Gareth Jones

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The Western Mail. March 31st 1932

A Welshman Looks at America (Second Article)

Amazing Poverty Amid Glut of Gold.

Mr. Gareth Jones vividly describes the revulsion of feeling against the politicians following the great American crash.

  By Gareth Jones.  

TOWARDS 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.

But 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.

If the 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 the 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.  








Dollar,  Yo-Yo.


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