Western Mail. March 31st 1932
Welshman Looks at America
Amid Glut of Gold.
Gareth Jones vividly describes the revulsion of feeling against the politicians
following the great American crash.
By Gareth Jones.
STREET, NEW YORK.
the end of last April the Ile de France, the most luxurious liner on the
Atlantic, was speeding from Plymouth to New York. One afternoon the cinema
was in full flicker in the vast central ballroom, waiters were moving quietly
through the palm court, small children were shrieking with laughter in the Punch
and Judy Show.
nowhere was there so much drama on the whole boat as in one quiet room where
about thirty men were watching a board on which new figures were being chalked
every second. A telegraph message would arrive and some of the men would
bite their lips as the figures on the board fell lower and lower. Upon
those figures depended their fortunes and the lives of their dependents. It was
the Stock Exchange room.
Riot of Speculation.
“U.S. Steel down to 115!” shouted one man. “I can’t believe it.
Not much more than a year ago it was 261 dollars. It can’t go below
100.” But the stock prices dropped lower and lower and the gloom spread.
Even upon that boat, in the very centre of the Atlantic, the fever of
speculation bad followed its victims. “U.S. Steel down to a hundred
dollars! Impossible!” one of the speculators had said. He was to
see that stock fall to 36 dollars, and cause in its fall the crash of many
fortunes and the disappearance of the life-savings of thousands.
It was this
crash in the Stock Exchange which startled the world in November, 1929, that
first revealed that all was not well. Up to that time thousands of
millions of dollars bad been gambled in a riot of speculation. Banks had
given credit recklessly. Millions of people were in debt, “But what did
it matter?” they thought. “Things are going along swimmingly and we
shall soon be able to pay off. So let us buy some more stocks and another
automobile on credit.”
Panic - and Blind Optimism.
When on the day of the great crash thousands of people seized their telephones
to tell their brokers to sell out straight away there was such a tumble of
prices that panic gripped Wall Street. It was then that some people
realised that the world had been living in a fool’s paradise.
But America was
still blind. “No,” they thought , it is only temporary, just due to
lack of confidence. Our leaders, our business men will soon have the
trouble well in hand.” The leaders proceeded to calm the public.
“Any lack of confidence in the economic future or the basic strength of
business in the United States is foolish,” said President Hoover. In
March, 1930, the Secretary of Commerce stated: “Business will be normal in two
months.” Mr. James J. Davis, Secretary of Labour, of Welsh origin, said:
“Let us be thankful that we are getting back on our feet again.”
Thus the American
people did not realise that tariffs were strangling world trade; that the
thousand million pounds worth of gold in America was obtained at the
impoverishment of the other nations; that war debts and reparations were leading
to Welsh miners losing their jobs and striking a blow at the whole system of
world economics. It was only in 1931 that America grasped the real depth
of the depression, and only when the following facts became clear.
The Steel Collapse.
In America millions of people depend directly or indirectly on the steel
industry. It was in 1931 that the plight of the steel industry made itself
felt. In March production was still 57 per cent. if capacity, but by the
end of the year it had collapsed to 22 per cent.! This all is unparalleled
in economic history. Bethlehem Steel cut down their wages by 10 per cent.
but this fact gives no picture of the situation unless it is realised that most
men only work a few afternoons a week and thus earn perhaps ten to fifteen
dollars (£2 to £3 - but living is dearer) a week, whereas they once earned $25
to $40 a week (£5 to £8).
The plight of
the farmers was as grim as that of the steelworkers. In 1921 the gross
income from farm products amounted to twelve thousand million dollars (£2,4000,000).
In 1930 this figure dropped to nine thousand million dollars and in 1931 it
amounted to 6½ thousand million (£1,300,000,000), that is, not much more than
a half of what was reached in 1929. The net income per farmer, which was
$887 (£175), dropped to $316 (£75) in 1931. But hundreds of thousands of
farmers are deeply in debt and in utter despair.
Rain of Blows.
The shopkeeper is also in a parlous state. When I first landed in
America, last April, and drove through the streets of New York there was one
thing that impressed me almost as much as the towering buildings. That was
the rows of shop-windows with the significant signs: “Forced to sell,”
“Bankruptcy sale,” and “Good-bye, Broadway; must get out!” Prices
have visibly rattled down. In elegant Fifth-avenue jewellers are offering
their ware at 50 per cent, discount.
The banks have suffered from these hard blows. In many towns crowds have
rushed the banks and asked for all their money. Women with not a cent of
cash left to do their shopping for their families have gone to cash a cheque and
have been confronted by the, notice, “Payments suspended.” All their
money tied up in a bank that failed!! In 1931 2,290 banks failed, with
deposits of $1,759,000,000 (£350,000,000). Fearful of the future,
Americans have begun boarding on a large scale.
The Gold Hoarders.
The editor of
one of the world’s great financial papers said in conversation, “Never in
the whole course of history have the stockings, the teapots, and the mattresses
of America been so full of currency as they are to-day.” Yesterday the
economic adviser of one of the greatest financial corporations of Wall Street
told me, “I estimate that one thousand five hundred million dollars (300
million pounds) are now being hoarded by Americans!”
The result of
this fall in living standards and this fear of banks failing have made Americans
lose faith in their leaders. During the period of prosperity the big
business men were heroes, but now they are wallowing in the abuse thrown at them
by the man in the street. Wall Street was once the street of Gold.
The simple man now imagines it to be a lair of robbers who wish to seize all his
cash and lend it to the terrible foreigners at a huge profit. The
businessman and the banker have been thrust down from their pedestal.
Hatred of Politicians
As far as the
politicians are concerned, disappointment at their failure becomes more and more
vociferous as the depression deepens and indeed, it is fully justified.
Americans always despised their politicians, and with reason. It is only
when one sees American polities that one fully appreciates the character, the
ability and the integrity of our Welsh members of Parliament and the merit and
honesty of so many of our Welsh town and county councillors.
Americans have grown to mistrust their own politicians, then their hatred of the
foreign politicians has grown even more rapidly. There has in the last few
months been a wave of extreme isolationist feeling. Many blame Europe for
depression. The man in the street demands that war debts shall not be
cancelled. “The cry, “No entangling alliances,” is repeated time and
time again by the cheap tabloid newspapers. This week in a cinema I heard
Hearst urge the American people to elect a President who would have nothing to
do with providing “loot for Europe.”
Still Friendly Towards Britain.
In spite of this wave of anti-European feeling, sentiment towards Great Britain
is excellent, hospitality to British guests is lavish, and there have been many
tributes to Britain’s financial courage and moral character. In the
midst of world despair it is a pleasure to see that the United States and
Britain have buried the hatchet, and at least one British citizen is grateful to
the American people for the kindness and the warmth of their welcome.