2000-04-19 - 23:50:51

April 19, 2000

How was it ?

Young lad I'll try draw a picture that a young fellow can understand. As near as I can understand it. Egg heads are still quibbling as to the cause of it.

It was 1929, I was eight years old and already reading things in the paper and asking Dad or Mom to explain this, that or the other thing to me. I was at the witch's house when I heard frantic words over the radio that I couldn't understand. The witch couldn't understand or explain it to me. But from what little I could understand something terrible happened at the stock market in New York City.

Dad told me that the stock market basically went broke. Well son, stock is what companies and corporations sell to get money to build, expand or what ever they need to do. Back then they even paid dividends on shares of stock. One thing back in the twenties that I could understand was a person could buy stock on margin, which for instance a hundred dollar share could be bought for ten dollars, but if the value of that share would drop below one hundred dollars, the stock owner had to pay ninety more dollars to cover the agreed on price. Many fortunes were made by little people buying stock on margin and pyramiding by selling stock they had bought at x for an outrageously high price when the stock market rose. But the whole edifice of commerce began to totter and lose ground, the value of shares would drop and start an avalanche of financial trouble. That is about as simple an explanation I can give, not really being educated on those matters I am not sure that I have a firm grasp on it either.

Consequently, money was not coming into the businesses and every thing was slowing down, like your bicycle when you stop pedaling, you start to slow down, slower and slower until you grind to a complelte stop. If the energy you used to run your bicycle is compared to money buying stocks - - - when the money stops, so does all activity.

Employment went from hire pattern to a layoff pattern. There weren't materials to work with or money to buy them, because their stocks sold at high price on that damnable margin had brought in at the best only ten percent of that in actual money. Nothing to manufacture, no inventory, no one to sell to if the miracle had happened. You don't understand, eh? Well lets go a bit simpler, suppose you were running a paper route, and that you had to pay five cents a copy, and later collect ten cents a copy from your customer. If he couldn't pay you and you could not afford to keep delivering his paper for nothing, and that happened with many of your customers. If you were not getting the money owed by the customer, you were losing money and so was the paper, soon you couldn't afford to buy the paper that the publisher couldn't afford to print. That is what happened. Most business came to a halt or stood marching in place with caretaking staff on the premises, furnaces cold, mills not running. Our people were out of work and couldn't find work. Many people went hungry, semi-naked bare footed in order to survive at all. During the depression another calamity came to us. The dust bowl, this is another thing still being debated. Your position depends on your politics. However, drouth came to most of our country, no water, no crops, fertile soil dried out and blew away, millions of acres of it leaving the hard unnurturing soil exposed. Cattle died of starvation, people began to have sicknesses because of their poor diet. Our country had come almost to it's knees, until a few statesmen got together under a strong leader and figured out ways to get things going again. They put these in effect and gradually these businesses had the means to buy raw material, hire help back again fire up the furnaces and go back to work. Recovery was difficult and slow. We were well enough on recovery's path that we were able to survive World War 2.

Well guy, its our bedtime so let's go to bed now and if you re still interested tomorrow, we can talk some more. G'night, gimme a hug grandson

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