148 ChaPter 3
unemployed were more than numbers—they were men who could not feed
their families, mothers who saw children go hungry, elderly who had no
means to survive, farmers whose land was seized by their creditors or whose
business failed because prices dropped so low, children who had no dreams of
a better life, ill Americans who died because health care was unavailable.
Tragically, even the national suicide rate rose significantly, from 12 per 100,000
persons in the period from 1920-1928 to over 18 in 1929, and remained above
15 throughout the 1930s [by comparison, today it is about 12 per 100,000].
The U.S. economy, in just about half a decade, fell from immense prosper-
ity to an enormous depression, so the obvious question is simply “what hap-
pened?” But there is no simple, or single, answer; economists, historians,
journalists, politicians, and others have offered many reasons for the crisis of
1929 onward. There were various causes for the economic crash—by them-
selves important but probably not enough to cause the situation to become
so dire, but when connected together, creating an environment in which the
depression was likely and would become worse. Singularly, no reason was
dominant; collectively, they were catastrophic.
Surplus Capital. Surplus capital, one of the main causes of the crises of the
1890s, also was a main factor in creating the Depression of the late 1920s.
With new technologies and consumer goods like autos and radios creating
huge profits, both industrial and agricultural output increased while net
investment actually went down. Wages were slightly higher, but the gap
between the affluent and poor in fact increased. The result of these conditions
was easy to predict, more money. Corporations had more capital on their
hands than ever before. They invested significant amounts abroad—from $3.5
billion in 1914, to double that in 1919, soaring to $17.2 billion in 1930, and
then, starting to fall, at $14.9 billion in 1933. Foreign investments in the U.S.
went up too, but by much less—$7.2 billion in 1914, before the Great War,
and then down to $3.3 billion in 1919, back to $8.4 billion in 1930, and
declining again to $5.4 billion in 1933. Overall, America’s creditor position
[the money others owed to the U.S.] was $3.7 billion in 1919, but around $10
billion by the beginning of the 1930s. Corporate incomes jumped too, from
$4.3 billion in 1921, to $7.5 billion in 1924, about $9 billion in 1927, approx-
imately $11 billion in 1928 and 1929, but then dropped dramatically to $6.4
billion in 1930, $3.6 billion in 1931, and barely $2 billion in 1932. What do
all these numbers mean? Many things—they are indicative of a number of