Somehow, families survived Depression
talk of the "Great Depression" mainly because of its impact and
"It was so terrible," one Eau Claire farmer said, "we almost had to sell our farm; but somehow we made a go of it."
An Eau Claire banker said: "No one would have predicted such a depression. The best expected prosperity to come to an end in September, 1929.
Signs indicate slump
Herbert Hoover's first days as president, there were signs of vast change in the
economy: residential construction slumped and business expenditure for capital
improvements started to drop.
Those signs were mostly ignored as people were caught up in the tremendous rise in the stock market. Speculative forces were getting out of hand and pushed the market to record highs each week.
On Oct. 24, 1929, known as "Black Thursday," 13 million shares of stock were sold and prices dripped faster than ever before in history.
Butter price cut in half
Eau Claire farmer said butter which usually sold for 30 cents a pound, plummeted
to 16 cents a pound.
The stock market crash started a downward movement which in tow years wiped out two-thirds value of all listed securities, led to immediate demand for repayment of loans and a vast financial contraction.
The crash didn't cause the Depression, but sparked a deflationary spiral as businessmen began to curtail activities.
Foreign trade fell sharply, factories closed, unemployment soared, mortgages were foreclosed, banks failed, dividends were not paid, prices of commodities such as oil, copper and sugar dropped and federal surpluses were turned into deficits. The purchasing power of the nation was paralyzed.
The crash had little effect on Eau Claire during the first quarter of 1930. Until March, business in the city was better than it had been for several years.
However, things got worse.
Bank suspensions in the U.S. averaged 192 per month in 1931. On Sept. 22, 1931, Union Savings Bank in Eau Claire failed to open. Eau Claire State Bank and Eau Claire Savings Bank were soon forced to close.
However, Union National Bank never closed. The bank issued a statement Sept. 22: "We have no borrowed money, do not owe a dollar and have immediate cash resources of $1.5 million."
Attempted to aid needy
early days of the Depression, civic groups worked to provide food and money for
the needy. The Chamber of Commerce acted as a clearing house for registration
of the unemployed. The Elks collected potatoes at a children's movie and
distributed them to the needy.
Firemen repaired toys for children. The Community Chest started a movement to raise a $100,000 job fund.
During the winter of 1931-32, the first federal relief projects were initiated.
Sam Nutter, poor commissioner in Rice Lake, told a Rotary group that every person asking for relief "should be put to work at a dollar a day for six days a week. Some say that this will give the city a name of being cheap. I'd rather give it the mane of a cheap city, than a city that is broke."
Nutter also attacked the country's lack of leadership and high taxes. "In the panics of years ago, my father had a fine farm of 160 acres and he did not get much for his products, but his taxes were only a few dollars. While today if I made $1 a day, it would take me nearly a year to pay the taxes on my business."
Relief funds go fast
the first relief projects in Eau Claire was opening Gray Street hill. By
mid-December, 1931, 150 men had city relief jobs. But four months later all
relief funds had been exhausted.
The year 1932 was the worst of the Depression years for Eau Claire. More than 200 farmers marched in front of the courthouse, asking men and teams of horses instead of motor patrols be hired for patrolling country roads. Some wanted to work out taxes they were unable to pay.
City employees had to take a 10 percent pay cut. The county board reduced teachers' pay by 7.5 percent to 17.5 percent. By March, 1933, more than 18 percent of the city was on relief rolls.
The City of Eau Claire tried to lend a hand by setting up a gardening cooperative in which persons worked one day a week for 25 weeks in gardens owned by local companies and received produce.
The city processed grocery orders for the unemployed and also leased a 20-arcre wood lot in which the jobless could cut wood for the Winter's fuel.
Under the National Industrial Recovery Act in August of 1933, the jobless were given such work as building a new bridge across Half Moon Lake and designing an athletic field at Carson Park.
The first project approved two years later under the Works Progress Administration was construction of a band shell at Owen Park.
A public report in 1935 showed only two men in Eau Claire - E. R. Hamilton, president of National Pressure Cooker, and Barney Johnson, president of a company by the same name - had annual salaries of more than $15,000.
Despite all this relief, Eau Claire's economy still was in bad shape in January, 1936. In that month, warrants were issued against 200 city people for delinquent state income taxes.
A year later the Depression had faded and 18 industrial plants in the city were at all-time highs for employment and wages. The weekly average wage was $22.69.
What caused the Depression?
economic experts agree that during the 1920s as production increased, little of
the profit went to workers and farmers and too much went into construction of
new factories that produced more goods than consumers could buy. One-third of
all personal income went to five percent of the population.
Part of corporate profits went into building plants overseas, but he rest of the world also was unable to buy those goods.
Experts agree the federal government had unsound monetary policies. The tax program failed to reduce inequality in income and increased consumption. Thee were no limits on securities. Nothing had been done to increase the farmers' purchasing power. Tariff policies hindered foreign trade.
Holding companies and banks were poorly organized. Runs on banks were contagious. The government attempted to balance the budget and keep the nation on the gold standard.
However, those policies were deflationary and deflation started the downward movement.
Whenever anyone is asked about the Great Depression, the same response keeps popping up: "They were hard times; harder than any time I ever lived through."
Extracted from the Eau
Claire Leader Telegram
Special Publication, Our Story 'The Chippewa Valley and Beyond', published 1976
Used with permission.