Depression diary has recession lessons
TEXT OF INTERVIEW
Kai Ryssdal: In 1931, in Youngstown, Ohio, a young lawyer named Benjamin Roth started to write down everything that was going on around him. He chronicled the ups and downs of the stock market, the politics of the New Deal, the loss of personal fortunes, the bread lines and the soup kitchens. And he tried to make sense of it. His son Daniel, also a lawyer, worked with James Ledbetter, the editor of the Web site “The Big Money” to publish his father’s work. It’s called “The Great Depression: A Diary.” I asked Dan what he remembers of his father back then.
DANIEL ROTH: He was constantly worrying about where his next fee would come from. He was the sole practitioner. And the thing that amazes me is his ability to dispassionately write these diary entries when at the same time he was worried about how he was going to feed his family.
Ryssdal: Dan Roth, you worked with your father for 25 or 28 years I think it was. Obviously, you must have talked about this diary as it was in production, as he was writing everyday until the 70s I guess, right?
ROTH: I did not know of the existence of these diaries. However, when I joined him in law practice in 1956, the first assignment he gave me was to read these diaries, and his justification was that since I would be working with his clients, he wanted me to understand the trauma that they had sustained during the Great Depression so that in working with these people I could understand their background and their thinking.
Ryssdal: What struck you James, when you were sitting down to write the introduction to this book? What was it that you wanted to capture?
JAMES LEDBETTER: The first is it’s just a tremendous document of the time itself. The second, you can barely pick this book up without opening to a page at random and finding an eerie prescient parallel to what is going on today. This from late 1932, he says: “It looks as if though the Democrats will win because everybody wants a change.” And then on June 1, 1933: “In looking back in over the three months since Roosevelt became president, it seems that the U.S. has traveled a long way toward some sort of socialism or managed economy.” These are the kind of charges that are circulating around today. So those parallels are in some ways reassuring, in other ways very, very chilling. The third point, and I think this is particularly relevant to Marketplace listeners, is we watch Benjamin over time develop a kind of philosophy of investment. He really does his homework and tries to come up with viable investment strategies, by the way all the time not having any money himself to invest.
Ryssdal: He spends a crazy amount of time actually on closing stock prices for companies that he didn’t own any of, for a guy…
LEDBETTER: Kai, you have no idea. We edited out most…we only left in the closing stock prices when it was relevant to the rest of the entry or if he was making a historical comparison. He was I would say nearly obsessive about writing this material down in the belief that patterns would emerge, and an understanding would emerge so that he could become a more successful investor.
Ryssdal: Mr. Roth, my guess is that your father would be horrified at some of things that led us to this credit crisis and the current state of affairs.
ROTH: I’m looking at an entry that James and I both laughed about. June 23, 1932, and he wrote this: “These are stirring days, and in spite of our troubles, it is good to be alive.” But that was the way he thought. So I do not think if he were alive today that he would be critical. He would understand that the people in power are trying to figure out how to help the situation. But I think that he would also say that these things go in cycles and history does repeat itself, which makes us wonder how much longer this current economic situation can continue.
LEDBETTER: I personally wish I could read Ben Roth on a credit-default swap. That’s all I have to say.
Ryssdal: Daniel Roth and James Ledbetter are the editors of a book written by Mr. Roth’s father, Benjamin Roth. It’s called “The Great Depression: A Diary.” Gentleman, thanks very much for your time.
ROTH and LEDBETTER: Thank you, Kai.
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