American History Tellers - The Great Depression - The Crash | 1

Episode Date: February 20, 2019

The Roaring Twenties came to a screeching halt on October 29, 1929, with the collapse of the U.S. stock market. A year earlier, president Herbert Hoover had coasted to victory by promising the American people “a chicken for every pot” and “a car in every backyard.” Lured by the promise of skyrocketing markets, many first-time investors got caught up in margin trading, borrowing money to make bigger stock purchases than they could actually afford. It was a foolproof way to make money, so long as stock prices kept rising.But then, on the morning of Tuesday, October 29, more than sixteen million shares changed hands on the floor of the New York Stock Exchange. By the market’s close, investors had lost tens of billions of dollars — and kicked off a decade that would reshape American institutions, even as labor unrest, racial tensions, and the dark shadow of nativism pushed back from all sides.Support us by supporting our sponsors!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can binge new seasons of American History Tellers early and ad-free right now. Join Wondery Plus in the Wondery app or on Apple Podcasts. Imagine it's Tuesday, October 29th, 1929. You're working at your regular spot on the floor of the New York Stock Exchange. But today is anything but regular. The screams are so deafening that you can't even hear the trading bell. You're screaming as loud as anyone. Your hand stretches high in the air and you strain for a buyer to see you.

You need to move fast. The prices are tumbling. Every time you hear someone make a trade, prices seem to plunge lower. Even solid bets like U.S. Steel and Westinghouse are crumbling. You need to get out. Adult men shove and jostle like grade school kids straining to be first in line. They're shouting at the top of their lungs. Do their eyes burn as much as yours? You haven't slept all weekend. Traders clamor as allied chemical stocks plummet. Someone wails like he's just been gutted.

You see a man sitting right on the trading room floor, holding his head in agony. The din echoes off the exchange's stone walls. You get ready to offer a thousand shares of RCA at way too low a discount. Just as you open your mouth, you're knocked to the ground. As you scramble back to your feet, you see a portly trader in a gray vest, cursing at the man he just pushed into you. The trader's face reddens as he yells.

His rolled-up sleeve tightens as he winds up for a punch. The other trader ducks, but you don't. The last thing you see is his fist. You come to, sprawled on the cool marble floor of the lobby. A drumbeat of pain pounds behind your eyes. Blood drips from your nose onto a trading slip clutched between your shaking fingers. And for a second, terror washes over you. The slip is ruined. Then you realize your worry is meaningless. People are rushing back and forth through the lobby, kicking up hundreds of similar trading slips. Traders have abandoned them.

It's all worthless. Hey, are you okay? It's Jack, a trader from the House of Morgan. That was some punch you took. Yeah, I have stars in my eyes, but I'll be fine. Good. Listen, I gotta get back in there. The bottom's falling out, but I'll be fine. Good. Listen, I got to get back in there. The bottom's falling out, and I got to get something back here.

Can't count on Whitney to bail us out again. It's bad, isn't it, Jack? Yep. But it'll stop soon, though, right? Sure. Sure. It's got to turn around. From the team behind American History Tellers comes a new book, The Hidden History of the White House.

Each chapter will bring you inside the fierce power struggles, intimate moments, and shocking scandals that shaped our nation. From the War of 1812 to Watergate. Available now wherever you get your books. Have you ever wondered who created that bottle of sriracha that's living in your fridge? Or why nearly every house in America has at least one game of Monopoly? Introducing The Best Idea Yet, a brand new podcast about the surprising origin stories

of the products you're obsessed with. Listen to The Best Idea Yet on the Wondery app or wherever you get your podcasts. From Wondery, I'm Lindsey Graham, and this is American History Tellers. Our history, your story. On our show, we'll take you to the events, the times, and the people that shaped America and Americans. Our values, our struggles, and our dreams. We'll put you in the shoes of everyday citizens as history was being made. And we'll show you how the events of the times affected them, their families, and affects you now. Over the course of about a decade, the Great Depression upended American society.

The collapse of the stock market in October 1929 was the first widely seen sign of the Great Depression. Only the onset of World War II would clearly mark its end. This gut-wrenching period devastated lives, transformed the global economy, and recast the direction of our country. Hindsight shows that conditions leading to the Great Depression appeared well before the stock market collapsed. Declining factory production and plunging cotton prices were early indicators of trouble followed by a torrent of lost fortunes bank closures and stock crashes that left the country staggering unemployment would grow to previously unimaginable levels bellies would ache with hunger promises would be broken millions of people would be driven to migrate accelerating

an environmental disaster that would stretch across state lines. It was a decade unlike any other. Reform-minded politicians would reshape American institutions, even as labor unrest, racial strife, and the dark shadow of nativism pushed back from all sides. In that decade, Americans suffered through shocking loss, to a recovery that would only be completed by the onset of a global conflict. But just a few years before, the country was enjoying a period of unbridled enthusiasm. The 1920s had roared mightily. Technological advances following the end of World War I had revolutionized factory lines and consumer goods. By some assessments, manufacturing grew by 70% from 1922 to 1928. Meanwhile, more Americans than ever could afford to buy new cars, radios, and kitchen appliances.

That was in part because the increased efficiency made these products more affordable, and wages, at least in some portions of society, had also risen. At the same time, confidence in the American economy was high. These optimistic sentiments defined the 1928 presidential election. It didn't matter that Calvin Coolidge, the man who presided over most of the roaring 20s, chose not to run again. Instead, in 1928, Coolidge handed the reins to his Secretary of Commerce, Herbert Hoover, who readily took up Coolidge's pro-business laissez-faire mantle. Hoover won the presidency handily. He beat his Democratic

opponent, New York Governor Al Smith, by roughly 18 percentage points in the popular vote, and thoroughly trounced him in the Electoral College as well. Though other factors played into Hoover's victory, his promise to continue Coolidge's legacy carried him into the White House. Pushing him further was a dramatic claim he made when he accepted his party's nomination at his alma mater, Stanford University. We in America today, Hoover stated, are nearer to the final triumph over poverty than ever before in the history of any land. The then nominee also asserted that the poorhouse was vanishing. Hoover's campaign materials echoed these bold pronouncements, including a flyer that claimed Republican policy had led to

a chicken for every pot and a car in every backyard. The realities, of course, were less rosy. While Hoover promised to eradicate poverty, manufacturing was already petering out in the U.S. Demand had been high, but began to shrink around the time of the election. Meanwhile, European nations couldn't make payments on huge debts they owed U.S. banks for money they borrowed to fight the World War a decade earlier. Germany defaulted on reparations it owed to Britain and France. This put the European allies' financial situation in

even worse shape. To assist, the U.S. negotiated the amount Germany owed down, then pumped private investment into Germany. In turn, Germany used money from this investment to pay its reparations to the U.K. and France. In theory, those countries could then pay off their debts to the U.S. lenders. But this system relied on continued infusions of U.S. dollars into the German economy, infusions that would stop after the Depression began. While demand weakened in manufacturing centers and foreign borrowers struggled to pay their debts, crop prices plummeted. Farmers had sunk their life savings into homesteads. Then they took out loans for equipment and other costs. But now they couldn't

sell enough of what they grew to pay back all that they had borrowed. Another recent innovation also heightened the crisis. Consumer debt. Credit offers made living seem easy in the 1920s. And at the same time, the stock market's ever-dizzying heights were too much to ignore. People took out mortgages on their homes and businesses to afford a piece of the action. This influx of new investors was, for the most part, unsavvy. Their financial strategy was based on the assumption that the stock market would always keep rising. The most widely used barometer of this rise in the strength of the stock market is what's known as the Dow Jones Industrial Average. It's not necessarily the most precise measurement of the stock market, nor can you directly trace the strength or

weakness of the economy to the Dow's performance. Nonetheless, it illustrates the relative growth or decline in value of its component company's stocks. The Dow was first established in 1896 by Charles Dow, then the editor of the Wall Street Journal and the founder of the company that originally published that paper. The index measures the combined stock value of 30 publicly owned companies. It's not a true average, but a price-weighted total of one share of each of the 30 component stocks. The component companies that made up the Dow are generally understood to be among the strongest, most stable in the country. When the Depression began in late 1929, Dow components, the Apples and Walmarts of their day, included the Radio Corporation of America, or RCA, Sears Roebuck, and the American Sugar

Refining Company. By September 3rd of 1929, the Dow reached just over 382 points. That figure is not significant today, even at its inflation-adjusted equivalent of more than $5,500. Nevertheless, it was an all-time record. The stock market's growth seemed unstoppable. In September 1924, just five years earlier, the Dow had been worth only 100 points. In just half a decade, it had multiplied three and a half times. There were certainly skeptics of the stock market. One was Roger Babson. With the help of MIT professor George Swain, Babson developed a market index of his own based on his understanding of Newtonian physics. If every action had its equal and opposite reaction, then a long period of economic growth would surely be followed by an equally long period of economic decline. Babson developed a

market forecasting newsletter after a stock market crash in 1907. He built a fortune on the claim that these Babson reports, informed by the laws of gravity, could predict the stock market's performance. Two days after the Dow's record high in September 1929, Babson gave a speech in which he predicted that a crash was coming. And when it did, six weeks later, Babson insisted it was proof his theories were sound. And Babson wasn't the only skeptic. Others simply struck more cautionary tones about investing. In 1926, for example, a columnist named M.S. Rukeyser wrote of the risks to amateur speculators who hoped to profit from the rising stock market.

Writing for Colliers, Rukeyser sarcastically advised how to make money in Wall Street. The article led with a cartoon of a frazzled-haired man labeled amateur adrift in stormy waters above a dinghy named Ignor ignorance. A massive wave labeled Wall Street crested over the boat, threatening to drown the amateur. Rukeyser's article was prescient, warning amateurs about the dangers of margin speculation, a force that promised huge returns for some, but was for most a costly charade. Lured by the promise of skyrocketing markets, many people who had never invested in securities were drawn to margin trading, borrowing money to make bigger stock

purchases than he or she could actually afford. And banks and investment firms were all too eager to cater to these new borrowers. Unsophisticated investors were hopeful. The stock market kept climbing, so they reasoned they'd be able to pay lenders back with the gains and still reap profits. And it wasn't just consumers who were borrowing too much. Traditional investors were too. But what would they do if their stocks dropped and were suddenly worth less than what they had borrowed? And what happened to lenders when borrowers couldn't pay back their loans? What happened when the loans themselves were worthless?

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It's the evening shift at the diner you own on East Main Street in Spartansburg, South Carolina. You've just come back from your siesta. Even though your heritage is Greek, you like to use the Spanish word for the long afternoon breaks you take each day. You love this shift. When you're back in the restaurant, you don't have to rush through breakfast orders. You can sit and talk with the customers in the evening. Lately, that talk's been all about the stock market. One of your regulars, Henry, has been peppering you with stock tips all month. Hey, George, you hear what happened on Wall Street today?

What now, Henry? It went crazy. They traded more than 12 million shares. I heard the panic wiped out 5 billion. Billion with a B. Five billion dollars. Thought about pulling out myself before I lost everything. But my broker told me that Richard Whitney himself spent millions on all the big stocks.

Henry's the one who told you about margins. It's a little annoying how confident he gets, because he doesn't seem like he's that much better off than anyone else in this small southern town. But then again, you realize that if he's as successful as he claims, he must be doing something right. Maybe if you hold on just a bit longer, you'll make enough money to pay off your loans here at the restaurant. You glance at a gleaming new cash register you just bought. See, I'm not worried. I know what Babson said, but some economics professor from Yale says it's just a temporary hiccup. I heard that J.P. Morgan himself had a meeting with other bankers to try and figure out how they could help.

So it looks like it's under control. These bankers on Wall Street, you know, they have a lot more skin in the game than we do. They're not going to allow a crash like back in 07. But you're not so certain. George, it's Tony. It's your broker. You hear the news? I'm calling because you have to cover your margin.

Well, don't you want to say hello before you ask me for money? I don't have time for that. I've got 12 other clients I've got to call. Wall Street is in a spin. Your RCA is not worth anything now. You've got to cover what you took out. Tony keeps chattering. You set the earpiece on the counter, half listening. You turn around and start grilling a burger for Henry. And so that means what you owe now is about a thousand dollars. Your attention snaps back to the phone. You drop the spatula. Wait, a thousand dollars? I don't have that sort of cash. Well, find it. Look, I'm not trying to squeeze you, but the bank's squeezing me. But I spent it. Besides, I thought you said RCA was going through the roof. You said through

the roof. I thought you said I could use that profit to buy more GE stock and still cover my margin. I have debts here, Tony. What do you mean I owe more? You look at the light fixtures you just hung, the shiny new countertop, the fancy phone in your hand. How could you have been so dumb? And how could it have all changed so quickly? It was just last month when your RCA stock was worth a hundred bucks a share. You're still bickering with your broker when you start to smell something. It's Henry's Burger, burning. Listen, give me a few days, or 48 hours, something. I'll figure it out.

24 hours. You better figure it out. In December 1938, George Mahalas spoke with an interviewer from the Federal Writers Project. The Greek-American restaurant owner was one of thousands of Americans who would share detailed accounts of their lives to interviewers sent throughout the United States to write about life in the country during the worst economic crisis the world had ever seen. The Federal Writers Project was just one of the federal programs that President Roosevelt would later put in place to try to get the country's economy back on track. Among other subjects, it documented the heartbreak of millions of ordinary Americans, like George Mahalas, who gambled on the optimism of a surging stock market despite their better judgment. As late as the fall of 1929, few cared to hear about the unpaid debts from the war, consumer borrowing that went unchecked,

deflating commodities prices, or the fact that cars and dishwashers weren't selling quite as fast as they had earlier in the 20s. None of the new investors chasing the heady promises of wealth and glamour seemed eager to slow down as they drew further and further from margin accounts. Certainly no one stopped to ask whether banks could guarantee their deposits. Indeed, some were still celebrating the high times of the 20s even as the economy faltered. The press heralded America's business achievements, and the business class continued to vaunt investment, industry, and the theory, as Time magazine put it,

that America's greatest achievement had been business. And in 1929, as today, the place to do business in America was the New York Stock Exchange. A truly American institution, the exchange had been founded only five years after the ratification of the U.S. Constitution. By the roaring 20s, the exchange felt untouchable, as did the large banking houses who did business there. Many of the bankers behind these institutions were eager to stoke broad public enthusiasm in investing, and spread the idea that anyone could make it on Wall Street. Perhaps none was more eager to tout the illusion than Charles Mitchell, chairman of the National City Bank, a company that would evolve later into today's Citigroup.

Mitchell grew up in Massachusetts and attended Amherst College. After school, he moved to Chicago and worked for an electrical supply company for a few years. In the early 1900s, he became interested in finance and moved to New York. Mitchell opened his first investment house in 1911. Five years later, National City hired him as vice president. There, Mitchell developed a new income stream for the bank, selling stocks and other securities to middle-class people.

In 1921, National City elected Mitchell as its president. Over the next eight years, he further popularized the ideas of stocks as a mass market product. Before that, National City primarily focused on large companies. But now, everyday America's, and indeed the world's, thirst for easy money from securities meant easy profits for National City Bank. Mitchell and his colleagues on Wall Street ignored the Federal Reserve's warnings earlier in 1929 that they should rein in lending to investors. The Fed was wary of a repeat of the panic of 1907 when the New York Stock Exchange fell to half what it was the previous year.

But rather than adhere to the warnings, Mitchell, through National City, offered $25 million more to seduce margin investors. Also enticing the public were so-called bucket shops, where instead of actually buying a stock, investors essentially placed bets on a particular stock's performance. At the time, they were largely unregulated and a magnet for unscrupulous characters and people looking to make a fast profit. At the same time, pools of well-informed investors were taking advantage of newcomers by talking up certain stocks beyond what they were worth. The chatter would drive the price of these stocks up,

luring in more marks as the pools pulled out and sold off their shares. The stocks' value would of course plunge, and novice investors were left with holdings they couldn't unload for a fraction of what they paid for them. Signs of trouble on the market grew gradually after its peak in early September. By the second to last week of October, mentions of a frightened market began appearing in newspapers, but these brief scares were coupled with optimistic recoveries. During one of these small panics, Mitchell demonstrated his influence, as New York Times reporters said at the time, by halting the slide merely by declaring that the decline had

gone too far. It worked, but the result was fleeting. In the same piece, the Times also referred to Babson, who continued to urge investors to sell stocks, as he had six weeks earlier when predicting that a crash was on its way. Babson wasn't the only one fearful of more losses. Investors were too. And as they sold, prices fell yet further, and the cycle repeated. On October 24th, a Thursday, investors panicked again. Lenders started calling in the loans they made to margin investors. In turn, these investors sold whatever they could, hopefully fast enough to afford to pay back their loans.

Prices plummeted as borrowers raced to take whatever value they could from the market. This sell-off only spooked more buyers, and the effects cascaded as everyone lost the value they'd counted upon. Then, at 1.30 in the afternoon, it looked like the crisis might be over. That's when Richard Whitney strode onto the exchange floor. Whitney was a broker at the famed trading house J.P. Morgan and the vice president of the New York Stock Exchange. Eager to demonstrate confidence in the exchange and the company's of the New York Stock Exchange. Eager to demonstrate confidence in the exchange and the company's trading on its floor, Whitney loudly proclaimed that he would buy

25,000 shares of U.S. steel at $205 per share. That commitment of more than $5 million, more than $74 million today, was matched by other and also overpriced offers for stocks. The gambit worked. By pumping millions into the stock exchange that afternoon, Whitney was able to temporarily staunch the exchange's losses. He was a market hero, but his reputation wouldn't hold for long. The record-breaking pace of trading kept Wall Street denizens in their offices for days on end as they frantically settled accounts. At the time, trades were recorded by hand on pieces of paper, so it was a mammoth undertaking to process the millions of trades that had taken place. Compounding the problem, traders had to wait hours to complete transactions as stock tickers

struggled to keep up with the high volume of trading. These tickers were the narrow printouts of modified telegraph machines. Revolutionary upgrades when they were introduced in the 19th century, stock tickers enabled investors in far-flung corners of the U.S. to participate in New York's stock markets, transmitting nearly 300 characters per second. As soon as trades were recorded, stock prices and trade volumes shot over telegraph cables to be printed out on narrow bands of white tape in banks, investment houses, and newspapers across the country. But the unprecedented millions of shares changing hands on Thursday, October 24, 1929, delayed the ticker by nearly four hours. By the weekend, the streets were littered with

bits of ticker tape and discarded trading slips. The market played catch-up all weekend. Newspaper accounts of the time detail how New York's financial district, normally pretty quiet on Sundays, was abuzz as messengers ran about, restaurants remained open beyond their normal hours, and traders skipped trips to the golf course. There were even sightseeing buses making special trips to Wall Street to witness all the activity. Compared to the previous few trading days, the next Monday was calm. But then, on the morning of Tuesday, the 29th, more than 16 million shares changed hands at the New York Stock Exchange. This new record trading volume wouldn't be broken for another four decades. And it wasn't just an immense number of shares moving from one

set of investors to another. As panicked stockholders sold shares, the stocks dropped in value, triggering a downward spiral across the market. The day would become known as Black Tuesday. By market's close, investors had lost tens of billions of dollars. Trading on the floor of the New York Stock Exchange was dizzying enough. But if you were an investor in a distant city, keeping track of this activity was next to impossible. Again, the ticker fell behind the massive volume, running as far back as two and a half hours, and again, brokers and traders had to work into the wee hours to settle their transactions.

Indeed, the record volume was probably underestimated. Many trades likely were never recorded, lost in the trading floor's chaos, or forgotten as exhausted traders fell asleep in bank lobbies, spilling trading slips from their overstuffed pockets. Confusion reigned on Black Tuesday. While the frantic trading progressed, many on Wall Street waited and wondered whether big shots like Mitchell or Whitney would come back out and halt trading or make some other sort of reassuring statement. And Mitchell was one of those who made a showy purchase during the panic. He tried to help settle the crisis by buying between 30 and 35,000 shares of stock in his own bank, even though it was worth less than he paid for it.

But unlike the previous Thursday, when bankers also made large purchases of stock, the rest of the market wasn't reassured. The panic continued, and trading on the New York Stock Exchange was suspended the next afternoon and closed for the rest of the week. Years later, Mitchell's attempt at stabilizing the market would come under Senate scrutiny. But at the moment, Wall Street was in a daze. A sense of shock pervaded the financial district. It was as if a bomb had detonated. But the worst was yet to come.

As the market crashed on Black Tuesday, reports of pandemonium in New York and beyond spread. Stories hit front pages about investors drowning themselves in the Hudson River, shooting themselves in Kansas City country clubs, and dying of heart attacks as they watched their investments shrink. Vivid scenes of despair at plunging stock prices were actually less common than dramatic news reports made them seem. Popular legends of Black Tuesday involving washed-out investors leaping from buildings or stepping in front of speeding Packards on Wall Street were widely exaggerated. These rumors might have even contributed to the panic as investors sold worrying they'd end up just as despondent but they were mostly just rumors but away from wall street real despondency grew and suicide rates climbed fewer people killed themselves in the months right after the crash than in the months preceding it but by 1932 well into the great depression

the suicide rate in the u.s. had grown by more than one-third from where it had been four years prior. But at the end of October 1929, the crash's worst reverberations were still to be felt. In Chicago, the writer Studs Terkel was growing up at the Wells Grand, the small hotel his mother ran. Terkel would later become one of the chief chroniclers of Depression-era experiences. In his introduction to the book Hard Times,

he reflected that the Wells Grand's 50 rooms had always been occupied through the 20s, and there was always a long waiting list if vacancies arose. But all that changed with the Depression. He wrote, As for the crash itself, there's nothing I personally remember, other than the gradual, at first hardly noticeable, diminishing in the roster of our guests. It was as though they were carted away, unprotesting and unseen. At the entrance, we posted a placard.

Vacancy. As the economic crisis worsened, opportunities dwindled across the U.S., and living condition worsened for millions of Americans. Out-of-work men began wandering the country by boxcar in search of any opportunity they could find, sometimes stealing food. Conditions were dire. Hope dimmed. The numbers of the newly laid off and homeless grew. And for many, the only remaining semblance of society was the one they built themselves from scrap. in the house next door to where I grew up, I started wondering about the inexplicable things that happened in my childhood bedroom. When I tried to find out more, I discovered that someone who slept in my room after me, someone I'd never met, was visited by the ghost of a faceless woman.

So I started digging into the murder in my wife's family, and I unearthed family secrets nobody could have imagined. Ghost Story won Best Documentary Podcast at the 2024 Ambees and is a Best True Crime nominee at the British Podcast Awards 2024. Ghost Story won Best Documentary Podcast at the 2024 Amby's and is a Best True Crime Nominee at the British Podcast Awards 2024. Ghost Story is now the first ever Apple Podcast Series Essential. Each month, Apple Podcast editors spotlight one series that has captivated listeners with masterful storytelling, creative excellence, and a unique creative voice and vision. To recognize Ghost Story being chosen as the first series essential, Wondery has made it ad-free for a limited time, only on Apple Podcasts. If you haven't listened yet, head over to Apple Podcasts to hear for yourself. In November 1991, media tycoon Robert Maxwell mysteriously vanished from his luxury yacht in

the Canary Islands. But it wasn't just his body that would come to the surface in the days that followed. It soon emerged that Robert's business was on the brink of collapse, and behind his facade of wealth and success was a litany of bad investments, mounting debt, and multi-million dollar fraud. Hi, I'm Lindsey Graham, the host of Wondery Show Business Movers. We tell the true stories of business leaders who risked it all, the critical moments that defined their journey, and the ideas that transformed the way we live our lives. In our latest series, a young refugee fleeing the Nazis arrives in Britain determined to make something of his life. Taking the name Robert Maxwell, he builds a publishing and newspaper empire that spans the globe. But

ambition eventually curdles into desperation, and Robert's determination to succeed turns into a willingness to do anything to get ahead. Follow Business Movers wherever you get your podcasts. You can listen ad-free on the Amazon Music or Wondery app. It's a chilly mid-November night in 1930. Flames lick the sky above a dirt lot next to Lake Michigan. As cold as the night is, the fire provides no warmth. Two days ago, the Chicago Tribune named this place Hooverville. It's a dense clump of makeshift shacks, but it's the safest home you've had in this horrible year. You came to Hooverville after the factory you worked at shut down this summer.

This is no simple encampment of tents dispersed willy-nilly. You have real streets here. They even have their own names, like Hard Times Avenue and Prosperity Road. But there's a real city just outside of Hooverville, and its police are trying to evict you and your neighbors. It's clear that Big Bill Thompson, Chicago's mayor, was embarrassed by the recent story in the Tribune. Watching workmen take a sledgehammer to your shanty, you turn to your neighbor Joe, disgusted. How can they do this? It's obscene. We weren't hurting nobody. Look, they're headed for the mayor's house now. In your peripheral vision, you notice the mayor. No, not Thompson, that crook. It's Donovan, Mike Donovan, your mayor. He might be a disabled

rail brakeman, but at least Donovan isn't buddies with gangsters like Capone the way Thompson is. Donovan's all for the little guys here in Hooverville. That's why everyone agreed to make him mayor. When you were down on your luck, Donovan welcomed you right in. But now, Donovan's blue eyes stare unblinkingly at a tractor approaching the corner of Prosperity Road and Easy Street. It pauses for a moment, but then knocks down the house Donovan built from discarded wood, iron, and brick he scavenged on the lot. The mayor grits his teeth. Firelight glints off the wetness pooling in his eyes. Joe shouts at them, shouldn't be doing this. You guys could be next.

As Joe yells, a police officer turns around and shouts at him to get back. Joe spits, I'm no bum. I'm just a working man. This is our home. We built it ourselves. It matters to us. We matter. What a long year it's been. The market crash. Then you lost your job at the factory.

Then soon your home. You put your hand on Donovan's shoulder. You did everything you could, Mayor. You made this place happen. Together we can build it again. Trust us. We've got your back. Within a few weeks of Black Tuesday, the Dow Jones Industrial Average lost nearly half its value from its high point in early September 1929.

After a short, limited recovery into April 1930, it retreated again. The Dow would continue to shrink through July 1932, when it would fall to just a fifth of what it had been worth before the Depression began. And barely a year had passed from the stock market crash before shantytowns popped up around the United States. In mid-November 1930, the Chicago Tribune called one such community near Lake Michigan, Hooverville, a direct knock against current President Herbert Hoover, whose policy had failed to reverse the economic slide. Newspapers around the country reprinted the article. On a plot of publicly owned land at the foot of Randolph Street, just next to Grant Park, within sight of Chicago's skyline, the Hooverville sprang up, as one newspaper described it,

like one of those mushroom mining towns on the bonanza days of the Far West. Desperate residents built their homes from discarded building materials. But a mere three days after the site made headlines in the Tribune and elsewhere, Chicago police condemned Hooverville and moved in to tear it down. Municipal work crews first destroyed Hooverville's buildings with a tractor. Then they dismantled by hand, and then eventually burned whatever was left. The political implications of Hooverville's were enormous, especially considering Hoover's 1928 campaign promise that poverty was on its way out the door.

President Hoover had entered office promising chickens in every pot and the final eradication of poverty, but within a year of his inauguration, his name was a political joke. The worst stock market crash in history had happened under Hoover's watch. People were losing their jobs at frightening rates. By the time he ran for re-election in 1932, a quarter of the country was unemployed. The figure was even higher in some demographics. Half of all African Americans lacked jobs. Before the market crashed, cotton had been selling for about 18 cents a pound. Four years later, it cost just six. The South's most important crop was only worth a third of what it had been before the Depression. Other commodities like wheat and steel also lost value. The American economy had been in trouble well before Wall

Street noticed, and it seems Hoover and his Secretary of the Treasury, Andrew Mellon, hadn't been paying attention either. Andrew Mellon had held the position as head of the Treasury since Warren Harding took office in 1921. Before then, Mellon had transformed his father's banking business into a financial and industrial empire, and he took his lessons from business into public office, becoming a standard-bearer for the fiscally conservative, successfully pushing a series of tax cuts through Congress during the 1920s. After the crash, Mellon's hands-off, business-first positions didn't change. Instead, he urged Hoover not to intervene in the crisis and opposed a variety

of stimulus measures. He argued that a laissez-faire approach would prompt Americans to pick themselves up by their bootstraps and that enterprising citizens would lead the economy's recovery. This did not sit well with an increasingly despondent American public, and by 1932, as Congress prepared impeachment proceedings against Mellon, he resigned and was appointed by Hoover as the country's ambassador to Great Britain. It was a time to act, so Hoover took to a new set of protectionist trade measures, championed by Senator Reed Smoot of Utah and Representative Willis C. Hawley of Oregon. The two had been pushing for

higher foreign tariffs since before the stock market crash. But now, after the crash, support for tariffs had grown, and the bill finally made it through Congress. But many economists and business leaders were against the measure. Even Wall Street bankers such as J.P. Morgan's Thomas Lamont opposed it. Hoover pushed on anyway, though, and the Smoot-Hawley Tariff Act became law in the summer of 1930. By then, the entire world's economy was reeling in the wake of the 1929 crash. The new tariffs, though, only worsened the pain other countries felt. And so, in retaliation, they enacted their own tariffs on U.S. goods, which in turn hit American businesses. And over the next four years, global trade fell,

damaging the global economy and leaving even fewer markets open to American exporters. Consumers who lost money in the stock market crash drastically cut back on spending. Businesses collapsed. Factories shut down. Unemployment skyrocketed. Americans couldn't pay the banks back for loans they'd taken out to buy stocks on margin or for improvements to their businesses they made on credit. And meanwhile, with so many lenders insolvent, small banks that didn't have enough money

coming in suddenly couldn't pay back their own creditors or give customer deposits back. And so even those who hadn't played the market still lost money they thought was safe in their banks. As the 1920s neared their end, the roar fell silent. But this was just the beginning. Millions of people would lose their homes as the Depression worsened. More Hoovervilles would appear. And among these communities, a movement stirred that would put the country's veterans

on a collision course with Washington, D.C. and President Hoover. Next week on American History Tellers, anger erupts around the United States as the Depression sets in. Unemployment begins to tear at the country's racial divides. And an explosive confrontation looms as thousands of World War I veterans march on Washington. If you like American History Tellers, you can binge all episodes early and ad-free right now

by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. And before you go, tell us about yourself by filling out a short survey at wondery.com slash survey. From Wondery, this is American History Tellers. I hope you've enjoyed this episode. If you're listening on a smartphone, tap or swipe over the cover art of this podcast. You'll find the episode notes, including some details you may have missed. And if you do like this show, one of the very best ways you can show your appreciation is to give us a five-star rating and leave a review. American History Tellers is

hosted, edited, and executive produced by me, Lindsey Graham for Airship. Sound design by Derek Behrens. This episode is written by Bill Lasher, edited by Dorian Marina, edited and produced by Jenny Lauer Beckman, produced by George Lavender. Our executive producer is Marshall Louis, created by Hernán López for Wondery. Dracula, the ancient vampire who terrorizes Victorian London. Blood and garlic, bats and crucifixes. Even if you haven't read the book, you think you know the story. One of the incredible things about Dracula is that not only is it this wonderful snapshot of the 19th century, but it also has so much resonance today.

The vampire doesn't cast a reflection in a mirror. So when we look in the mirror, the only thing we see is our own monstrous abilities. From the host and producer of American History Tellers and History Daily comes the new podcast, The Real History of Dracula. We'll reveal how author Bram Stoker raided ancient folklore, exploited Victorian fears around sex, science, and religion, and how even today we remain enthralled to his strange creatures of the night. Thank you.