BEFORE “OCCUPY WALL STREET”
NOTES ON PRIOR NEW YORK CITY PROTESTS AGAINST ECONOMIC CRISES
RESISTING THE GREAT DEPRESSION
The speculative binge in stocks and commercial real estate that reached flood crest by the summer of 1929 was driven in part by the buoyant belief that U.S. capitalism had broken out of its boom-and-bust foothills and reached a "permanent plateau" of prosperity. One of the chief believers and participants in this "New Era" of the 1920s was Goldman Sachs' helmsman Waddill Catchings, whose best seller The Road To Plenty argued the business cycle was no longer a threat. Catchings led Goldman Sachs in a plunge into investment trusts by setting up the Goldman Sachs Trading Corporation, which – shades of Duer days – was immediately oversubscribed, despite not having begun operations.
Walter Sachs fretted, urged caution about the highly leveraged operation, but to no avail, and it became one of the largest investment disasters in the twentieth century (to that point). By 1931 out of the $172.5 million lost by the fourteen leading trusts, Goldman Sachs accounted for $121.4 million. Catchings was forced to resign. Sachs regretted "we weren't smart enough, perhaps – or perhaps we were too greedy, too – but we didn't stop it in time." Sidney Weinberg, the next-up commander, would be big on tough capital retention, and keeping payout to partners low, forcing them to build up equity in the firm.
By then, of course, the whole economy had come tumbling down, and, once again, protestors had taken to the streets.
On the morning of March 6, 1930, a New York Times headline blared: "ALL POLICE ON DUTY TO AVERT VIOLENCE AT RED RALLY TODAY / WHALEN TO COMMAND BIG FORCE EQUIPPED WITH TEAR AND GAS BOMBS AT UNION SQUARE."
Wanamaker executive Grover Whalen had recently returned to government service as Police Commissioner. The onetime major domo of New York's ticker tape parades had not lost his flair for frenzied public relations. The night before, Whalen had given the press the text of an unsigned letter. It alleged that the next day, on orders from Moscow, Reds would destroy City Hall, the Woolworth Building, Police Headquarters, the New York Stock Exchange and, for good measure, assassinate Al Smith and John D. Rockefeller. To ward off such horrors Whalen ringed Union Square with a thousand wrought-up policemen, and stationed firemen, hoses at the ready, next to every hydrant. Nonetheless he was caught off guard that morning when mammoth formations of sign and placard toting Communists poured into Union Square from side streets. The cadre were soon joined by masses of additional partisans and sympathizers disgorged from the subways, eventually forming a congregation 100,000 strong ("one of the largest crowds ever seen there" said Whalen).
The meeting indeed had roots in Moscow -- the Comintern had called for coordinated worldwide demonstrations on International Unemployment Day -- but the size of the outpouring startled organizers too. The throng cheered speakers' demands for vigorous governmental action: public funding of immediate emergency relief; an unemployment insurance program; a seven hour day and a five day week; abolition of child labor; an end to evictions; a public works program at union pay scale; and recognition of the U.S.S.R. Apart from the last, whatever their original inspiration, these were home-grown demands, familiar to New Yorkers (radical and moderate alike) who had been calling for such programs over several generations, especially during the many prior depressions.
The organizers now called on the crowd to march down to City Hall where they would present their petition directly to Mayor Jimmy Walker. Whalen summoned the leaders to his command post in the Square. He forbade the march. The leaders promptly returned to the speakers platform, reported Whalen's ukase, noted that streets which were routinely handed over to monarchists, militarists, capitalists, and assorted celebrities would now be denied to workers, and asked "Will you take that for an answer?" The crowd bellowed "No!" and turned toward Broadway.
At this point Whalen's inflamed thousand man force and 300 mounted police charged in, their "faces contorted and raving and cursing" (according to the World), and began to indiscriminately slug, club and kick demonstrators and assorted bystanders. Boys were beaten by gangs of seven or eight cops, women struck in the face with blackjacks. Firemen turned on their hoses. Most fled the flailing police, stumbling over one another to get away, but some fought back savagely, hurling curses ("Murderous Cossacks!") and occasionally bricks.
Despite this battle, and Whalen's shutdown of the subways, thousands of protestors made their way to City Hall Park. When the leaders arrived to present their petition they were immediately arrested. (They would serve six months in jail). Whalen sent in armored motorcycles and police equipped with tear gas, smoke bombs, submachine guns, rifles and riot guns. After a few more skirmishes the day was done, with four police and over 100 civilians injured.
The Communists, catapulted to prominence by this battle, had been galvanized into action by the events which seemingly had confirmed their darkest predictions (and greatest hopes) about capitalism's imminent demise. They would remain major players in the city for the remainder of the Depression decade. But as a self-appointed vanguard of the working class, they left much to be desired. They embraced a Stalinoid disdain for internal democracy, engaged in endless doctrinal wars, brandished ultra-revolutionary slogans, and engaged in vituperative sectarian attacks on "social fascists." Above all, the top leadership at national headquarters off Union Square followed every twist and turn of the party line coming out of Moscow (though local cadre often took independent initiatives). They did so not from cravenness, but from a messianic conviction that by aligning themselves with a vast international movement, they would share in its ultimate triumph. In the end, the broken field running this fealty engendered would prove ruinous.
In the short term, however, it gave the Communists terrific energy (the more devoted put in ten to twelve hour days -- "maybe 16," one radical recalled, "if you counted yakking time.") And their analyses of capitalism's systemic crisis, no matter how crudely fashioned, rendered them ideologically invulnerable to the creeping paralysis which overtook so many of the unemployed. The bulk of the jobless saw their condition as a personal failure, blaming themselves -- or at best an implacable fate -- for their shameful inability to find work. But while many sank into apathy and hopelessness -- Depression breeding depression -- Communists leapt to the barricades. And though their Unemployed Councils (whose slogan was "Fight!--Don't Starve") won few permanent adherents, thousands of angry people, hungry for an opportunity to protest their slide into poverty, seized on the opportunity afforded by Communist-led initiatives.
In the Fall of 1930, the Unemployed Councils began resisting evictions. Squads carried the furniture of displacees back into their apartment, and fashioned meter-jumps to restore disconnected electric service and gas. If marshals and police showed up, organizers appealed to neighbors -- many of whom were unemployed and ready-to-hand -- to block them from interfering. By the Spring of 1931 there had been thousands of such incidents, not only on the Lower East Side and Brownsville where the Party boasted a mass membership, but in Harlem, Hell's Kitchen, South Bronx and Coney Island, where their ranks were far thinner. This grass roots protest, peaceful for the most part, was astonishingly successful in restoring families to their homes, or at least delaying their final departure.
In the next Depression winter of 1931, the Communists escalated, launching wholesale rent strikes. Organized tenant leagues -- under the slogan "No Work, No Rent" -- demanded that building owners either reduce rents in response to mass unemployment (as employers demanded workers accept pay cuts in hard times), or "carry" tenants until they got work again. Though they did not call for the abolition of private rentals, or assert a basic right to free housing, their insistence that property rights were not sacred, and that in hard times landlords had no right to evict, struck directly at the propertied's profit margins, and even their ability to hold on to their investment. They responded to this deadly threat with fury.
The Great Rent Strike War of 1932 began in a quiet section of the Bronx, just east of Bronx Park, near the Zoo and Botanical gardens. The neighborhood was home to one of the largest concentrations of Communists in New York City, especially in the modern elevator`buildings at the corner of Bronx Park East and Allerton Avenue. Many of these skilled workers, who had moved up from the Lower East Side and South Bronx, had extensive activist backgrounds in the city's bitter garment strikes or in clandestine revolutionary struggle in Europe. They were not about to give up their hard won status and sink into poverty and despair without a fight.
In January 1932 the Upper Bronx Unemployed Council unveiled rent strikes at three large apartment buildings, demanding a 15% reduction in rent, an end to evictions, and the recognition of their tenant committee as official bargaining agent. The landlords moved to dispossess and got judges to grant eviction notices. When marshals and police arrived they found a huge crowd, over 4,000 strong, the majority of them enraged women from the community. When the marshals attempted to move out furniture, the crowd charged the police, fists, sticks and stones flying, shouting "Down with Mulroooney's Cossacks!" A compromise offer was advanced and accepted, and the crowd cheered the settlement, chanting the Internationale and waving copies of the Daily Worker in triumph.
Bronx landlords now organized anti rent strike committees, pouring money and political influence into the campaign. But the movement spread rapidly to other even poorer areas in the Bronx (like Crotona Park East) and hopped borough boundaries to Brooklyn. A formidable outbreak on Charlotte Street in December 1932 kicked off a new winter wave of resistance, affecting hundreds of buildings, involving thousands of protestors in occasionally epic street battles with police. The Communists were in heaven, relishing each confrontation as a step toward radicalizing the masses, and so were the tenants, who won a myriad of substantial victories. But the atmosphere of burgeoning communal revolt terrified and alienated the city officials, municipal judges and politicians who had been sympathetic up to this point. They swung behind the landlords, slapped picketers with injunctions, and snuffed out the revolt.
Despite this momentary victory, it was clear that something had to be done about the housing crisis. While the Communists stuck to short-term action programs, the Socialists began calling for long-range housing initiatives involving municipal ownership and construction of homes for the working masses.
More broadly, as the depression had deepened, demands had increased that Walker do more to combat unemployment. Following up the March 1930 Communist-led rally in Union Square, radicals had mounted an October 1930 demonstration at City Hall. Chanting "We want Work or Wages" and singing the Internationale, they demanded unemployment relief. Mounted police rushed the crowd, precipitating a pitched battle. In the uproar a small group slipped inside and tried to present proposals to Walker, presiding at a Board of Estimate meeting. When gaveled down, one 21 year old Communist spokesman denounced him as "a grafting Tammany politician and a crook." For once the imperturbable Walker lost his cool, shouting: "You dirty Red! In about two minutes I'll jump down there and smash you in the face." Forestalling their boss, police threw the protestor down the stairs and beat him with nightsticks and blackjacks, leaving a pool of blood on the rotunda floor.
The point had been made, however, and the very next day the city appropriated a million dollars for emergency hiring of the unemployed in city departments and another million for the Bureau of Child Welfare. These were New York's first official actions against the depression.
Within weeks, Walker announced formation of an Official Committee for Relief of the Unemployed and Needy. It was in fact an un-official, Tammany-style effort which solicited donations from municipal employees, and dispensed food, clothing, coal and rent money at police precinct houses. At the Board of Education, teachers and administrators donated 1 percent of their salaries to provide lunches and clothing to thousands of schoolchildren.
Social workers denounced Walker's charity program as haphazard and politically motivated (unemployed Democrats did fare better than others). In February 1931 a mass meeting at Town Hall demanded the city establish a professionally run $10 million program to provide emergency jobs.
Walker agreed. He sought and received permission from the state legislature to issue bonds for the undertaking. Within two months he had launched a municipal job program. By November some 17,500 New Yorkers were at work repairing highways, roads, sewers, parks, and public buildings. But given the need, this was pathetically inadequate.
The Mayor agreed, but noted that he confronted stern legal limits. These had been imposed -- as Walker pointed out to the social workers now clamoring for more municipal assistance -- by their own parsimonious predecessors who back in the 1870s depression had won a ban on "outdoor relief." It was apparent, therefore, to social workers and city officials alike, that sustainable assistance required State intervention. But would Albany be willing to help?
For much of his first term (1928-30), Governor Franklin Roosevelt's attention had been focused upstate; his sympathy with city folk seemed open to question. Yet the Governor would need metropolitan support to win the White House in 1932. Such political considerations, together with the upheavals in New York's streets, a hunger march on Albany, his own Grotonian sensibilities, and the prodding he received from urban liberals who Eleanor brought into his ambit (Lillian Wald, Mary Simkhovitch, Rose Schneiderman, and especially Frances Perkins) -- all combined to spur him to action.
In August 1931, the Governor summoned the New York State legislature into special session. Informing lawmakers that neither private charity nor local government could any longer adequately care for the unemployed, he declared: "To these unfortunate citizens, aid must be extended by government -- not as a matter of charity, but as a matter of social duty."
Within a month, the State had established a Temporary Emergency Relief Administration to channel money into local work relief and home relief programs. (New York City's charter clause prohibiting outdoor relief was superseded). In the fall of 1931, melding its own resources with TERA funds, New York City established an Emergency Work Bureau. It offered employment to people who passed a "means test" proving their destitution. At the Bureau's Southern Boulevard headquarters, fifteen hundred people tore down the door as they rushed in to the interviewers. By September 1933, 110,000 individuals held emergency jobs.
At the same time, the city set up a Home Relief Bureau, run by the Department of Public Welfare. It opened 79 offices all over the city, in schools and other public buildings. These, too, were deluged by applications from needy families. Within a year the Home Relief Bureau was supplying 50,000 families with food (rice, flour, beans, dried fruit), clothing (dresses for girls, knickers for boys), and fuel.
By 1932, therefore, private philanthropy's annual relief expenditures had gone from $2½ million to $19 million, and annual public relief had climbed from virtually nothing to over $80 million. But the need had soared farther and faster, outstripping both these efforts.
Home Relief was patently inadequate. Single men were completely ineligible. Single women and childless couples received next to nothing. Even approved nuclear families were aided below subsistence level. And the funds were intermittent as well as insufficient: in January 1932 funding stalled and Home Relief was suspended altogether until crowds stormed offices demanding food.
New York City approached its fourth depression winter (1932-3) with dread. One third of its working population was unemployed. Centralized private philanthropy was bankrupt. The Mayor's and the Board of Education's funds had been swallowed up. Private agencies had stopped taking on new cases. TERA funds were giving out. Home Relief Bureau stations had stopped registering new recipients and cut aid for families to $2.67 a week. 20,000 children had been placed in institutions by parents who could no longer provide for them.
It had become patently obvious that neither private, nor city, nor even state resources were sufficient to cope with the collapse. Pleas for federal intervention now cascaded in from social workers, church leaders, reformers, and government officials. But no one articulated the matter better than the supposedly feckless Jimmy Walker, who in June 1932 told a meeting of mayors: "We of the cities have diagnosed and thus far met the problem; but we have come to the end of our resources. It is now up to the Federal Government to assume its share."
New York's top representatives in Washington agreed. In the Senate, Robert Wagner held up newspaper photos of metropolitan breadlines and pushed for public works and emergency aid. In the House, Fiorello La Guardia called for relief programs, unemployment insurance, public housing, and "Soak the Rich" taxes to pay for it all.
Such efforts were shunted aside by the Hoover Administration. The President refused to bring Federal resources to bear, fearing public works programs would undermine private capital and lead to corruption and collectivism. He worried that relieving the unemployed would unbalance the national budget, subvert recipients' characters, and undermine the Republic. And despite his reputation as a great humanitarian, he made light of popular suffering. "Nobody is actually starving," he said in 1932. "The hoboes, for example, are better fed than they have ever been. One hobo in New York got ten meals in one day."
As the situation worsened, Hoover authorized exceptions to his hands-off policy -- but only for the corporate sector. In January 1932 came establishment of the Reconstruction Finance Corporation -- a public entity which by year's end had loaned almost two billion dollars to foundering railroads, insurance companies and banks.
The trickle-down theory justifying this intervention -- which one wit characterized as "feeding the sparrows by feeding the horses" -- proved a spectacular failure. It was not a lack of credit that was stifling the economy, but a lack of profitable investment opportunities. So troubled firms used the handouts not to create jobs but to repay creditors -- chiefly New York City banks.
Senator Wagner excoriated Hoover's hypocrisy, noting the President preached "rugged individualism" only to the poor, not to railroad presidents and bankers. An enraged Congressman La Guardia called the RFC a "millionaire's dole" and the housing plan a "Bill to Bail out the Mortgage Bankers." When Hoover in May 1932 called for bailing out commercial banks La Guardia called for nationalizing them instead. "The bastards broke the People's back with their usury," he roared. "Let them die, the People will survive."
It would take an electoral upheaval and inauguration of the New Deal – the transfer to Washington of programs tested in New York City and State – to begin to make good on this assurance.
[Adapted from Wallace, Gotham II, Chapters 28 and 29, in progress;
for more on the New Deal's impact in Depression-era New York City,
see A New Deal for New York, available, free, at http://www.gothamcenter.org/newdeal]