Deja Vu

March 2, 2009

Hook, Line, and Sinker

Tags:

economics,

Great Depression,

South Carolina,

Wall Street

“Dow Below 7,000 for the First Time Since 1997,” The New York Times, Mar. 2, 2009.

Investor concerns about financial companies and worries about Friday’s unemployment report continued to erode the markets on Monday as the Dow Jones industrial average fell below 7,000 for first time since October 1997….

Shortly before noon, the Dow was down 243 points, or 3.4 percent, while the Standard & Poor’s 500-stock index declined 3.7 percent, but remained above the 700 mark. The Nasdaq fell 2.9 percent.

“Another day, another 200 points,” David Dietze, chief investment strategist at Point View Financial Services, said, comparing the daily markets to water torture.

“George Mehales,” by R. V. Williams, South Carolina Federal Writers Project, December 1938.
Williams interviewed Mehales at The Dixie Lunch, on East Main Street in Spartanburg, S.C.

“Tell you, Bob, it was like this. I found an owner of a small restaurant here—not mentioning any names—that needed some capital. With what I had and what I borrowed from my brother, I went into business with him. Our business jumped up fast, and we had to hire extra people to take care of the trade. We were open day and night. Then his wife became sick—or should I say ill? She had the same disease that killed my brothers. He decided to take her to Arizona for her health, and he wanted to sell out to me. I bought it and was broke in less than six months. I couldn’t get it out of my head that I wanted the best restaurant fixtures that money could buy. I was making good money but it wasn’t enough to meet the expense of my new fixtures. And I was also playing the stock market. One day, one of my customers showed me how much money he was making in the market. I had never even thought about the stock market before. For a few days, I looked at the market page in the newspaper. It looked good to me, and I bit with what you folks call ‘hook, line and sinker.’ All the money I took in, I put into stocks. The first day of October in 1929 made me feel like I was rich. The stocks I bought had gone up and up. I sold some of them and bought others. I often thought about what my mother had said and that was, ‘You’ll get rich in America someday!’ I should have paid for my fixtures, but I figured I could pay them any time. You might think I would have known better, but I didn't. I figured I could pay my debts any time, and I just let them ride.

“Trouble hit me hard during the last day of October of that year. I had become so interested with the market that I let my own business go down. I wasn’t there half the time. I need my own place of business as a place to hang around in. Business dropped off, but I didn’t care ’cause I was making plenty money in the market.

“During the last days of October, my stocks began to drop. I was gambling on the margin. My brother called me and told me I would have to put up more cash. I went to the bank and put up all the cash I had in the bank with my brother. It seemed to me that things would soon get better. I sent a telegram to my brother and he sent me one thousand dollars. I had about five thousand dollars invested. On that day of October 29, they told me I needed more cash to cover up. I couldn’t get it. I was wiped out that day.

“I guess disappointment comes mighty hard to some people, but that almost killed me. My brother lost in the market like me, and he couldn’t help me out. I considered killing myself, ’cause I had nothing left. I found out what a fool I had been. I did manage to pay my debts by selling my cafe at rock bottom prices. I learned a lesson then. It almost killed me to see my cafe go at such a cheap price. It taught me that you've got to pay your debts to get along….”

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