Camera Rolls: 312:20-22
Sound Rolls: 312:10-11
Produced by Blackside, Inc.
Housed at the Washington University Film and Media Archive, Henry Hampton Collection.
Interview with David Goeppinger , conducted by Blackside, Inc. on October 30, 1992, for The Great Depression . Washington University Libraries, Film and Media Archive, Henry Hampton Collection.
These transcripts contain material that did not appear in the final program. Only text appearing in bold italics was used in the final version of The Great Depression.*
I'm going to start just by asking you to talk about, about what the business of a rural bank was like. I mean—
A rural bank.
A rural bank.
Oh, rural bank, yes. You don't want any of my biography, you don't want any of that, do you?
No, I'm not worried about that. Just sort of...
Especially, you know, sort of during this time that we're talking about.
So what was a rural bank, like the one your dad was, was running doing in the 1920s in a community like this? What was your business like?
Well, the rural bank was strictly a cooperative of venture between the shareholders and the depositors and the borrowers. They each needed each other. The depositors furnished some money for the bank to operate on, so they could lend out. And the so-called capitalists, that was a bad word in those days, but, as it is now, they furnished the bank and provided the necessary reserves to organize the bank. So the three needed each other.
Was there a lot of expansion going on in the '20s? Did people take, buying a lot of land, buying up a lot of land, taking out mortgages, and so on?
Yes, the '20s were very expansionist. That was one of the reasons for the eventual crash in 1929. That's what started that, because people had a better idea of value than income warranted.
What, so what, a person would come in the bank planning to buy 100 acres, buy what? I mean—
Well, a young man would come in, his, his, his father had died or had retired, and he wanted to buy the family farm, and he needed capital to operate and didn't have much savings, so he came to the bank for capital to borrow to buy some land to start off. Typically 40, 80 acres at that time, and he gradually expanded, for 160 acres was a normal-sized farm. As they got more prosperous, thought they were more prosperous, which was not the case, prosperity was false, they needed more money. And that, that's what gradually got the banks and everyone into difficulty.
So what exactly happened as, can you describe to me the way in which the economic problem kind of developed in? What were the first signs? I mean, I mean, how did it affect the whole—you used an, you used an expression, talking about kind of domino effect. What did you mean by that?
Well, the expansionist philosophy started to prevail. The bank were lending money on, on values rather than the income that was produced, thinking if, if land was over, overpriced, it was not producing any income, that it should, for they overpriced it. People were paying for land, and they lent money on that basis. And the, when it turned out income would warrant paying that much money for land, then they began to run into trouble. The loans were not being repaid on time and they were slow. And some people ran afoul of the law and ran into bankruptcy and other, forced repossessions and all that, because there the dominoes started to fall.
So what was this domino effect? Can you kind of, kind of paint a whole picture for me from the prices fell, and the...?
Sure. Prices started to fall. The crash was in 1929, and that began, the banks across the United States began to fail in large numbers about '30 and '31, and gradually reached agriculture late '31 and early '32, where prices were all inflated, and all of a sudden, when the stock market banged, that also dropped. And that caused asset values to depreciate, and if you borrowed X amount of dollars on a farm and the farm was not worth that much when the loan was due, you couldn't pay. So that's what started the domino effect. And depositors soon, soon heard of that, and they thought, "Hey, if that's the case, maybe I better start getting my money out." And they started to run on the bank.
So, was, was there a lot of fear and anxiety? Could you, I mean your dad was president of this bank?
Well, I mean, what, what was the sort of emotional climate around here? What'd it, what'd it feel like? I mean, were you aware of people being nervous and anxious?
Well, at that, at that time I was 19, 20, going on 21 years old, so I was beginning to be aware of some of those things. The facts of life were becoming aware to me both physical as well as financial. And people wanted their money, and the, the banks were not always able to provide the money to pay off. They were having, having trouble. So they started a waiver where people would sign a voluntary piece of paper that they would not withdraw their deposits. And of course by asking for that, that began to say, "Hey, if I can't get my money, there must be something wrong." And that's what started, the dominoes started falling faster.
Were you, did you feel or did you sense that people were kind of angry at the banks? Was there tension in, in the kind of relationships that...?
There was a terrific amount of anguish and trauma on, on three sides. One from the bankers themselves, who could not meet the demands of the depositors. And these people were all friends and acquaintances. There was anguish on the part of depositors who could not get their money out. And there was anguish on the part of farmers, especially, who were beginning to lose their, their farms because of not being able to pay. And it was just a, a telescoping of one anguish into another. Pretty soon it became a calamity
** , and that's what started this waiver that I referred to. You may not want to get into that now, I don't know, but—
I was going to lead up to it later.
Did your dad ever have to, or did you have personal experience having, watching someone actually get their farm foreclosed on?
Oh yes. Yes, many times, yes. And it was terrible anguish when you had to get a hold of the sheriff and go through a, the legal process to get the farm back. It was much quicker than it is now. The law has been changed now where the borrower has more rights and in effect has more time to redeem his loan than they did then. But it could be, I, I think it was six months usually you had to ask for your money. If you didn't get it then you could foreclose, and the sheriff would take possession of the farm and auction it off and cause the family to leave, ask them to leave, and, in a few cases, force them to leave.
Do you remember how it made your dad feel?
Oh, very, very bad. As I say, all of these people were friends and acquaintances of his, both the depositor who wanted his money...and I can come down, I can remember the morning, coming down, and everybody slept upstairs in those days, I can remember coming down the stairs and see his head between his knees, thinking, "What's going to happen today?"
Could you just, now, that was a great answer, but you said, "He," and my voice is going to get cut out—
[ gap: ;reason: inaudible ]
Oh, okay. We're going to have to switch. That's, you're—
So you can talk about your dad.
Well, my father was chosen as president of the bank probably by default, because at the time of this, this trouble was appearing, no one wanted the job, because obviously there was going to be names called and offenses given and offenses made. And so he was, he was chosen president and agreed to serve. And he was confronted then a few months after by depositors who wanted their money. They had signed these waives [sic] which you haven't gotten into yet, I realize, but they, people wanted their money, and they were trying to delay the withdrawal of deposits. There was an instant early on of depositing gold coins on the table in front of the bank where everybody could see it, the evidence of security. But there was more concern on the part of my father with lenders who had borrowed money and realized they couldn't pay it. And these were by and large honest people of integrity who wanted to pay but couldn't. John H., that was his name, John H., "What am I going to do? I can't pay this loan, it's coming due in three months. What am I going to do?" Well, what do you do? As I say, I remember coming down in the morning seeing his head between his knees, wondering what was going to happen that day. And depositors especially who were friends of his wanted their money. They did exempt churches, charities, and, I believe, lodges. They could withdraw their money, but people who signed these waivers couldn't.
When, when the bank holiday, can you maybe just tell me the story then of this kind of local bank holiday, just what, what exactly...just let that car go by.
So what, what was this, this kind of solution that was attempted in 1932?
Well, as this trauma was developing, they obviously needed some kind of solutions. And a mayor, I believe it was either Champaign or Urbana, Illinois, came up with this idea of a, a waiver where you waived your right to withdraw your funds from the bank. And that was brought before this group of banks who as I recall, it must've been July of 1933, had an all-night meeting, and they decided on that method if the mayor would approve it. It took a mayor's proclamation. The city would declare what's called a bank holiday. Not a holiday in the sense of a vacation. They meant it was time off from the normal activities, where you couldn't withdraw your money. But the amount you owed the bank, of course, was due. But they attempted to stop this procedure of disorderly withdrawals by declaring a bank holiday.
And did it work?
About 95% of the people voluntarily signed the waiver to not withdraw their funds. What happened to the other five percent I've never been able to realize. I think a court order came along saying they were also bound by the decision by the 95. And yes, it worked until about a year later. There was Iowa legislation passed after FDR became president called Senate File 111, which mandated that Iowa banks go into receivership. And that stopped that, that waiver thing, and they reorganized and attempted a more orderly collection of their assets.
I was wondering if you could tell me something about the way agricultural prices fell. Do you remember, I mean, do you have some examples of the kinds of changes in prices?
After World War I was, during World War I was tremendous escalation in agricultural prices, same as there had been in WWII. And when the war was over and demand slackened from our allies and from ourselves, keep the army, a huge army afloat, prices fell where corn was worth about 23 cents a bushel, hogs about 340 a hundred, cattle I think a dollar more, 440, 450 a hundred, which was disastrous. Real estate taxes, of course, stayed at their inordinately high level like they are now. I mean, the counties didn't suffer, they, although there was some land taken over by counties for non-payment of taxes, too. But there was a tremendous drop in asset value.
So when the farm prices fell, can you kind of describe all the business in the area that would be affected as, as farmers couldn't pay back? And...?
Well, certainly it was, it was a domino effect. If you owed money that you couldn't pay the bank, not only could you not pay the bank, you couldn't buy your kids shoes, you couldn't buy clothing, you couldn't pay what the modest amount of tuition was in those days to send your kids to school, the book fees. And the merchants went on credit. The grocery stores at that time were still selling groceries on credit instead of cash like they are now. So that meant that they were piling up tremendous amounts, and their people with whom they did business, wholesalers, were unable to collect their money. So it was just a—domino is the only word to use.
You, you told Robin something, I wonder if you could repeat it for me. You talked, said that corn got so cheap that people were actually just burning it.
Corn was so cheap that it was burned by some farmers for fuel in the winter time. Shoveled it into the furnace. Corn was a very hot item as far as it, it creates a lot of heat, does a lot of damage to the stove, but they needed to keep warm.
Did you ever actually witness, or did your father have any experience with these penny auctions, where, when a, when a farm had been foreclosed, that the people would actually, and I guess it would go to be auctioned off? Can you, can you tell me something?
There was none of that done here. Up in northwest Iowa, O'Brien County, for instance, there was that where farmers would get together, buy the farm at the sheriff, say, "I'll give it back to that fellow that same afternoon." That's the same area that resulted in the attempted lynching of a judge up there who allowed that sort of thing to go on, or fostered it. But that did not succeed. I mean, I don't think he was finally killed. I don't know. But yes, there were, there were some of those penny auctions, but not here in Boone. The...
So was that then—I was wondering how the atmosphere of that going on would've affected your father? If he...?
Well, emotionally it was a terrible thing. Like I say, he had his friends on all three sides of the coin. He had his fellow depositors in the bank. He was a depositor, too. His, his funds were also frozen. He had to go along it, set an example. There were the stockholders of the bank. And when the bank finally did go under, some of the stockholders, since it was a state bank, they not only lost their stock, but they were subject to a 100% stock assessment. And there were attempts made, in order to not pay their assessment, to transfer your assets into your wife's name or members of your family. And of course he knew that was going on, and that was in contravention of the law as well as the spirit. That made it hard to face those people. Then of course the, the borrowers couldn't pay. And they were, as I say, honest people by a large degree. And so that affected them. They'd come to him, "John, what can we do?" Well, what can you do? You can't pay, your note's due, you borrowed it. You said you'd repay. "I, I promise to pay it" the note says. But they couldn't.
Do you recall a lot of banks, not your dad's bank, but a lot of banks failing around? I mean—
Oh my, yes, in the state of Iowa. I mean, how many banks were there? I can't tell you, 500 maybe, that were in the, the same circumstance. They not only had money in, out to borrowers, but they had bought bonds of various institutions, city bonds back east of, industrial bonds, and they declined of value too. This was not just an agricultural depression here, it was, it was US-wide. And those bonds that had been worth 100 cents on the dollar dropped to 85, 60, 70. And he would say many times, "We could only hang, hang on to the bonds. They'll pay out." Well, they did. But they didn't pay out soon enough for the bank to pay their depositors.
Tell me about corn.
Yes, well, corn got be a very cheap commodity. When I said 23 or 27 cents a bushel, I don't remember what I said, that was a nominal value. Often times, you couldn't find a market for, you couldn't find somebody to give you 23 or 27 cents a bushel. So the farmer, rather than incur the expense of hauling it to town, would burn it in his coal fire stove, or to keep he and his kids warm during the winter. It's a very hot burning commodity, so that was burned. That's a, after all, they kept alive that way. It wasn't worth the trouble to bring it to Boone.
So people literally got to the point where they couldn't sell things for what it cost to make them?
So can you describe sort of what your dad was seeing farmers in the area confronting? Is there a, a way that you could describe the problem the farmers had?
Well, I, I should say he owned some land also, a small amount of land, so he realized from the farmer that was on there from a personal angle not only the lenders were, not only the borrowers are coming into the bank, but these people who were on his own piece of land, they were having trouble making a living, keeping things going. So it was a very traumatic thing. He'd go out and visit the farm, he had, these farms were customarily rented on a 50-50 crop share basis, so 50% was his. And he was also suffering when he couldn't sell his corn for 23, 25 cents a bushel.
Do you recall whether the farms and the banks in the area were getting help from the Hoover administration? I know the Hoover administration came in with a pledge to kind of help agriculture. They set up a Federal Farm Board in 1929. What, what, do you recall if that was helping the people in this area?
Well, out here, there was not the awareness of that help being forthcoming. There was a—
Could you kind of repeat my question about the sets of Hoover's policies helping them?
You're asking whether Hoover's policies, which he attempted to start at the end of his office helped the banks, and no they did not. And it was a tremendous change, of course, when FDR came in, and his socialism experiments, that was looked with a great deal of disdain by everyone at that time. 'Course it...
So, do you recall the Reconstruction Finance Corporation?
The RFC was formed, the modern, modern parallel to that is called the Resolution Trust Corporation, they have that in existence now, which was used to bail out the savings and loans. But the RFC was an attempt to bail out the banks, but that was not much help around here. The magnitude was too great.
What did people around Boone think about President Hoover? Do you have a sense of how he was regarded? Was his administration [ gap: ;reason: inaudible ] ?
The same thing as the, President Bush's foes are today, the man in office is blamed for all the misdeeds of the past when they didn't realize some of that was their own fault, so—
Hoover was, I, I feel, was mistakenly accused of causing some of this Great Depression.
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OK, so what'd you feel about Hoover?
Well, President Hoover was at the tail of the—
Well, President Hoover was at the tail end of his administration when these problems were beginning to be exemplified and extended. And he was blamed for things that were happening which were not his fault. Or at least I don't feel really in history they were his fault. And of course that didn't alleviate the problem, the fact that he was not at all. These things were still happening. And a lot of people felt he was, at that time, felt he was forced out of office because it was his fault.
Do you recall any particular expressions or sayings about President Hoover that were popular in the area at the time, things that sort of exemplified what people felt?
No, I don't, except that he was, I remember he was referred to as an engineer, which he was, and was not acquainted with these, with the problems that were existing at the time, they forgot the fact that he did a tremendous humanitarian job in Russia, but these things were happening and they were his fault. "He should've known better." I remember that expression being mentioned.
Now, I was just, I'm going back to something you talked about before. But I was hoping you could kind of paint this larger picture of, of how when the agricultural prices started dropping, the whole system kind of fell down.
Well, the, yes, when agricultural prices fell, the farmer couldn't pay for his groceries, he could pay for his shoes, he couldn't pay his banker. But there was another problem also. Boone was an important division point on the Chicago and North Western Railroad, had a large railroad payroll here, which were in those times, as now, very high paying jobs. And they were not hauling the commodities as a result of the agricultural depression. As a result, their payroll dropped. They used their payroll as, as fast as they could, not quite as fast as the farmers suffered. It, it helped mitigate Boone's situation for a short time, because the railroad payroll was here and was being paid, but that began to drop off about six months after the agricultural situation became severe. But it extended to the schools. I mean, the kids were, they could tell that their dad and mother weren't, weren't doing very well. And the school system, I believe, noticed that there was a, a drop in the interest on the part of students. Churches suffered in their contributions. Community efforts began to drop also. Red Cross, community drives, there wasn't a united front in those days, but there was a host of individual things. Boone had a YMCA, which was railroad-supported. I think half the budget of the Y was supported by the railroad. It was a place for crews to stay overnight. They'd begin to suffer. So it was just a general telegraphing.
What was it like sort of emotionally around the home of a, of a banker? What, what were the feelings that, that you sensed?
There were, there was a feeling on the part of my father, who was an officer of the bank, that, "What can I do?"
When my father saw this trouble coming on, why he was the, he felt he was the butt of the, butt of the problem. Here he was in the middle. He was expected to find a solution, to pay the depositors, to help the borrower redeem his loan, and he was unable to do that. And meeting his friends everyday, he just hated to go work some mornings, I know that. Yet, he was looked on, I think he cut his salary by 50%, which was modest in those days anyhow. And he ran into another problem. As I say, many of these stockholders were forced to pay a stock assessment, and they wouldn't pay, and they'd transfer assets into their family's names. And he knew that, and he was trying to collect this money and it was generally ineffective, because of the transfers had taken place.
Now the farmers kind of did have one response common around this area, which was this Farmers' Holiday Association.
Tell me something about that.
They tried, tried to hold back their products.
Could you say, could you start again and say "the farmers"?
The farmer, in order to cause even a small increase in price got together under various umbrella organizations. You must bear in mind that the farmer has never been able to organize. He's an independent-minded, and that is the case today. Farmers' organizations have been notorious for their ineffectiveness. But they did try to form groups that would dump milk, for instance. If they saw a farmer delivering milk to the dairy, they'd meet him some place out in the country and dump the cans of milk. Hogs were, small pigs were slaughtered and buried. I don't recall that happening to beef cattle, but it, it was done in the case of hogs and milk.
So what was the goal, if you could just kind of—
Well, to take—pardon me. The goal was to remove these products from the marketplace. The less goods you have to sell, maybe the price will go up, because there's always some demand for, for agricultural products. Agricultural demand is also inelastic. That is, after you've had a meal for five cents, I can't sell you another meal. So there, you can only eat so much corn and so much pork chops in a day. And that's what they were faced with that, too, and the industrial community back east was not, didn't have the money then, too, so they couldn't buy the agricultural products.
Do you think that this kind of unusual coming together of the farmers was partly the, I mean, was the result of these Depression conditions?
Oh yes. There's no doubt about that. But it soon, it did not last, because the farmer after all, if the farmer needed money to raise his kids, he wasn't going to dump his milk. That's all he had to sell. It's like shooting your wife. You can't do that if she's providing a home for you.
Do you recall anything in particular about the 1932 elections, out of the way, what, what, what was the feeling around Boone? Those, those elections between Hoover and, and FDR.
Yes, there was a feeling, "Hey, something needs to be done. Hoover was ineffective, it was his fault," reading into the minds of the electorate, but here comes FDR who had made certain promises. There was a dissatisfaction on the part of the financial community with his, with his methods of obtaining relief, but that same method that he used for relief was very acceptable to the people who were going to be the beneficiaries.
So I was just wondering if you could one more time tell me about your feelings about the way Hoover was unfairly blamed for—
Well, there was a feeling that Hoover should not, should've been blamed for it. They did not realize, looking back in retrospect, that the world even in those days was one large homogeneous unit, and we did depend on each other not as much then as we do now, but there were, were forces that were brought to bear on Hoover that he could not have, could not have stopped. And, but that's not the way that people felt. They felt he should be blamed. After all, when you're real hungry and your kids don't have shoes, somebody's got to be blamed for, or you do blame somebody. And he was the one.
What would, where would you have placed the blame for, or, or what many places might you have placed the blame for, for the way that things collapsed toward the end of the decade?
I would not have placed the blame on the administration. 'Course, I'm looking back in retrospect, having seen successive administrations come and go. It was, it was probably greed on the part of, of everyone who wanted a higher standard of living. The standards of living were just then being increased tremendously. Automobiles were coming into general use, telephones, radios. "Hey, why can't I have more of that?" And so it was, greed was a factor. And a lot of it was inescapable.
OK, great. We'll cut for a second.
Well, there was some lifting yourself by your bootstraps, "Hey, I will help my neighbor," you know. If a farmer did have something that his neighbor needed, it was a tremendous individual effort. But nothing community-wide.
But were there efforts, I was, was wondering if there were efforts, you know, from the bank, if you dad worked to, you know, try to help people, give them an extension of time, or try to help them get through? I mean, I just don't know.
Well, they couldn't give them an extension of time because they just weren't paying. I mean, so they, the, the borrower extended his time by not paying, and the bank was holding off, thinking, "Well, maybe tomorrow." Mañana, you know.
The legal procedure, we're talking about when people fall behind, they go to the bank, they say, "Well, I just can't pay." And, you know, then you have to go out to the farm, and you have to get the sheriff, and something about the procedure of how—
I think the legal details are less—
I don't think the people care for legal, legal details.
But, but I think what's really—
Well, as the bank had trouble collecting these loans, the only alternative was for foreclosure. That was the legal remedy. So the bank would go to the courts and get a foreclosure order. And the sheriff was the implementor of that, and he would foreclose on the farmer and take possession of the farm. The farm would then be the property of the bank. In some cases the bank let the people stay on the farm to farm it, but they immediately lost the income from half of it, because the bank retained 50% of the income.
And what was the emotional toll on your dad?
The emotional toll was terrible, because here were people who he knew, "Hey, we're losing our family farm. My grandfather farmed this place. My father farmed it. And here I'm losing it." They'd come to him, "John, what can we do?" "Well, there's nothing I can do. My hands are tied. The law says I must do this to protect my depositors. I've got people coming to me tomorrow morning that want to write a check on the bank to pay the, pay the shoeman, pay the grocery store. I have to honor those checks." "Well, do it with someone else's money, but not mine." So there was a tremendous interplay between their favoritism shown. The depositors thought that some depositors were being paid off and they weren't, and, "How come he got his money and I'm not?" And you, that was never the case.
Was that a characteristic of a bank in a small town? This sort of sense of—
Well, yes. If you're, if you and I are suffering, and I happen to get—
If people wanted their money, and they had, they had to have it, and they couldn't understand why somebody may have gotten their money and they didn't. That was never the case outside of churches and charities. They were allowed an exemption where they could withdraw their money. Why, I don't know.
So, what, was your dad facing friends and—
Facing friends, of depositors and borrowers, borrowers who wanted to pay, and depositors who wanted their money. And there was a great gulf between them. The bank only had so much capital. When that was gone, well, that was the end of it. It was a terrible trauma.
He's going to touch you.
That was very good.