Great Depression

The 1930s were a volatile decade in Milwaukee. The Great Depression that gripped United States had a dramatic impact on the city, throwing thousands of Milwaukeeans into poverty, creating tensions that sometimes turned violent, and producing an intense crime wave that shocked the city. The first signs of the Great Depression began with the crash of the stock market in fall of 1929 when investments lost $26 billion in value in a matter of days.[1] As stocks plummeted, the country’s banking system collapsed. In the 1920s only 500 banks went out of business in a typical year, but in 1929, 659 banks collapsed and by the end of 1930 over 1,350 banks failed, causing millions of dollars in losses.[2] Additionally in 1930, 26,350 other business failed and the gross national product dropped by 12.6 percent.[3] All of these events shocked consumer confidence and destroyed demand. Without customers buying goods, factories and other businesses laid off employees. By 1933 about 25 percent of American workers were unemployed; many others saw their hours and wages cut.[4] Lay-offs began in Milwaukee during the first months of 1930, when Holeproof Hosiery let 11 percent of its factory workers go, and Meckelberg Sash and Shoe Company reduced its workforce by 25 percent.[5] By the end of 1933, over 51,600 Milwaukeeans had lost their jobs.[6]

As men and women lost jobs, average annual incomes plummeted. Between 1929 and 1933, the national average family annual income dropped from $2,300 to just $1,500.[7] A study of Wisconsin families revealed per capita income dropped by half over that same period.[8] In their efforts to make ends meet, poor Milwaukeeans tapped into savings, cashed in insurance policies, pawned their goods, and borrowed money from friends and relatives.[9] However, for many this was not enough, and some people lost their homes. Between 1929 and 1933 Milwaukee’s foreclosure and eviction rates more than doubled.[10] Some of these families found cheaper housing in other parts of the city, others moved in with relatives, and some became homeless. Poor parents also struggled to properly feed their children and malnutrition rates skyrocketed. By 1932 over 2,800 of the city’s children were malnourished; three years later that number more than doubled.[11]

Many families in dire straits turned to welfare or “relief,” as public assistance was typically called in the era. At the beginning of the 1930s, relief was handled by local governments and private charities. The Milwaukee County Department of Outdoor Relief (DOR) reported only 2,000 cases of families and individuals on public assistance in 1929, but by 1933 there were over 34,000 families and individuals on relief. This represented 21 percent of the entire population of Milwaukee County. The DOR averaged 24,000 cases over the remainder of the Great Depression.[12] Private charities also reported a dramatic increase in caseloads. Between 1929 and 1933 Jewish Family and Children’s Services reported a 48 percent increase in their case load.[13] The St. Vincent DePaul Society went from aiding only 663 families in 1929 to providing relief to over 8,800 in 1933, and the Community Fund, the city’s largest private charity, reported an increase of over 30,000 cases in that same period.[14]

As the numbers of the poor skyrocketed, many complained that the amount of aid was insufficient. Some of these complaints turned into protest, and tension and conflict became part of the fabric of the city. On February 5, 1930 over 400 people crowded into a meeting of the Unemployed Council of Milwaukee, an organization with communist leanings. A Council leader ridiculed business leaders for making optimistic forecasts and ignoring the poor’s suffering. He then demanded “free coal, food, and clothing, and free medical services [and] free lodging for the unemployed workers.”[15] The Unemployed Council also demanded control of county relief services. Once the speech was over, the crowd marched to Milwaukee City Hall and presented their demands to Socialist Mayor Daniel Hoan.[16] This set off a wave of protests by the Unemployed Council throughout the city. In the early 1930s the Unemployed Council held five more marches demanding improved poor relief. They argued their case to government officials and gave fiery speeches outside relief stations. In the summer of 1932, these protests turned into violent confrontations. On June 10, as people picked up their relief supplies outside a West Allis DOR station, they heard Unemployment Council representatives indict the government and its relief effort. Leaders then called on the crowd to take over the relief station. Representatives of the American Legion, who had been monitoring the Unemployed Council’s activity, quickly objected, and an argument erupted between Legionaries and the Unemployment Council leaders. The heated exchange turned into a fistfight that escalated into a small riot. Later that summer a melee erupted at a North Side relief station, and in the fall violent confrontations took place at two additional relief stations.[17]

State and local governments tried to quell the protests and to address the increased demand for relief. In 1931 Governor Philip La Follette initialed a wide-ranging poor relief program that included a $17 million emergency relief package that provided money to local governments to help pay for welfare.[18] Milwaukee County increased its welfare budget from $191,000 in 1929 to $8.1 million in 1933 and spent over $300,000 on work relief, a program that hired the unemployed to do jobs such as developing parks.[19] The City of Milwaukee opened recreation centers for the jobless, created a program to aid the unemployed in finding jobs, and between 1931 and 1932 spent $1.1 million on work relief.[20] As government expenditures dramatically increased, some believed the new spending was prolonging the Depression. The Wisconsin Chamber of Commerce argued that high taxes and increased spending inhibited an economic recovery. “Balancing the government budget is absolutely necessary before a complete recovery of prosperity is possible,” a Chamber leader explained. [21] A member of the Wisconsin Taxpayers Alliance demanded government expenses be dramatically reduced or governments would face bankruptcy.[22]

Faced with angry taxpayers, ballooning relief costs, and declining revenues, state and local officials slashed budgets. By 1932 the state legislature reduced its budget by $3 million, significantly reducing aid to local governments.[23] In the same year the County Board of Supervisors cut $500,000 from its budget, and the following year Supervisors cut another $600,000 in spending and slashed county workers’ pay.[24] The City of Milwaukee, which had acted most aggressively in poor relief, was also forced to slash spending. In the first years of the crisis, the city tapped into its $4 million reserve fund to aid the jobless, but by 1932 that money had dried up and the city was in a financial crisis. So Mayor Hoan and the Common Council reduced relief payments, laid off employees, and cut the remaining workers’ hours and pay in order to slash 25 percent from the budget.[25]

The economic crisis loomed large in the 1932 elections. Milwaukee’s Socialists told voters that the Depression was a symptom of a broken capitalistic system and called for an increase in poor relief. This argument convinced voters to cast their ballots for the Socialists. After never having more than 45 percent of the seats in the Common Council during the 1920s, in 1932 the Socialists and their allies won fourteen of the twenty-seven Council seats. The Party also captured the City Attorney and City Treasurer offices, and Mayor Hoan was reelected in a landslide.[26] While voters elected Socialists to city offices in the spring of 1932, in November voters also passed a referendum that capped the city’s tax rate at the 1926 level—which was far below what the city had spent in 1931.[27] So Hoan and the Common Council were forced to make even more budget cuts, including canceling the Fourth of July fireworks display and turning off the city hall tower clock.[28] But this was still not enough, and in spring of 1933 the situation was so desperate that the city began paying its employees in a combination of cash and scrip. Scrip was essentially a city bond, and Hoan and city officials urged businesses to accept scrip as the same as cash, pledging to repay the bond when the economic crisis was over. Within a few weeks over 250 businesses and landlords were accepting scrip, and by 1934 it was considered as good as cash by almost all businesses in the city.[29]

With city and state governments unable to provide adequately for the poor, the federal government stepped in to address the economic crisis. The 1932 election not only brought the Socialists to power in Milwaukee, but also Democratic Franklin Roosevelt to the Presidency and his party control of the Congress. Roosevelt pledged to address the Depression like an invading foe and initiated his New Deal program, a large scale federal program that aided the poor and tried to create an economic recovery. The New Deal provided Milwaukee and the rest of the nation two types of poor relief. The first was direct relief or payments directly to those in need. These programs eased the financial burden of local government who were struggling to take care of the jobless. One of the major New Deal direct relief programs was Aid to Dependent Children (ADC). ADC aided children under sixteen years old who were deprived of parental support due to death, disability, abandonment, or imprisonment. By 1938 there were over 2,200 Milwaukee County families receiving over $1.1 million in ADC assistance.[30]

The other major federal welfare program was work relief. The New Deal included a host of work relief programs that aided Milwaukee’s poor, including the Civil Works Administration, Works Progress Administration, and the Civilian Conservation Corps. These programs hired workers to do jobs ranging from developing the city’s parks and constructing buildings to performing in orchestras and creating art exhibits.[31] By 1938 over 24,000 Milwaukee County residents were employed by the Works Progress Administration.[32] Two of the most significant New Deal work relief projects in the city created housing. The Parklawn public housing project, completed in 1937, consisted of 518 units in the northwestern section of the city. By law the government could rent public housing only to poor and low-income families, with preference being given to those families living in slums and sub-standard housing.[33] The other federal housing project was a much bolder effort. Rather than simply constructing a low-income apartment complex, the federal government created an entire community. This model community, located eight miles southwest of Milwaukee, was given the name Greendale and opened in 1938. The federal government built and then retained ownership of the community buildings and the 572 houses while renting them out.[34] These work relief programs and other efforts to combat the Depression won Franklin Roosevelt the support of many Milwaukeeans. In 1936 many of the city’s voters transferred their allegiance and their votes from the Socialists to the Democratic Party, causing Roosevelt to win in a landslide, but hurting the Socialists. Hoan just narrowly won reelection in 1936, and the Socialists won only five seats in the Common Council.[35]

Part of the reason people transferred their allegiance to the Democrats was that Roosevelt’s party had won tremendous gains for workers. New Deal legislation recognized and protected workers’ right to join unions, collectively bargain with employers, and go on strike. In the past when workers attempted to unionize or went on strike, they risked retribution from their bosses. However New Deal legislation made this type of retaliation illegal and forced employers to work with the unions. When this legislation was initially passed in 1934, workers who had watched their hours and wages shrink in the first year of the Depression responded by going on strike and a wave of labor unrest hit the city. By the end of 1934 cobblers, movie theater ushers, and glove companies workers were among the over 27,000 Milwaukee workers who walked off the job in 107 strikes.[36] Most of these strikes were tense but peaceful; however, some turned violent. In March a fistfight broke out between a striker and a non-striking employee on the picket line outside the Seaman Company plant.[37] In May striking auto mechanics clashed with police, and three workers were arrested.[38] The most serious violence took place in June during the streetcar employee strike. Picketers tried to block the trolley barns, trapping the streetcars inside the garages and preventing the trolleys from running. However, as strikers tried to block the trolleys, company men turned firehoses on the demonstrators, who responded by throwing brick and stones, and a riot broke out. Police were called in and the officers had to use tear gas to break up the crowd of over 12,000. [39] Sixteen people were hurt in the melee and fifty-eight strikers were arrested. Over the next two nights more violence broke out, leaving many injured and one man dead. The streetcar strike was finally ended when a compromise agreement was reached on June 30.[40]

A second wave of strikes hit the city just three years later. This wave of labor unrest was part of a great national debate over the direction of unionism that emerged in middle 1930s. The American Federation of Labor (AFL), the nation’s leading union, had traditionally organized only skilled workers, leaving unskilled industrial laborers unrepresented. In the middle 1930s, the Committee of Industrial Organizations, a group within the AFL, began to organize industrial workers in factories and plants all over the country. However, a conflict emerged within the AFL over whether or not unskilled workers should continue to be unionized. This tension led to an eventual split between the two groups, and the Committee of Industrial Organizations broke away from the AFL, renaming itself the Congress of Industrial Organizations (CIO). Milwaukee was a major battlefield in this war over unionism. In the mid-1930s both the AFL and CIO waged aggressive membership drives in the city, causing union affiliation to skyrocket. In 1930 only about 20,000 workers were union members, but by 1939 over 100,000 Milwaukee laborers were organized. The Milwaukee AFL had about 30 percent more members than the CIO.[41] Part of this battle over membership was a new wave of strikes that hit the city in 1937. During that year there were fifty-four major strikes involving more than 10,000 workers. The AFL unions called thirty-four of those strikes, including a sixty-five day walk-out against the Checker Cab Company. The CIO led twenty strikes in 1937, with its largest being a walk-out against the Bucyrus-Erie Company that lasted for fifty days.[42]

The Great Depression not only created clashes between labor and management, it also magnified people’s fears of crime. While no systematic, comprehensive crime statistics were kept in the early twentieth century, it appeared to many that crime was on the rise all over the nation. The murder rate in the nation’s cities doubled between 1917 and 1932, kidnappings became epidemic, with almost 300 reported in 1931 alone. By 1932 an average of fourteen banks were being robbed each month.[43] In Milwaukee, citizens concern about crime quickly grew to alarm in 1935 when a series of bombings rock the city. On October 26 nineteen-year-old Isador “Idzi” Rutkowski and sixteen-year-old Paul “Shrimp” Chovonec detonated a homemade bomb at the Shorewood Village Hall. The bomb blew a hole in the building but did not kill anyone. However, the explosion did set off a tense week in the city as Idzi and Shrimp continued their bombing spree. On October 28 the young men detonated bombs at two branches of the First Wisconsin National Bank, and on Halloween night Idzi and Shrimp brazenly bombed two police precinct stations. On November 3 the two were working on a new bomb in Idzi’s South Side garage and something went wrong, causing the bomb and the other dynamite in the garage to detonate. The explosion killed the two bombers as well as a nine-year old neighbor, Patricia Malnarek.[44]

This bombing campaign was just the beginning of the youth crime spree in the city. A 1936 study of juvenile delinquency in mid-sized American cities revealed that Milwaukee had the highest rate of youth crime of all communities included in the study. In 1937 juvenile delinquency increased 34 percent over the previous year, and by 1938 the city’s newspapers were proclaiming a “juvenile crime wave” in Milwaukee that was “wholly unprecedented and…vast in scope.”[45] In response, city officials worked to keep children away from what they saw as corrupting influences. In 1937 the Common Council banned pinball within the city and passed legislation preventing anyone under twenty-one from entering a tavern.[46] The Milwaukee Catholic Church spearheaded a crusade that strongly discouraged the faithful, particularly the young, from attending movies that glorified crime.[47] City officials also worked to create positive environment for potentially delinquent youth, and between 1935 and 1939 New Deal money was used to open fifteen new playgrounds and social centers. Beginning in 1937 city leaders used federal dollars to fund 21 “toy libraries” that lent potentially delinquent children playthings in hopes of keeping them out of trouble.[48]

This juvenile crime wave was part of the fear, tensions, and violence that marked 1930s Milwaukee. While the economic crisis brought violent clashes between labor and management and rich and poor, the response to the Great Depression left an indelible mark on Milwaukee. New Deal programs developed the city’s parks, constructed new public housing and other buildings, and even expanded the metropolitan area by creating an entirely new suburb.