Salt Lake City and the Economy, One Year after the Stock Market Crash

by JOEY KINGSTON

Salt Lake City has a rich economic history that dates from the time it was settled in July 1847. That history is discussed in detail in the July 25, 1914, issue of The Salt Lake Tribune. When Latter-day Saints settlers arrived from the East, they quickly found that the Salt Lake Valley had a large reserve of copper just west of the Wasatch Front.

Salt Lake Tribune article published in November 1919 observed that mines quickly sprang up in the Salt Lake Valley and became an asset to Utah’s economy.

A view of Main Street, in downtown Salt Lake City, where most businesses were located. The image was made shortly before the onset of the Great Depression.

A view of Main Street, in downtown Salt Lake City, where most businesses were located. The image was made shortly before the onset of the Great Depression. Special Collections Department, J. Willard Marriott Library, University of Utah.

Today the economy of the Salt Lake Valley is still strong, but has changed drastically from the mining town it once was. Looking at downtown Salt Lake City today, one sees high-rise business buildings and large universities. Now one of the largest industries in the Salt Lake Valley is the banking industry, with the Chase tower and Wells Fargo tower located downtown. The economy is strong and the unemployment rate is low. But Salt Lake wasn’t always one of the economically strongest cities in America. There was a time, in fact, when it had one of the highest unemployment rates in the US, and poverty was at an all-time high. It all began in 1929, when the stock market crashed at the end of October.

Before the stock market crash, most people were either employed by the mining companies just west of Salt Lake or worked in factories in Salt Lake. But what was the city like a year after the market crash? We know that the effects of the stock market crash weren’t really felt in the first couple of months. Many commented on the stock volatility, but many were optimistic at first. Then after several months, the full effects of the crash were realized. We will take a look at what Salt Lake City economy was like a full year after the 1929 stock market crash on Wall Street.

One of the many mines that were located just west of Salt Lake City. They were the driving force of the economy in the 1920s, but saw difficult times in the '30s. Special Collections Department, J. Willard Marriott Library, University of Utah.

One of the many mines that were located just west of Salt Lake City. They were the driving force of the economy in the 1920s, but saw difficult times in the 1930s. Special Collections Department, J. Willard Marriott Library, University of Utah.

By the end of 1930, the stock market crash had reached all parts of the United States. Utah and the Salt Lake Valley had been hit especially hard. Their main source of employment had come to a halt; the coal industry and agricultural industry had decreased dramatically during that year. The Salt Lake Telegram reported on March 20, 1930, that the poor economy, plus several fatal mine explosions, caused the coal companies to lay off a large portion of their workers. Making matters worse, the agricultural industry In the Salt Lake Valley had decreased by almost half, causing even more local lay offs.

So how bad was it a year after the great depression hit? Some newspapers were optimistic regarding the stock market, claiming that stocks were on a rise and that jobs were being created every day. (Walzer) The reality was quite different, though. An article published in the Salt Lake Telegram exactly one year after the crash tells the story of a man who killed himself and his two sons by jumping off a building. This man had lost his wife the year before, and shortly afterward he lost his job as a tailor and never found a new job. Out of desperation, he committed suicide. While this was not representative of every situation in the Salt Lake Valley, it is a good reflection of the disparity many of the residence were in.

In addition, the coal industry was struggling and the banking industry slowed. (Thomas) In the first year alone, more than 25 banks failed. One particular failure that was a hard hit on the economy in Utah was the Ogden First National Bank. It was one of the largest banks in Utah at the time, reported the Salt Lake Telegram. (August 31, 1934)

The Walker Bank building, built in 1912 and located in the heart of downtown. The bank struggled during the 1930s due to the Great Depression. Special Collections Department, J. Willard Marriott Library.

The Walker Bank building, built in 1912 and located in the heart of downtown. The bank struggled during the 1930s due to the Great Depression. Special Collections Department, J. Willard Marriott Library, University of Utah.

At the year mark the Depression was in full effect in Salt Lake City and the whole valley. Unemployment was at an all-time high, reaching over 10 percent, according to Dean May. That statistic was one of the highest in the country, and was still rising. This was one of the lowest points in Salt Lake City’s history. Although unemployment was at an all-time high, there were several reports of local stimuli as well as government-assisted stimuli that were put in place. On October 30, 1930, the Davis County Clipper reported construction of a new office building. Its purpose was to offer office space at a cheaper rate than that of a similar building in Salt Lake City and thus stimulate small business in Salt Lake City and encourage the employment of more people. This is not the only case of artificial stimuli being implemented in the Salt Lake Valley. In December 1930, the Clipper reported that the federal government was getting involved. The proposed project was a new waterway system to be put in Salt Lake City to supply clean water to residents. This stimulus project was supposed to employ up to a thousand new government employees.

Alexander writes that by the one-year anniversary of the stock market crash, things were steadily worsening. The first year there was an additional 5.1 percent of unemployed. That doesn’t sound too bad, but the jump from the first year and the second year was 21.9 percent unemployment rate. The government knew it needed to get involved. Unfortunately, the federal government was spread thin at this point, so most of the burden fell on county government and private relief. At the time one of the largest groups in Salt Lake City was people of the LDS faith. Dean May wrote that in Salt Lake City at the time, about half the residents were members of the Church of Jesus Christ of Latter-day Saints. Most of the aid came from the church’s relief programs. Over 70 percent of the families receiving welfare from the LDS relief programs were not of that faith.

Salt Lake City was one of the hardest-hit cities in America. The stock market crash affected not just individual families but also whole communities. The first year was a hard year and it only got harder thereafter. Dozens of banks shut down, farms went out of business, and the mining industry suffered. The unemployment rate was growing and people were in the pit of despair. Welfare programs were just coming to the rescue, but help was hard to find. The year after the great Wall Street crash was a tough time for people in the Salt Lake Valley — and the worst was yet to come as the Great Depression took hold.

Joey Kingston is a junior at the University of Utah majoring in marketing with a minor in media communications. He expects to graduate in spring 2015.

Sources

“Cement firm sues Ogden state bank,” The Salt Lake Telegram, August 31, 1934, 5.

Edward Pickard, “Inland water way projects being pushed thorough to give jobs to unemployed,” Davis County Clipper, December 5, 1930, 3.

“New office building announced,” Davis County Clipper, October 31, 1930, 6.

Elmer Walzer, “Stock values climb fast as trading ends,” Salt Lake Telegram, October 30, 1930, 6.

“Man kills self after two attempts fail,” The Salt Lake Telegram, October 30, 1930, 5.

“Mine inspector blames lack of supervision in fatal mine explosion,” The Salt Lake Telegram, March 20, 1930, 8.

“Banker defends mining industry,” The Salt Lake Tribune, November 14, 1919, 2.

“Pioneer day celebration is big success,” The Salt Lake Tribune, July 25, 1914, 4.

Alexander, Thomas. Utah, The Right Place. Salt Lake City: University of Utah, 2003.

May, Dean. Utah: A People’s History. Salt Lake City: University of Utah, 1987.

 

Advertisements