The Great Depression; Interview with David Goeppinger. Part 2

Mark. Okay, so you can talk about your dad. My father was chosen as president of the bank probably by default because at the time of 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 chosen president and agreed to serve. And he was confronted within a few months thereafter by depositors who wanted their money. They had signed these waivers, which you haven't gotten into yet, I realize, but the people wanted their money and they were trying to delay the withdrawal of deposits. There was an incident early on of depositing gold coin 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. And these were by and large honest people of integrity who wanted to pay but couldn't. Hey, John H. that was his name, John. What am I going to do? I can't pay this loan that's come and due in three months. What am I going to do? Well, what do you do? And as I say, I remember coming down in the morning and 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 the bank holiday, can you maybe just tell me the story then of this kind of local bank holiday? What exactly, just let that car go by. Oh, Ty. There's a glass case out of his pocket. Oh, okay. What does he want? That's fine. Is that better? Okay, thank you.

Um so. So what was this So what was this kind of solution that was attempted in 1932? As this trauma was developing, there's obviously, it needed some kind of solutions. And a mayor, I believe it was either Champaign or Urbana, Illinois, came up with this idea of a waiver where you waived a right to withdraw your funds from the bank. And that was brought before this group of bankers whose I recall, it must have been July of 1933, had an all night meeting and they decided on that method if the mayor would approve. It took a mayor's proclamation. The city of Boone declared what's called a bank holiday. Not a holiday in the sense of a vacation in which it's time off from 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 a waiver to not withdraw their funds. What happened to the other 5% that had never been able to realize?

I think a court order came along saying they were also bound by the decision of 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 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 have some examples of the kinds of changes there were in prices? During World War I there was a tremendous escalation in agricultural prices, same as there has been in WWII. When the war was over and demand had slackened from our allies and from ourselves to keep the army, a huge army afloat, prices fell where corn was worth about 23 cents a bushel, hogs about $3.40 a 100, cattle I think a dollar more about $4.40 a hundred, $4.50 a hundred, which was disastrous. Real estate taxes of course stayed at their inordinately high level like they are now.

The counties didn't suffer, 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 businesses in the area that would be affected as farmers couldn't pay back? Certainly 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. 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 there are people with whom they did business, their wholesalers were unable to collect their money. So it was just a, well domino is the only word to use. You told Robin something, I wonder if you could repeat it for me.

You 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 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 farm had been foreclosed, the people would actually, and I guess it was going to be auctioned off? 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's sale and give it back to the 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 a 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 some of those penny auctions but not here in Boone.

I was wondering how the atmosphere of that going on would have affected your father. Well emotionally it was a terrible thing. Like I say, he had friends on all three sides of the coin, he had his fellow depositors in the bank, he was a depositor too. His funds were also frozen. He had to go along with, set an example, there were the stockholders of the bank and when the bank finally did go under, some of those stockholders, since it was a state bank, they were not only lost their stock but they were subject to a hundred percent stock assessment. And there were attempts made in order to not pay that assessment, to transfer assets into your wife's name or members of your family. And of course he knew that was going on and it was in contravention of the law as well as the spirit and that made it hard to face those people. Then of course the borrowers couldn't pay and they were, as I say, honest people by a large degree so that affected them. They come to him, John what can we do? Well what can you do?

You can't pay, your notes due, you borrowed it. You said you'd repay. I promised to pay, the note says, but they couldn't. Do you recall a lot of banks, not your dad's banks, but a lot of banks failing around? Oh my, yes, the state of Iowa, I think, how many banks were there? I can't tell you, 500 maybe? They were in the same circumstance. They not only had money out to borrowers but they had bought bonds of various institutions, city bonds back east of industrial bonds and they declined in value too. This was not just an agricultural depression here, it was U.S. wide and those bonds that had been worth 100 cents on the dollar dropped to 85, 60, 70. And he would say many times, if we could only hang on, hang on to those bonds they'll pay out. Well they did, but they didn't pay out soon enough for the bank to pay their depositors. I need to cut for a second and review my question. Next is John Irving Ketterer, take three.

Yes well corn got to 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 you oftentimes couldn't find a market for. You couldn't find somebody to give you 23 or 27 cents a bushel. So a farmer rather than incur the expense of hauling it to town would burn it in his coal fire stove to keep he and his kids warm during the winter. And it's a very hot burning commodity so that was burned. After all they kept alive that way and 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. Yes. Yes. Can you describe sort of what your dad was seeing the farmers in the area confronting? Is that a way that you could describe the problem?

Well 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 who were, not only the borrowers who were coming into the bank but these people who were on his own piece of land that they were having trouble making a living, keeping things going. So it was a very traumatic thing. He went and visited the farm. These farms were customarily rendered on a 50-50 crop share basis so 50 percent of the crop 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 that the Hoover administration came in with a pledge to kind of help agriculture. They set up a federal farm board in 1929. What do you recall if that was helping the people in this area? Out here there was not the awareness of that help being forthcoming. Could you kind of repeat my question of the sense 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 there 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. So do you recall the Reconstruction Finance Corporation? The RFC was formed. The 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 there was not much help around here. The magnitude was too great. What do people around Boone think about President Hoover? Do you have a sense of how he was regarded as his administration? 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 feel, mistakenly accused of causing some of this great depression. Do you remember, so you didn't have that? Okay, so what did you feel about Hoover? Well, President Hoover was at the tail end of this. I didn't hear it. I'm sorry. Do you need a clap? Yeah. Okay, here we go. Sorry. Four. Four.

Okay. 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. At least, I don't feel reading history as they were his fault. And of course, that didn't alleviate the problem, the fact that he was not at fault. 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 sort of particular expressions or sayings about President Hoover that were popular in the area at the time, things that sort of exemplify 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 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 have known better. I remember that expression being mentioned. Okay. Now, I was just, I'm going back to something we talked about before. Sure. But I was wondering if you could kind of paint this larger picture of how, when the agricultural prices started dropping, the whole system kind of fell down. Well, yes, when agricultural prices fell, the farmer couldn't pay for his groceries, he couldn't 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 Northwestern Railroad. Had a large railroad payroll here, which were, for 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 reduced their payroll as fast as they could, not quite as fast as the farmers suffered. 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 doing very well. And the school system, I believe, noticed that there was 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 the United Fund in those days, but there were 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 began to suffer. So, it was just a general telegraphing. What was it like, sort of emotionally, around the home of a banker? What were the feelings that you sensed? There was a feeling on the part of my father, who was an officer of the bank, that, what can I do?

The noisy truck. Just if you can start again. Yeah, I didn't realize that. Okay. Just start again. When my father saw this trouble coming on, why he was the, he felt that he was 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. After meeting these friends every day, he just hated to go to 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. 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 transferred assets into their family's names. He knew that, and he was trying to collect this money, and it was generally ineffective because of the transfers that had taken place. Now, the farmers did have one response, kind of common around this area, which was this farmers' holiday association, this idea.

Yes. Tell me some about that. They tried to hold back their products. 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. He must bear in mind that the farmer has never been able to organize. He's an independent mind, 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 someplace 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 was done in the case of hogs and milk. So what was the goal? If you can kind of... What to take... Just 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 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 you can only eat so much corn and so much pork chops in a day. That's what they were faced with that, too. The industrial community back east 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 this depression conditions? Oh, yes. There's no doubt about that. But it soon... It did not last, because the farmer, after all, if a 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 the home for you. Do you recall anything in particular about the 1932 elections out of the way? What was the feeling around, Boone, those elections between Hoover and FDR? Yes, there was a feeling that, hey, something needs to be done.

Hoover was ineffective. It was his fault reading into the minds of the people of the electorate. But here comes FDR, who has made certain promises, and there was a dissatisfaction on the part of the financial community 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 the truck. Well there was a feeling that Hoover should have been blamed for it. They did not realize, looking back in retrospect, that the world even in those days was one large homogenous unit and we did depend on each other not as much then as we do now. But there

were forces that were brought to bear on Hoover that he could not have stopped. 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, or you do blame somebody. And he was the one. Where would you have placed the blame for, or what many places might you have placed the blame for the way that things collapsed toward the end of the decade? I would not have placed the blame on the administration. Of course, I'm looking back in retrospect, having seen successive administrations come and go, it was probably greed on the part of everyone who wanted a higher standard of living. The standard of living was just then being increased tremendously. Those were coming into general use, telephones, radios. Hey, why can't I have more of that? So greed was a factor. A lot of it was inescapable.

Okay, great. Can we cut for a second? You did survive. You did survive. Kevin, take five. 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, there was a tremendous individual effort, but nothing community wide. I was wondering if there were efforts from the bank, if your dad's work to try to help people give them an extension of time or try to help them get through. I mean, I just don't know. They couldn't give them an extension of time because they just weren't paying. So the borrower extended his time by not paying, and the bank was holding off thinking, well, maybe tomorrow, mañana, you know. Okay. That's kind of it. Mm-hmm. Okay. Do you feel like things are done so concisely enough for you? We have enough for all of you?

We have three minutes. Yeah. Just specifically. We're going to do give and go take five now. Well, not the legal procedure, but you were talking about what happens if people fall behind and they go to the bank and say, well, I can't pay, and then you have to go out to the farm and you have to get the sheriff and something of the procedure of how. I think the legal details are less. I don't think people care for the legal details. I don't know. It was done. Sure. Sure. Okay. Now, we're going to do give and go take five. Previous was wild track. Yes, that's me. Are you going to roll? Yeah. Hold the roll, sir. This is marked four. Now, it should be five, shouldn't it? Yeah, sorry. Hold on. Okay, sir. Roll. Yeah, speak. And there is. Five, mark. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay.

Okay. 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 implementer 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 side? The emotional toll was terrible because here were people who he knew, hey, we're losing our family farm. My grandfather farmed this place. Some cases 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 here tomorrow morning that want to write a check on the bank to pay the shoe man, pay the grocery store. I have to honor those checks.

Well do it with somebody else's money, but not mine. So there was a tremendous interplay between their favoritism showing 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? 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 and I are suffering and if I happen to get. You'll come to Boone never again. As people wanted their money, they had to have it. 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? Facing friends of depositors and borrowers. Borrowers who wanted to pay and depositors who wanted their money.

There was a great gulf between them. The bank only had so much capital and when that was gone, that was the end of it. It was a terrible trauma. He's going to touch it. That was great. That was very good. Next is room tone for the Geppinger interview. Sure, sure, sure. We just need to sit silently. Okay, recording.