The Epic of New York City (89 page)

Edward H. H. Simmons, president of the exchange, was on vacation. Responsibility fell upon the shoulders of the exchange's vice-president, thirty-nine-year-old Richard Whitney. The son of a Boston banker, educated at Groton and Harvard, and married to the widow of a son of Mrs. William K. Vanderbilt, Whitney was a power on Wall Street. He owned a 495-acre gentleman's farm in New Jersey, a town house on Manhattan's East Side, 8 automobiles, 47 suits, 12 walking sticks, and 4 pink coats for fox hunting.

The selling wave was so gigantic that ticker tapes ran far behind transactions. A time lag of up to thirty minutes ensued between prices quoted on the floor of the exchange and those on the ticker tape. As a result, all was confusion and uncertainty and worry. Among those watching this mad scene was Winston Churchill, Britain's former Chancellor of the Exchequeur. He and the others heard a false rumor that eleven speculators had committed suicide. A crowd standing in Wall Street gazed apprehensively at a workman on the roof of a
building, convinced that he was preparing to jump. There were untrue reports that the exchanges in Buffalo and Chicago had closed. Police Commissioner Grover Whalen sent a police detail to Wall Street to maintain order.

At noon, five of the nation's most influential bankers slipped into the House of Morgan. J. P. Morgan was in Europe, so they conferred with Thomas W. Lamont, senior partner of the firm. The vast wealth of the House of Morgan aside, these titans commanded more than $6,000,000,000 in banking reserves. Each chipped in millions of dollars to form a pool to buy stocks in order to create confidence in the market. Lamont later said that they did not try to hold prices at any given level but simply made enough purchases to restore order to the trading operation. Chosen to act for them was Richard Whitney, floor trader for the Morgans.

At 12:30
P.M.
the exchange closed its visitors' gallery. At 1:30
P.M.
Whitney walked onto the floor of the exchange and pushed his way past shouting men toward trading post No. 2, where U.S. Steel was handled. The vast hall hushed briefly as brokers watched him and then filled again with a buzz of excited voices. Whitney held a slip of paper in one hand. He called out: “Two hundred five for Steel!” He was offering to buy 10,000 shares of U.S. Steel at 205 when the current bids were several points lower. Only 200 shares were available at 193½, but Whitney's gesture impressed brokers and customers and revived their courage. Then, moving with studied nonchalance, Whitney visited other trading posts, offering to buy from $20,000,000 to $30,000,000 worth of stock. His maneuver checked the selling wave, vanquished fear, and led many speculators to reinvest, lest they miss out on the new advance. It also gave some big and conservative operators time to unload. Prices boomed again.

When trading ended at 3
P.M.
, U.S. Steel closed at 206. Montgomery Ward, which had opened at 83 and fallen to 50, shot back up to 74. An astonishing total of 12,894,650 shares changed hands that day. The New York
Times
called it “the most disastrous decline in the biggest and broadest stock market of history.” Not until 8:07
P.M.
did the tardy tickers stop chattering prices from the exchange floor. That night Wall Street buildings were honeycombed with lights as brokers and clerks struggled out of an avalanche of paper work.

Brokers wired customers to ask for more margin. The Marx Brothers, natives of New York City, were playing in a show in Pittsburgh. Harpo Marx's broker telegraphed him: “FORCED TO SELL
ALL HOLDINGS UNLESS RECEIVE CHECK FOR $15,000 TO COVER MARGINS.” The harp-playing comedian managed to get the sum and sent it to his broker. The next morning Harpo got a similar request. Then a third. The last wire read: “SEND $10,000 IN 24 HOURS OR FACE FINANCIAL RUIN AND DAMAGING SUITS STOP MUST HAVE $10,000 REGARDLESS WHETHER I CAN SELL YOUR HOLDINGS.” By this time Harpo's holdings had shrunk to $1 per share, he had borrowed all he could, and he had liquidated every asset he owned. Once worth $250,000 on paper, Harpo was almost penniless. His brother Groucho was completely wiped out.

In the next few days, despite reassuring words from President Hoover and others, prices continued to fall. The
Commercial and Financial Chronicle
, taking a realistic view, said that “the present week has witnessed the greatest stock-market catastrophe of all the ages.” On November 13 prices sank to a low for 1929. The disaster blew into thin air $30,000,000,000 worth of supposed values. As Frederick Lewis Allen later pointed out, this was “a sum almost as great as the entire cost to the United States of its participation in the World War, and nearly twice as great as the entire national debt.”

No one man was responsible for the crash. The get-rich-quick mania had afflicted almost everybody. About 9,000,000 savings accounts were wiped out, 85,000 businesses went to the wall, 5,000 banks failed, agriculture hit bottom, and national income was cut in half. New York and all America suffered the biggest jolt since the Civil War. In 1929, according to John Kenneth Galbraith, there began “the most momentous economic occurrence in the history of the United States, the ordeal of the Great Depression.”

 

Chapter 44

P
OLLY
A
DLER
, who ran the most famous bordello in town, noticed a curious change brought about by the depression. Most of her clients were, or had been, rich, and now they visited her place not so much for sex as for liquor. They got drunk on champagne costing $30 a bottle and beer costing $1 a glass and behaved like madmen. One man kept muttering that he used to control Wall Street but didn't know now whether he could pay the next month's rent. Another said that he came back night after night because a whorehouse was the only place where he could cry without being ashamed.

Bernard Baruch stood rigidly in his Madison Avenue office and murmured to a
Times
reporter: “In the presence of too much food,
people are starving. Surrounded by vacant houses, they are homeless. And standing before unused bales of wool and cotton, they are dressed in rags.” At the Canterbury School in New Milford, Connecticut, thirteen-year-old John Fitzgerald Kennedy wrote his father: “Please send me the
Literary Digest
, because I did not know about the Market Slump until a long time after, or a paper. Please send me some golf balls. . . .”

New York City nearly went under financially. Because property owners were unable to pay taxes, city revenues declined. Expenses, however, continued to mount. The city had to borrow on anticipated tax collections, piling up a public debt almost equal to that of the forty-eight states combined. As a result, city credit suffered.

As unemployment rose, hopeless men stared at smokeless chimneys. Manufacturing firms quit the city, leaving fewer plants in operation than at any time since 1899. Bryant Park, behind the New York Public Library, degenerated into a weed-filled jungle. Construction of the Triborough Bridge was stopped for lack of funds. Work halted on a fashionable new hotel, named the Hampshire House, at 150 Central Park South. The city's taxicabs decreased from 28,000 to 13,000, and some hackdrivers made only $20 a week. Saleswomen in some Woolworth stores were paid $10.80 a week, and others got as little as $7.

To help homeowners, the state legislature declared a moratorium on foreclosures if the interest on mortgages and taxes were paid. But many people were too poor to pay even these and lost their homes. In the Sunnyside area of middle Queens eviction notices were fought by collective action. Doors were barricaded with barbed wire and sandbags. Householders bombarded sheriffs with pepper and flour. More than 60 percent of Sunnyside's homeowners lost their houses through foreclosure. Families began doubling up in houses and apartments.

The homeless slept under bridges, in railroad terminals, on subways, in missions, and in municipal shelters. By buying one drink, a man could sleep on sawdust in a cheap speakeasy. The unemployed also lived in parks, someone saying that “ten-cent men sleep under thousand-dollar trees.” A young Ph.D. camped for eight months in Morningside Park. Another man loaded all his worldly goods into a baby buggy and sought refuge in Central Park. Each night he lowered the buggy's dashboard, put down the seat in the back,
crawled in, covered himself with a rubber sheet, pulled the buggy's hood over his head, and fell asleep.

College graduates suffered, along with the uneducated. Professional men slept in subways, while Queens County politicians rode around in Pierce-Arrows. Although Hollywood ignored the depression as long as possible, it finally faced up to the ugly problem. A movie called
One More Spring
depicted actor Warner Baxter as a penniless producer roasting a partridge in his makeshift home in Central Park. Sallow-cheeked men sold apples in the streets. New York became accustomed to the sight of the breadline, which Heywood Broun described as “the worm that walks like a man.”

When the weather was bad, many children failed to attend school because they lacked warm clothing and shoes. Those who did go could not pay attention to lessons because they suffered from malnutrition. Groucho Marx said that he knew things were bad when “the pigeons started feeding the people in Central Park.” In 1931 four New York hospitals reported ninety-five deaths from starvation. The Welfare Council told about a family in the Brownsville section of Brooklyn:

The depression hit rock bottom in December, 1932. Nearly one of every four employable New Yorkers was jobless. The song “Brother, Can You Spare a Dime?” became a byword. Men with elbows poking out of sleeves asked one another ruefully, “Got change for a match?” Charles M. Schwab, a steel company president living in a seventy-five-room mansion on Riverside Drive, confessed, “I'm afraid. Every man is afraid.” Carl Van Doren, the brilliant editor, historian, and critic, later wrote: “I had no systematic thoughts but I had recurrent dreams. One dream, rather, in several forms. It was a dream of fear. . . .”

There was much talk of suicide—some of it sad, some cynical. A favorite joke concerned a hotel clerk who asked guests if they
wanted a room for sleeping or jumping. A total of 1,595 New Yorkers killed themselves in 1932—the highest number since 1900.

Harlem suffered more than any other section of the city. Negro men who worked as casual laborers and colored female domestics soon found themselves unemployed. Negroes lucky enough to find jobs were paid less than whites but charged more than whites in rentals. Knowing that their tenants could not move to other neighborhoods, Harlem landlords were quick to raise rents. As a result, there were wholesale evictions. To help pay for their apartments, some Negroes took in lodgers, which produced appalling overcrowding.

Cheated and cramped, jobless and hopeless, many Negroes tried to escape reality by drinking, buying “love potions,” consulting fortune-tellers, burning incense to destroy “evil spirits,” purchasing dream books, and playing the numbers game. Lottery tickets sold for as little as a penny and paid off at 540 to 1. A banker for one of Harlem's big policy games, a Negress who called herself Mme. St. Clair, enjoyed an income of $250,000 a year and a private bodyguard. One of Harlem's best-known purveyors of “love potions” was a man who styled himself High John the Conqueror.