Benjamin Roth was born in New York City in 1894 and moved shortly thereafter to Youngstown, Ohio. He received a law degree and moved back to Youngstown after serving as an Army officer during World War I. When the stock market crashed in 1929, he had been practicing law for approximately 10 years, largely representing local businesses. After nearly two years, he began to grasp the magnitude of what had happened to American economic life, and in June 1931, he began writing down his impressions in a diary that he maintained intermittently until he died in 1978. His perceptions and experiences have a chilling similarity to our own era, and The Big Money believes that Roth's words—though they are 75 years old—have much to teach us today; we'll be serializing several excerpts.
Aug. 10, 1931. I note in today's Legal News that the K--- home on Coronada Ave. is being foreclosed by the bank on a 7500.00 mortgage. It can be bought for the price of the mortgage and is worth 16,0000.00. This and many other bargains are being offered today. The Legal News carries advertisements today of 78 sheriff sales to be held within the next 30 days. In almost every case the properties will be bought back by the bank for first mortgage plus taxes and court costs. There are no bona fide bidders.
[Subsequent annotation dated Aug. 26, 1936. The K--- property was bought eventually by the U--- family for about 7500.00 but instead of using cash they used [local bank] passbooks which were selling at 50 cents on the dollar. This family has bought much real estate this way and in the next few years will reap a harvest.]
Aug. 17, 1931. I just came back from a short stay at Geneva-on-the-Lake. Summer resorts seem to be particularly hard hit. Hotels are empty and everybody is bidding for business at cut-rate prices. This is a good time to buy summer resort homes or even large mansions of the rich people. Nobody wants them at any price because they are too expensive to carry. Many formerly rich families are living in the chauffeur quarters above the garage while the mansion stands closed.
Aug. 17, 1931. Today's [Youngstown Vindicator] carries the news that four of the largest commercial banks in Toledo, Ohio closed their doors (total deposits over 100 million). Also that 11 savings & loan cos. in Toledo stopped paying out money. The conclusion seems clear that savings and loan companies are not good places to deposit money even tho they pay a high rate of interest.
I had lunch and a talk with R--- M--- of the Home Savings & Loan Co. He is not very optimistic about the near future. Says that the city of Toledo is completely tied up for lack of money. 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. He also fears that people who owe money on mortgages will withhold their payments and thus make the situation worse. Foreclosure does not help because there is no re-sale market. The bank simply becomes the owner of the real estate. Moratoriums of one year are being considered on mortgage payments in many states.
Aug. 18, 1931. This town is fast becoming panic-stricken. Everybody is talking about the depression and wondering where it will end. The failure of the 4 big Toledo banks and the stoppage of withdrawals by practically all of the savings and loan companies has tied up everything. There is no money in circulation and all business is at a standstill. Dr. W--- our family dentist stopped me today and urged me to continue to send my family in for dental work even tho we could not pay promptly. This was a very unusual thing for him to do but people have simply stopped worrying about dental needs. If a tooth aches they have it extracted but neglect all other dental services that might be expensive.
Today's Legal News recites that two vacant lots on Main St. in Wickliffe sold for taxes at 25.00 each. I did not bid on them because each carries future special tax assessments of 250.00 each. I suppose I will be sorry 10 years from now.