Question for Forumite scholars: What effect did the great depression have on the public's treatment

SanctionII · November 5, 2006 3:16AM

I post this thread after partially reading Oroville's thread on $300 Trillion in Derivatives.

That thread caused me to think about the great depression of late 1929 through the 1930's. My understanding is that the depression did not effect life for poor people (they were poor before, during and after the depression and largely took care of themselves by growing their own food, making their own clothes, fixing their broken tools, etc.). It did however result in job losses, income disruption, loss of assets [i.e. homes] of many persons who had previously been doing well for themselves.

What effect did the great depression have on collectable coins (i.e. less discretionary money to buy rare coins, thus less demand for the available supply, thus lower prices for those coins on the market for sale, thus longer inventory hold periods for dealers, thus some dealers going out of business, thus dealer inventories being liquidated, thus more downward pressure on prices, thus some coins we view as rarities today being sold for a pittance or simply being locked way by those with "strong hands").

Further, what effect did the great depression have on the way the public dealt with circualting coinage, including coins already in circulation and coins newly released from the mint (hoarding of gold coins before and after Roosevelt made private ownership of gold illegal, hoarding of silver coins, reduced production from the mint, perceived rarity of a new issue and thus hoarding same by the public, corporate/business practices with regard to coins, bank practices with regard to coins, etc.)

If you please, favor us with your knowledge on this subject and if any books have been written on the subject, please let us know the title and author of the book(s).

Thanks in advance, SanctionII.

cladking · November 5, 2006 7:09AM

There was still widespread demand for luxury goods during the depression. The defdinition of
luxury goods did slide up the scale though. There were only a few less very wealthy folks but
the numbers of well-to-do was hit much harder. Their goods often came on the market and didn't
necessarily find willing buyers. Cash was king and those who had it often bought very expensive
items and real estate for investment. The very top end coins wouldn't have traded as often but
shouldn't have suffered as greatly in price. The more available coins ($10-$100) would have been
significantly depressed.

The public started collecting on a massive scale for the first time ever. This wasn't a sign of wealth
so much as a sign that they had a lot of time and people needed a hobby. Stamps and coins were
quite popular. Collecting had been a little more common in the '20's than previously and there had
been smallquantities of many circulating issues set aside. The depression shook most of these loose
since their owners needed the cash for day to day expenses. This is one of the reasons that coins
like the '26-S buffalo is so tough in high grade. Many of the few rolls saved were spent in '29/ '30 and
then were heavily worn by the time that people could afford to set aside something so "unimportant".
Coin velocity increased dramatically as few people would leave any lying around the house but at the
same time many coins flowed into the FED because of greatly reduced demand for coins. These were
paid back out over the years as mintages slumped or were omitted entirely.

Even silver was being set aside in these years but coins had to be something pretty special for any-
one to set aside so much cash. By 1935 things had improved greatly at least for those in urban areas
with jobs and the farm economy was starting to show signs of bottoming out.

In those days it was possible to live off the land and people helped the down and out to the degree
possible. Those with no jobs often wandered the small towns and back roads living on what they
could find and meals from those who were little better off but had a roof over their heads and food
on the table. Large numbers of people were able to keep their houses and way of life only because
creditors and grocers trusted them to pay when they got a job later.

With joblessness as bad as it was, it's a wonder it wasn't far more devastating to far more people.

Leiana · November 5, 2006 7:14AM

Well, it can be said that the Depression created a whole new area of numismatics-- Hobo Nickels. There is a great article about it in the November Numismatist.

-Amanda

SanctionII · November 6, 2006 1:55AM

Thanks Cladking and Leiana for your informative replies.

Anyone else care to contribute?

Conder101 · November 6, 2006 2:49AM

Read Coin World, QDB weekly column. He has been doing a series on the coin market during the early 20th century he did the 1920's last month and he just got into the 1930's last week. Should be covering the Depression for the next week or two.

1794half1839 · March 17, 2008 11:07PM

Many "collector" coins entered circulation (proofs, high grade circ material). You also had a huge increase of Commems in 1936. Stack's started their auctions in 1935. There was alot going on numismatically in those days. Those who needed money spent collector coins; the well off who did not lose everything in the market crash could continue to, and did buy coins and built collections (Eliasberg comes to mind here).

Question for Forumite scholars: What effect did the great depression have on the public's treatment

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