Traverse City weathers Great Depression

BY LORAINE ANDERSON
landerson@record-eagle.com

March 28, 2009 12:00 am

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The October 1929 crash came at a time when economists, President Herbert Hoover and the American public brimmed with optimism and confidence in prosperity and the U.S. economy.

"The poorhouse is vanishing from among us," Hoover said in 1928 when accepting the Republican Party nomination for president.

American humorist Will Rogers described the situation differently a few years later after it became clear our nation's "prosperity" in the 1920s rested on the shaky foundations of an unregulated banking industry and stock market. The United States was "the first nation in the history of the world to go to the poorhouse in an automobile," he said.

Traverse City weathered the Great Depression-era of the 1930s better than many places, for several reasons.

The city had a lot of practice digging out of economic sinkholes following the demise of the lumber era in the early 1900s. It confronted the Great Depression with the same can-do optimism and organized action. It had a strong newspaper and strong banks.

It had the vision and energy of benefactor R. Floyd Clinch and former city Commissioner Con Foster.

By 1930, Clinch and Chicago investors had constructed a new brick Park Place Hotel. Clinch was the son-in-law of pioneer lumber baron A. Tracy Lay and had overseen the remains of the Hannah-Lay empire since 1905. He died in late 1930.

Foster's brainchild was a bayfront municipal park. He long lobbied for redevelopment of the ugly industrial waterfront to make Traverse City more attractive to its growing number of "automobilists," campers and other tourists. In 1925, he persuaded 52 men to contribute a total of $10,000 to buy what was called the Ott property, a 784-foot strip of land between West Bay and Boardman River that was site of the former Hannah, Lay sawmill complex. The property eventually was donated to the city to create Clinch Park, which opened in 1930. Its first building was an aquarium for native Michigan fish.

Traverse City State Hospital also provided economic stability, as did the area's fruit farming and processing industries. The Cherry Festival was well on its way to being named by the state Legislature in 1933 as the "National Cherry Festival," the state's first successful summer festival.

City makes money

Perhaps the most amazing example of the city's long history of confronting adversity with optimism was its creation of a local "scrip," or currency, tied to a local public work project that created jobs for 150 area unemployed for about a year, until federal New Deal programs could get rolling.

The local public works project was a "cutting edge" response for its time, said Jim Press, a history instructor at Northwestern Michigan College.

President Hoover and many other Republicans did not believe in direct-aid programs to help people, a policy that had disastrous effects. By 1931, an estimated 4 million to 5 million Americans lost jobs, the Record-Eagle reported.

That figure would grow to almost 13 million by 1933. Many, unable to pay mortgages, lost their homes and farms, too. Long lines snaked outside soup kitchens in the nation's urban areas. "Hoovervilles," the name given shanty towns of homeless and jobless, sprouted up across the nation.

By 1933, the national jobless rate stood at 24.9 percent, and it was even higher in Michigan. There is no way to come up with data comparable to today because of different methodologies used to calculate jobless percentages, but estimates based on data gathered at that time and archived today by the Social Security Administration put Michigan's 1933 unemployment rate at 36 percent, highest in the nation. The state collected data between July 1933 and December 1935 for "non-agricultural workers" only and came up with a 45.9 percent unemployment rate for workers in that category.

County figures weren't recorded then, but the economy failed to the extent that even Republican-dominated Grand Traverse County voted for a Democrat, Franklin Delano Roosevelt, in 1932 and 1936.

Hobo Point

Traverse City did not have a Hooverville, but it did have "Hobo Point," on Boardman Lake's west shore years prior to the Great Depression. The Record-Eagle frequently reported problems with beggars and "gypsies" in warmer months of the 1920s. The problem apparently grew by 1930.

A "vanguard of vagabonds" and panhandlers that "drift across the country in the wake of amusements of all kinds" left Traverse City following the Cherry Festival after pilfering fish from the city aquarium, begging for food, offering to work for it or steal it, the Record-Eagle reported on July 12, 1930.

On Jan. 14, 1931, the Record-Eagle noted that about 170 local families, 70 more than the previous year, received help from Grand Traverse County's poor commission. The commission spent $12,000 in the last three months of 1930, compared with $9,000 in 1929. A food allowance of $1 a week was given each person in poverty-stricken families. The commission often sent men to county jail for a meal rather than downtown to save the county money because the sheriff charged the county only 25 cents a meal.

By the time FDR took office on March 4, 1933, an estimated 500 able-bodied men in Traverse City were unemployed, according to Record-Eagle reports.

Times were tough, but there were bright spots.

On March 2, readers learned that the state paid its $27,000 payroll to Traverse City State Hospital workers in cash to help stimulate the local economy.

Petertyl Drugs ran an ad that thanked the hospital. "It's the biggest single cash payroll since the bank holiday started," the newspaper reported. It also was the first cash payment to hospital employees that anyone could remember.

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