Local diary reveals the last Great Depression

By Jon Moffett

Some events recorded in the diary show parallels to today’s economic situation .

YOUNGSTOWN — While banks were failing and stocks were reduced to the worth of penny candy, Benjamin Roth was writing.

Roth, born in New York City in 1894, had moved to Youngstown in 1919 after an Army stint in World War I. He opened a law practice upon his arrival and had nearly a decade of experience before the United States was plunged into the Great Depression. Roth, meticulous about writing things down, started to chronicle his thoughts and observations on the trying times the nation faced after the Oct. 29, 1929, stock market crash.

“That was just his style,” said Jan Strasfeld, Roth’s granddaughter, executive director of the Youngstown Foundation. “He wrote a lot of things down. ... He kept 10 legal pads and 10 sharpened pencils on his desk in his den at home and was constantly writing, whether it was notes to people or just documenting an event that he and my grandmother attended.”

Two years after the stock market crashed, Roth took notice of the magnitude of the country’s lingering economic woes. He started a diary June 5, 1931, and continued writing and making revisions right up to his death in 1978. The 14-volume diary offers Roth’s perspective on the Depression and the impact it had on the Youngstown community.

Among his first entries, Roth observed: “Investments in real estate and mortgages fared almost as badly as stocks. Since 1929, foreclosure by the banks has been the order of the day.”

Given the events of recent months, his family was struck by the poignancy and the timeliness.

“He told me that he would appreciate it if someday I would edit the diaries and publish them,” said Roth’s son Daniel, who practices law in Youngstown and Naples, Fla. “When I was discussing the diaries with my son recently, he and I agreed that the timing was right to begin publishing them because of the current economic crisis.”

Roth arranged for a series of four excerpts from his father’s diaries to be published in The Washington Post, which has published four weekly installments on its Web site thebigmoney.com.

“Many of the events my father recorded are strikingly similar to what’s happening in the country today,” he said.

In the first entry, dated June 5, 1931, Benjamin Roth wrote, “Immediately after the 1929 crash the spectators rushed in to buy ‘bargains’ but were badly mistaken because the market kept going down and down even tho’ industrial leaders kept on assuring the people that everything was fine and the worst was over.”

“It’s fascinating,” Strasfeld said. “It’s history repeating itself to some degree, especially with what’s been happening to the financial institutions.”

The Home Savings and Loan Co. represents one parallel between then and now.

This past August, the company’s parent group agreed to restructuring orders given by federal and state agencies due to the current economic crisis.

An entry dated Aug. 17, 1931, says: “I had lunch and a talk with [a representative] of the Home Savings & Loan Co. He is not very optimistic about the near future. Says that the ... Money is either in hoarding or tied up in closed banks and business is crippled. He does not think bank money will be released for a long time.”

A news release from the bank dated Aug. 13 of this year states: “The banking industry is currently experiencing challenging market conditions, and while Home Savings is not immune to those conditions, it does remain financially strong. ... The company expects there will be a short term negative impact on earnings due to higher compliance costs associated with the order, but those costs are expected to eventually be offset by lower loan loss provisions and charge-off expenses.”

Though he hadn’t invested in stocks, Roth witnessed firsthand what his clients faced, Strasfeld said.

“His journal was a reflection of what was going on,” Strasfeld said. “It’s amazing how he did this and didn’t just talk about the news and what the stocks were or what banks were closing, but also included the human side of it; what they were experiencing.”

Another example of the similarities between the Great Depression and today’s economic slowdown is the real estate market.

In an entry dated Aug. 6, 1931, Roth writes: “At a public sale by the sheriff today on foreclosure by the bank the ... home ... was offered for the third time but no buyer was found. It could be bought for $4,400, and is really worth conservatively $7,500. In 1929 the owner thought it was worth $11,000.”

A recent article in The Vindicator described similar situations today.

Business Editor Don Shilling, after speaking with Ken Maryland, the president of Clear View Economics in suburban Cleveland, wrote, “Housing prices, for example, have dipped so low that housing affordability rates have seen large increases recently. These rates combine home prices, mortgage rates and personal income levels. Perhaps in the next year, consumers will be spurred to buy homes because of the price drops, [Maryland] said.”

Strasfeld said accounts of life during the Great Depression, like her grandfather’s diary, offer a realistic view of the struggles people faced then.

“Obviously, there is a lot of documentation out there, but this perspective applies directly to our local community,” Strasfeld said.

Though the diary was primarily devoted to financial matters and the struggling economy, Strasfeld said she remembers stories her grandparents would tell her about the hard times.

“My grandmother would tell stories about how she would go down to the bus stop to try and pick up change for food. ... She would always go and see if anyone had dropped any coins, and my grandfather said people used to pay him in chickens.”