The stock market crash of 1929 plunged the United States and the rest of the world into the Great Depression. Augustans would get hit hard with the bank failures occurring; but due to two facts, Augusta would be among the first cities to begin to recover.
According to the late historian, Ed Cashin, Augusta actually experienced a bit of an economic crisis before the Great Depression occurred. Augusta’s financial mess was not due to a stock market bubble, but a bug.
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In 1915, the boll weevil attacked and decimated the state’s cotton crops causing a halt to textile production along the canal in Augusta.
Cashin writes in “The Story of Augusta:” “The zest went out of things. The mart no longer bustled, enterprise was discouraged, the vision of empire was lost, the Old South was a legend and the promises of the New South sounded hollow.”
Something else happened just a few years earlier that was a factor in the economic woes for Augusta.
According to Walter Lord, author of the book “A Night to Remember,” the sinking of the RMS Titanic caused shock waves that ultimately hit the pocket books of the “pre-jet jet-set.”
Lord writes that stories, many of them false, about people using their class and status to insure a place on one of the lifeboats gave rise to anger among people against the elite at the time for amassing incredible amounts of wealth; some would even call it outrageous and obscene for the elite to make such an astounding amount of money on the backs of the poor.
Lord writes that the Titanic disaster helped President Wilson and members of Congress get the last bit of political capital needed to ratify the 16th Amendment, which ushered in the progressive income tax and the Federal Reserve Act.
As a result, fewer and fewer Northerners came to Augusta and Aiken’s Winter Colonies, drying up what was left of the tourist trade in the Garden City.
So, Augustans were already hurting financially when the stock market crashed.
According to the Federal Reserve History, the Great Depression was caused by laissez-faire regulation on banks and the stock market itself.
Small business people were enticed to take out loans to play the stock market as if it were the bit-coin of today. People became millionaires overnight.
Those behind the real wealth on Wall Street would routinely plant stories of some new product or invention and would buy stocks when they were low and wait for speculators to jump in and push the value of the stocks through the roof. Once the price peaked, the big Wall Street investors would dump the stock, causing the value to plunge.
Media reports at the time warned that the bubble would burst, but it was the Roaring Twenties. Just like those on the doomed Titanic, people didn’t think the party would ever end.
Until it did.
While banks in Augusta did close, the majority of Augusta’s workers did not have the means to play the stock market and didn’t trust the banks, so far fewer people here lost everything; they really didn’t have anything left to lose.
However, the Great Depression did set-in, causing local business leaders to create an Emergency Relief Committee that, according to Cashin, helped 4,300 people in 1931 and 1932, before federal dollars came to Augusta under FDR’s New Deal.
The New Deal did not “rescue” Augusta, but with the scourge of the boll weevil at least becoming manageable, the textile factories returned to operation.
It would take several years, but the federal money that did make it to Augusta helped create the foundation of the modern city we live in. Clarkes Hill Dam, the New Savannah Bluff Lock and Dam and the modern Waterworks building were all built due to New Deal legislation.
As threats over in Europe turned to mortar fire, America slowly moved to a war economy. Camp Gordon, now Fort Eisenhower, was created in 1941 to serve as a training base and the Augusta Arsenal began pumping out ammunition.
Camp Gordon would offer up jobs to civilians to help feed and properly take care of the soldiers.
By the time war ended in 1945, Augusta was set to experience almost unprecedented growth, leading it to eventually claim the title of Georgia’s second largest city.
…And that is something you may not have known!
Scott Hudson is the Senior Investigative Reporter and Editorial Page Editor for The Augusta Press. Reach him at scott@theaugustapress.com
