
"Radical socialism seems rapant in every class of society but mostly ministers and college professors. This has spread to the working class. They no longer ask for favors but 'demand' government work, cancellation of mortgages, reduction of debts, etc. They feel the courts will not permit foreclosure of mortgages or ejectments, etc." (p. 156)
Demagogue: a political leader who seeks support by appealing to popular desires and prejudices rather than by using rational argument.
Panacea: a solution or remedy for all difficulties or diseases.
"the voice of the demagog began to be heard throughout the land. Socialism, Communism, more equitable distribution of wealth, new currency and other panaceas became ordinary table talk." (p. 159)
Avarice: extreme greed for wealth or material gain.
"avaricious and not satisfied with a fair investment return" (p. 179)
Scurrilous: making or spreading scandalous claims about someone with the intention of damaging their reputation.
"scurrilous anti-Semitic literature" (p. 182)
Pump-priming: the stimulation of economic activity by investment.
"March 1, 1938: After 8 years of pump-priming and other trick methods of bringing back prosperity, it is my conclusion that none of them are any good. In our capitalistic system we must let the forces of competition and demand and supply work things out in a natural way. No man or group of men is smart enough to control prices or supply and demand or currency in a nation so large as ours." (p. 210)
Cash and carry: a system of wholesale trading whereby goods are paid for in full at the time of purchase and taken away by the purchaser.
Embargo: an official ban on trade or other commercial activity with a particular country.
" 'cash and carry' embargo" (p. 223)
Ebb: (of an emotion or quality) gradually lessen or reduce.
"morality and religion have been at a low ebb" (p. 225)
Bait: torment (a trapped or restrained animal), especially by allowing dogs to attack it.
"Wilkie [FDR's opponent in the Presidential election] promises to hold on to the social gains but to put a stop to the baiting of big business; to the trend toward government ownership and national socialism." (p. 236)
Firm: (of a price) rise slightly to reach a level considered secure.
"a firming of money rates" (p. 240)
Harden: (of prices of stocks, commodities, etc.) rise and remain steady at a higher level.
"interest rates will not harden in the next 6 months" (p. 243)
"Youngstown's steel industry was booming again, and racketeers were getting rich on illegal gambling." (p. x)
Receivership: the state of being dealt with by an official receiver.
Receiver: a person or company appointed by a court to manage the financial affairs of a business or person that has gone bankrupt.
"Fannie Mae and Freddie Mac had to be taken into receivership [in 2008]." (p. xii)
Kitty-cornered (cater-cornered): situated diagonally opposite someone or something.
"Visit the nicely appointed library or historical society at Youngstown (they are partically kitty-corner across Wick Avenue from one another)" (p. xx)
Palimpset: a manuscript or piece of writing material on which the original writing has been effaced to make room for later writing but of which traces remain.
"As if constructing a kind of economic palimpset, Roth would occasionally go back and annotate his earlier entries and did not hesitate to prove himself wrong." (p. xxi)
Rouge: a red powder or cream used as a cosmetic for coloring the cheeks or lips.
"in the latter stages of the [1922-1929] delerium [women] wore their stockings rolled and their bare knees rogued" (p. 4)
Scalper: a person who resells shares or tickets at a large or quick profit.
Par: the face value of a stock or other security, as distinct from its market value.
"The scalper then sold these bonds on the market at par and with the money scalped some more bonds." (p. 6)
Pot: a toilet.
"June 28, 1962: The U--- family bought half of East Federal St. at sheriff sales in the 1930s. However down-town real estate has gone to pot because of the growth of suburban shopping centers. The U--- family still owns half of E. Federal St. but the buildings are empty and cannot sell." (p. 13)
Rabid: having or proceeding from an extreme or fanatical support of or belief in something.
"He was particularly rabid against his investments in real estate." (p. 17)
Stogy: a long, thin, inexpensive cigar.
"2 for 5 stogies are again in popular favor" (p. 20)
Vicious: (of language or a line of reasoning) imperfect; defective.
"This scarcity of money is what makes people think if more money were printed business would be better. This is a false and vicious theory." (p. 24)
Millinery: women's hats.
"millinery store" (p. 25)
Fraternity: a group of people sharing a common profession or interests.
"The whole banking fraternity is in public disfavor" (p. 26)
Bated: in great suspense; very anxiously or excitedly.
"with bated breath we asked 'What next?' " (p. 32)
Ways and means: the methods and resources at someone's disposal for achieving something.
"a meeting... to consider ways and means.... the choir has been fired and other economies affected but this does not seem enough" (p. 41)
Go to the wall: (of a business) fail; go out of business.
"Many old businesses are going to the wall" (p. 44)
Dub: give an unofficial name or nickname to (someone or something).
"dubbed themselves the Bonus Expeditionary Force" (p. 51)
Extraction: the ethnic origin of someone's family.
"of German extraction" (p. 56)
Plead: present and argue for (a position), especially in court or in another public context.
"pleading 'state rights' on the Prohibition question" (p. 63)
Shantytown: a deprived area on the outskirts of a town consisting of large numbers of crude dwellings.
"burned down the shantytown where some 15,000 veterans had camped" (p. 65)
Semi-annual: occurring twice a year; half-yearly.
"unfavorable semi-annual reports" (p. 66)
Thrall: the state of being in someone's power or having great power over someone.
"nearly one-third of the value of farms was in thrall, mainly to banks and insurance" (p. 79)
Magnate: a wealthy and influential person, especially in business.
"car magnate Henry Ford" (p. 90)
Indict: formally accuse of or charge with a serious crime.
"Indictment of bankers and investigations are the order of the day." (p. 104)
Terrific: of great size, amount, or intensity.
"Everything depends on the President. It is a terrific responsibility." (p. 108)
Brain trust: a group of experts appointed to advise a government or politician.
"Pres. Roosevelt's advisers are a group of college professors called 'the brain trust.' " (p. 116)
Piece work: work paid for according to the amount produced.
"the girls claim they work long hours on piece work" (p. 116)
High finance: financial transactions involving large amounts of money.
"A great deal of rotten-ness in high finance has been discovered." (p. 119)
Come to a head: reach a crisis.
"I believe the issue of more direct inflation will come to a head soon. In the meantime my law practice remains stagnant while commodity prices go up at a dizzying pace." (p. 131)
Tory: an American colonist who supported the British side during the American Revolution.
"The U.S. Chamber of Commerce takes a public stand against President Roosevelt's gold policy and demands a return to sound money and the gold standard. The President strikes back by calling them a bunch of 'tories.' Remembering that George Washington would not accept Continental currency in his business dealings I do not quite see the parallel implied by the use of the term." (p. 140)
Ejectment: the action or process of evicting a tenant from property.
"Radical socialism seems rapant in every class of society but mostly ministers and college professors. This has spread to the working class. They no longer ask for favors but 'demand' government work, cancellation of mortgages, reduction of debts, etc. They feel the courts will not permit foreclosure of mortgages or ejectments, etc." (p. 156)
Demagogue: a political leader who seeks support by appealing to popular desires and prejudices rather than by using rational argument.
Panacea: a solution or remedy for all difficulties or diseases.
"the voice of the demagog began to be heard throughout the land. Socialism, Communism, more equitable distribution of wealth, new currency and other panaceas became ordinary table talk." (p. 159)
Avarice: extreme greed for wealth or material gain.
"avaricious and not satisfied with a fair investment return" (p. 179)
Scurrilous: making or spreading scandalous claims about someone with the intention of damaging their reputation.
"scurrilous anti-Semitic literature" (p. 182)
Pump-priming: the stimulation of economic activity by investment.
"March 1, 1938: After 8 years of pump-priming and other trick methods of bringing back prosperity, it is my conclusion that none of them are any good. In our capitalistic system we must let the forces of competition and demand and supply work things out in a natural way. No man or group of men is smart enough to control prices or supply and demand or currency in a nation so large as ours." (p. 210)
Cash and carry: a system of wholesale trading whereby goods are paid for in full at the time of purchase and taken away by the purchaser.
Embargo: an official ban on trade or other commercial activity with a particular country.
" 'cash and carry' embargo" (p. 223)
Ebb: (of an emotion or quality) gradually lessen or reduce.
"morality and religion have been at a low ebb" (p. 225)
Bait: torment (a trapped or restrained animal), especially by allowing dogs to attack it.
"Wilkie [FDR's opponent in the Presidential election] promises to hold on to the social gains but to put a stop to the baiting of big business; to the trend toward government ownership and national socialism." (p. 236)
Firm: (of a price) rise slightly to reach a level considered secure.
"a firming of money rates" (p. 240)
Harden: (of prices of stocks, commodities, etc.) rise and remain steady at a higher level.
"interest rates will not harden in the next 6 months" (p. 243)
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