History has an interesting way of using the past to reflect the future. I was deep into a research project about the Great Depression, the implosion of the American auto industry and an era of dramatic societal as well as technological transition when I stumbled on a fascinating article published in The New Yorker back in January 2020. In a paragraph about the collapse of established and fledgling democracies during the years between the world wars there was a line that appeared before me as though it were written in neon. “American democracy, too, staggered, weakened by corruption, monopoly, apathy, inequality, political violence, hucksterism, racial injustice, unemployment, even starvation.”
It is a lengthy but thought provoking read that I highly recommend. Likewise with an interesting book, Breaking the Banks In Motor City: The Auto Industry, The 1933 Detroit Banking Crisis and the The Start of the New deal by Darwyn H. Lumley.
The first major blow to the diverse American auto manufacturing industry came with the post WWI recession magnified by the restrictions, and deaths, that resulted from the Spanish fly pandemic. Dozens of automobile companies closed their doors between 1918 and 1925. Agricultural prices collapsed. There were more bank closures, especially in rural communities, during this period than during the Great Depression.
There were 1,350 bank failures in 1930. More than 2,200 followed the following year, and another 1,400 in 1932. The auto business and related industries were the largest single employment segment of the economy in 1930. Imagine the ripple affect when sales plummetted.
From 1929 to 1932, General Motors sales fell from 1,353,059 vehicles to 432,830. Ford and Lincoln sales during this period dropped a full 80%. Hudson sales fell more than 70%.
With no coordinated national safety net, the loss of employment quickly became a literal life and death situation for families. In Detroit during the winter of 1932, hundreds of people literraly starved to death. Dozens of others froze to death in their apartments and homes.
The very fabric of American society was threatened. The Bonus Army, WWI veterans together with their families and affiliated groups gathered in Washington, D.C. in mid-1932 to demand early cash redemption of their service bonus certificates that were to be paid in 1945. President Hoover ordered the encamped veterans moved and in the ensuing confrontation, several were killed. Labor riots turned violent and bloody. President Roosevelt pushed for implementation of programs such as social security, citizens conversation corps, and works progress admistration as well as public works projects such as the construction of Hoover Dam. These endeavors were radical, and were fought vehemently with arguments that these socialist programs would be the ruin of the country, the end of the constitutional republic.
It was a tumultous era. The country survived, but it was forever altered. The world was never the same. Tangible links to this pivotal period in history remain. Social security. Sidewalks stamped WPA in towns throughout the country. The cabins in Hualapai Mountain Park near Kingman, Arizona built by the CCC. Hoover Dam.