at mercy of Depression
Bunty MacDonald remembers seeing her father sitting pensively at the dinner table in October of 1929. She was told to be very quiet, not to make much noise.
Something about stocks ... a crash ...
"I remember it was a black day," MacDonald said. "It was a black day."
That black day stretched into several black years, coloring the life of every person in every home in every city and town in the region ... and the nation.
Ironically, much of the merry-making that categorized the roaring '20s helped drive the country into its darkest decade -- the Great Depression.
The economic fall
The fall began with a national economy that had doubled its industrial production from 1921 to 1929.
But even amidst the prosperity, agriculture, mining and cotton textile manufacturing had already hit hard times. Advancements in technology swept away jobs faster than it created them. More goods were being produced than Americans could afford to buy. And the gap between the rich and the poor widened, with about 5 percent of the population taking home a third of the nation's personal income, according to Carolyn Kott Washburne in "America in the 20th Century: 1930-1939."
But all the while, the great bull market charged ahead. Investors continued unprecedented stock purchasing, despite that by 1927, the price of most common stocks had inflated well beyond the earning power of their respective corporations, Kott Washburne wrote.
Furthermore, many investors continued the dangerous practice of buying stocks "on margin," or with 10 percent of the price down and the balance borrowed at overblown interest rates.
Stock prices climbed, as did their industrial average. But all seemed healthy until October 1929 when the nation realized that the economic mansion it had been building was founded on a pit of quicksand. The market then ceased its climb, stocks began to fall, and the mansion began to topple.
Panic soon ensued. A record 16,410,030 transactions took place on Oct. 29, as investors instructed their brokers to sell, sell, sell to beat the market's dizzying drop.
Bankers and brokers demanded repayment for the stocks bought on margin, and runs on the banks began.
In Hammond, not one bank survived, and the city became the largest of its size in the nation to be without a bank.
Bank of Whiting owner Henry Schrage, however, vowed to save his bank from the clutches of bankruptcy.
"A lot of people defaulted on their loans," said Doris Schrage, wife of Henry's son, Wally. "Any loans that went bad, he said would be paid out of his estate."
The Bank of Whiting, now called Centier, survived.
But many other borrowers had no recourse but to declare bankruptcy when their customers clamored for cash.
Sam Sax had his money put away in a bank in Indiana Harbor at the dawn of the Depression.
He had been saving up for college at the close of the '20s under an agreement with his brother that they would both contribute to paying for their college education.
Both boys were in college in 1931.
"Everything was going pretty good until about December of that year when the banks went busted," Sam said. "Everything I had was not guaranteed, and it all went down the drain. They just closed the banks."
Sam lost about $5,000, and his brother had to drop out of school. Playing in a band, though, gave Sam security. Over the next 10 years, he used those earnings to take intermittent courses and get his bachelor's degree.
The situation across the region was grave.
The steel mills were operating at between 10 and 15 percent capacity, said Lance Trusty, professor of history at Purdue Calumet. In Hammond, the huge Pullman-Standard plant closed, not reopening again for 10 years.
Less than half of the people in the region held full-time jobs, Trusty said.
Cliff LaReau had been working at Lesser's Jewelry in Hammond when the banks began to falter in 1930.
"One night the people I was working for gave me a check for $40 and told me they couldn't afford to pay me no more and that I should go look for another job," LaReau said.
LaReau bounced around from job to job for a couple of years and then settled down at Harvey Brothers, a men's clothing store, where he worked for the next eight years.
During the Depression, times were hard for most people. Families had to invent creative ways to pay their debts and food bills.
Many found themselves waiting for a pail of food in "soup lines," and some took up shelter at a local settlement house. Others sat down in front of the region's numerous factories, hoping a foreman might call them to work.
MacDonald's father, Leslie Bain, owned an insurance company, and therefore was able to work during the Depression. Nevertheless, times were hard on everybody, and MacDonald remembered wearing the same dress over and over.
"A lot of people owed money," MacDonald said. "I remember my parents talking about if they could just get some of the money, it would help."
"It was terrible, so hopeless," Maurice O'Hern, a teen-ager in Hammond during the onset of the Depression, said shortly before his death. "You couldn't find a job. It was so frustrating. You didn't know what you'd be doing next week, next month, next year or tomorrow. There was just no planning at all."
O'Hern's father, Dennis, kept his job, but did not work a full week. Maurice tried to find any work he could, cleaning out basements and doing other odd jobs, but he never made enough money to really help out the family, he said.
One of Gary's earliest residents, Samuel J. Duncan Sr., struggled with payments on a house the family had built in 1920, said his daughter, Julia Duncan Ballenger.
Duncan was working several jobs, but he was also was trying to put his children through college, Ballenger said. He couldn't afford the $90 monthly payments, and the family lost the house.
Other people committed suicide, such as a 47-year-old unemployed steelworker who swallowed carbolic acid because he could not provide for his wife and three children, wrote James B. Lane in "City of the Century."
The Depression was one of the hardest points in America's history. And as if it had been through a battle, the region had some casualties -- individuals and businesses alike.
Only a real war, and the production demands that accompanied it, finally permitted the region to emerge victorious.