October 28, 2024

On Monday, October 28, 1929, New York’s Metropolitan Opera Company opened its forty-fifth season.

Four thousand attendees in their finest clothes strolled to the elegant building on foot or traveled in one of a thousand limousines to see Puccini’s Manon Lescaut, the melodramatic story of an innocent French girl seduced by wealth, whose reluctance to leave her riches for true love leads to her arrest and tragic death. Photographers captured images of the era’s social celebrities as they arrived at opening night, their flash bulbs blinding the crowd that had gathered to see the famous faces and expensive gowns.

No one toasting the beginning of the opera season that night knew they were marking the end of an era.

At ten o’clock the next morning, when the opening gong sounded in the great hall of the New York Stock Exchange, men began to unload their stocks. So fast did trading go that by the end of the day, the ticker recording transactions ran two and a half hours late. When the final tally could be read, it showed that an extraordinary 16,410,030 shares had traded hands, and the market had lost $14 billion. The market had been uneasy for weeks before the twenty-ninth, but Black Tuesday began a slide that seemingly would not end. By mid-November the industrial average was half of what it had been in September. The economic boom that had fueled the Roaring Twenties was over.

Once the bottom fell out of the stock market, the economy ground down. Manufacturing output dropped to levels lower than those of 1913. The production of pig iron fell to what it had been in the 1890s. Foreign trade dropped by $7 billion, down to just $3 billion. The price of wheat fell from $1.05 a bushel to 39 cents; corn dropped from 81 to 33 cents; cotton fell from 17 to 6 cents a pound. Prices dropped so low that selling crops meant taking a loss, so struggling farmers simply let them rot in the fields. 

By 1932, over one million people in New York City were unemployed. By 1933 the number of unemployed across the nation rose to 13 million people—one out of every four American workers. Unable to afford rent or pay mortgages, people lived in shelters made of packing boxes.

No one knew how to combat the Great Depression, but certain wealthy Americans were sure they knew what had caused it. The problem, they said, was that poor Americans refused to work hard enough and were draining the economy. They must be forced to take less. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” Treasury Secretary Andrew Mellon told President Herbert Hoover. “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.” 

Slash government spending, agreed the Chicago Tribune: lay off teachers and government workers, and demand that those who remain accept lower wages. Richard Whitney, a former president of the Stock Exchange, told the Senate that the only way to restart the economy was to cut government salaries and veterans’ benefits (although he told them that his own salary—which at sixty thousand dollars was six times higher than theirs—was “very little” and couldn’t be reduced).

President Hoover knew little about finances, let alone how to fix an economic crisis of global proportions. He tried to reverse the economic slide by cutting taxes and reassuring Americans that “the fundamental business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis.” 

But taxes were already so low that most folks would see only a few extra dollars a year from the cuts, and the fundamental business of the country was not, in fact, sound. When suffering Americans begged for public works programs to provide jobs, Hoover insisted that such programs were a “soak the rich” program that would “enslave” taxpayers, and called instead for private charity.

By the time Hoover’s term ended, Americans were ready to try a new approach to economic recovery. They refused to reelect Hoover and turned instead to New York Governor Franklin Delano Roosevelt, who promised to use the federal government to provide jobs and a safety net to enable Americans to weather hard times. He promised the American people a “New Deal”: a government that would work for everyone, not just for the wealthy and well connected.

As soon as Roosevelt was in office, Democrats began to pass laws protecting workers’ rights, providing government jobs, regulating business and banking, and beginning to chip away at the racial segregation of the American South. New Deal policies employed more than 8.5 million people, built more than 650,000 miles of highways, built or repaired more than 120,000 bridges, and put up more than 125,000 buildings. 

They regulated banking and the stock market and gave workers the right to bargain collectively. They established minimum wages and maximum hours for work. They provided a basic social safety net and regulated food and drug safety. And when World War II broke out, the new system enabled the United States to defend democracy successfully against fascists both at home—where they had grown strong enough to turn out almost 20,000 people to a rally at Madison Square Garden in 1939—and abroad. 

The New Deal worked so well that common men and women across the country hailed FDR as their leader, electing him an unprecedented four times. Republican Dwight D. Eisenhower built on the New Deal when voters elected him in 1952. He bolstered the nation’s infrastructure with the Federal-Aid Highway Act, which provided $25 billion to build 41,000 miles of highway across the country; added the Department of Health, Education, and Welfare to the government and called for a national healthcare system.

Eisenhower nominated former Republican governor of California Earl Warren as chief justice of the Supreme Court to protect civil rights, which he would begin to do with the 1954 Brown v. Board of Education decision months after joining the court. Eisenhower also insisted on the vital importance of the North Atlantic Treaty Organization (NATO) to stop the Soviet Union from spreading communism throughout Europe.

Eisenhower called his vision “a middle way between untrammeled freedom of the individual and the demands of the welfare of the whole Nation.” 

The system worked: between 1945 and 1960 the nation’s gross national product (GNP) jumped by 250%, from $200 billion to $500 billion. The vast majority of Americans of both parties liked the new system that had helped the nation to recover from the Depression and to equip the Allies to win World War II. 

Politicians and commentators agreed that most Democrats and Republicans shared a “liberal consensus” that the government should regulate business, provide for basic social welfare, promote infrastructure, and protect civil rights. It seemed the country had finally created a government that best reflected democratic values. 

Indeed, that liberal consensus seemed so universal that the only place to find opposition was in entertainment. Popular radio comedian Fred Allen’s show included a caricature, Senator Beauregard Claghorn, a southern blowhard who pontificated, harrumphed, and took his reflexive hatred of the North to ridiculous extremes. A buffoon who represented the past, the Claghorn character was such a success that he starred in his own Hollywood film and later became the basis for the Looney Tunes cartoon rooster Foghorn Leghorn.

—

Notes:

“Gala Throng Hails Opening of Opera,” New York Times, October 29, 1929, p. 28.

John Kenneth Galbraith, The Great Crash: 1929 (1954; rpt. New York: Time Incorporated, 1961), pp. 171, 135–153, 158–160, 161–167, 214–218.

Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency, 1920–1933 (New York: Macmillan, 1952), pp. 30–31.

Frederick Lewis Allen, Only Yesterday (New York: Harper & Brothers, 1931), pp. 332, 340–341.

“22,000 Nazis Hold Rally in Garden,” The New York Times, February 21, 1939; Ryan Bort, “When Nazis Took Over Madison Square Garden,” Rolling Stone, February 19, 2019.

Dwight D. Eisenhower, February 2, 1953, Message to Congress.