A New Perspective on the Great Depression (Part 2)

The most important and broadly impacting changes of the time were a general constriction on the average family’s budget and a growing mistrust in currency. The first is depicted by an entry on August 18^th, 1931 in which Roth’s dentist asks him and his family to come even if payments would have to be made later. Roth noted that people had simply stopped going to the dentists and if a tooth hurt, they would just get it extracted rather than incur the expenses of checking and healing it. In this way many American’s were avoiding any “unnecessary” expenses and adjusting for thriftier times. The latter point is best shown through the series of bank failures that hit the country. Roth, who begins researching extensively to understand events, details how bank deposits are often invested in mortgages that are usually safe and profitable but not easily liquidated. So as mortgage payments declined and people began scrambling to withdraw their savings, banks couldn’t pay back on accounts and were often forced to close. Hence, the circulating supply of cash shrunk even further with no room for expansion until the gold standard was dropped (because the government couldn’t print more money without backing it). As people saw their savings literally disappear and the money supply decreased, they simply couldn’t trust the dollar. The severity of this apprehension is best shown through a story Roth’s son tells of 1946, a time of post-war peace and prosperity. Roth’s son finds himself mediating a large trust investment for a very wealthy customer. As the customer is preparing to sign with the rather eager trust representative, he sharply and unwaveringly demands that the representative sign that the customer’s money would never be invested in anything other than government bonds. As shocked as Roth was, he saw the degree to which people saw risk in nearly every investment vehicle.

Interestingly enough, the challenges we see in Roth’s diaries, correspond closely to what many American’s can identify with in today’s recession. The problem of defaulting mortgages is perhaps the obvious one, but many of the entries also show us a sense of anxiety that today as well, makes many of us think twice about everything we do with our money.

I look forward to reading Roth’s published journals and hopefully to draw some unique insight. I cannot help but wonder about the true story of daily life in the depression and how our story will be portrayed a few decades from now.