The Day the Money Stopped - 8 March 2002

The 4th of March is a frightening date in American history and every time it comes around I'm drawn as by a magnet back to 4 March 1933.

Anyone who was alive and sentient in this country then, most especially in Washington or New York, will never forget it.

Saturday 4 March, 69 years ago, was an almost balmy winter's day after several roaring blizzards.

I was in New Haven, Connecticut, because that is the seat of Yale University and I was in my second term there, taking no lectures because I was 24, on a fellowship in the graduate school, doing my own thing.

I was about to take the train - a 90-minute stint to New York city, there to meet on an incoming Cunarder a young and jolly woman who was the daughter of an old family friend.

She was on her first visit to America and I'd promised to spend the weekend showing her, as we used to say, a good time.

If this tale is already eliciting a giggle in the expectation of some hanky panky I'd better disabuse you at once. I was very much in love with an English girl who was, alas, not coming in on any Cunarder.

Never was a more high-minded weekend spent by a young couple in their early twenties.

In those days I was blankly non-political, never read a newspaper except for the theatre page, and in America more than in England, I was a 100% ignoramus about government and politics.

I was aware of the grimness of the depression from the evidence of my senses, every day seeing the long bread lines of very mixed company - shabby men and elegant men and poor women, people of all classes and ages.

And every evening, out with a friend, being solicited half a dozen times by smart middle-aged and greying men who told their wives they were looking for night work. So they were, they were begging for dimes and quarters on the street.

Well on that Saturday I had enough ready cash to see us through the day, I'd checked my theatre tickets and I was on my way.

As the Cunarder blew its baritone horn it little knew it was sounding the trump of doom.

But the young lady was in good spirits and in no time I was checking in to my usual hotel.

But I walked over first to the cashier and wrote out a cheque for some - ooh in those days very lavish amount, it could have been $20.

The cashier looked at it as an obvious forgery - what is this? He couldn't possibly cash it.

I responded with a sort of line from Noel Coward that was fashionable at the time: "Do you imagine there's a bank anywhere in the United States that might possibly have the kindness to cash this cheque?"

He looked at me with all the zeal of a cod fish.

"I don't think so," he drawled "better go and read the papers, sonny."

He was, you'll gather, a very old man, he couldn't have been a day under 50.

Well I did, I walked over the news-stand and I saw across the whole front page of the New York Times the blanketing headline: "Roosevelt to be inaugurated at noon, declares moratorium on all banks."

All banks? That made no more sense to me than an announcement that the sky would turn to midnight black for the rest of the day.

Still I was young and sassy and not to be intimidated by a cashier and a word I hadn't a clue to - moratorium.

I stopped a passing elevator lift man and enquired. It meant the banks were shut, all the banks, said the lift man, of the United States.

"In other words," he said, "this is the day the money stopped."

It was a piercing phrase and passed into the language. A later friend of mine wrote a book with that title.

But what did it mean by way of living and how about a receptive hotel, mine would have no truck with us, not with a young con man who heard the news and thought to cheat the crisis by cashing a worthless cheque for a king's ransom.

These doubts and questions only came later. At the moment the young lady and I were looking forward to a lark.

How to spend a holiday weekend in New York without money, without access to money, even to a bed? I had a triumphant idea.

I sat the girl down in the lobby of the hotel. I told her to eat, read, walk, do anything she chose for two, possibly three, hours and I'd be back loaded with lots of lovely money.

My ace up the sleeve was a New York to New Haven railway season ticket or what is called here a commutation ticket.

It had been provided to me - an advanced student of drama - to help me go to New York whenever I wanted to catch up with the latest plays. The Commonwealth Fund was nothing if not a thoughtful provider.

So I caught the train and back at Yale went the rounds of my friends to borrow what would be my reserve of walking-around money. To my horror most of them were out and three of them could cough up only a dollar or two.

The last man I called on was my oldest - sixth-month old - American friend, a merry-eyed, athletic type who'd knocked on my door my first night at Yale wondering if I needed help of any kind.

He gave me a happy but quizzical look and said a sentence that changed my life.

"Do you know," he said, "what a due bill is?"

A due bill - I hadn't a clue. But I learned within 30 seconds.

Yale's student publication, a very serious, double-domed quarterly was called The Harkness Hoot and its editor was the very man standing before me. He said that the hotel St Regis in New York, a positively upper crust hotel on 5th Avenue, had an outstanding bill with the Hoot for an advertisement at an unpaid cost of $100 - about $1,000 today.

"I think," he said, "they'll put you up."

No wonder this merry-eyed, quick-thinking lad became dean of the Yale Law School at the age of 26 and subsequently the president's advisor on atomic energy.

I took the bill and took the train, whipped in and out of my old hotel with a sneer and whisked my girl off to the St Regis.

We ran into a small tide of outgoing guests. I guessed correctly that we were the only new guests.

The reservations clerk was suspicious of this young, carefree and probably illegal couple.

He summoned the manager, whom I can see now - a dapper, grey-haired man in a cutaway.

"Can I help you," he asked with the bored tone of a cop turning his flashlight on a burglar.

"Yes," I said, "two separate nice rooms on the top floor."

He coughed a high sarcastic cough. I showed him the due bill.

He was transformed in a flash. He started clapping his hands like a flamenco dancer and minions came running.

We were swiftly ensconced in a suite with two bedrooms at the astronomical price of, say, $7-8. We laughed, we lolled, we prepared to see the town.

We danced some of the night and spent the rest at various Harlem nightclubs dispensing carefree tips until the ready cash had gone.

When I took out my cheque book and faced the taxi driver he was shocked, insulted, but not for long. He took it and he was the last cab driver, shopkeeper, waiter, café, bartender, to demur.

Next morning the governor of Connecticut issued scrip money and we exchanged that on the promise of repayment in better times.

This experience germinated a lively interest first in the banking system - what Roosevelt left of it - then in economics and then in the origins of the Depression.

I learned about Black Thursday - 24 October 1929, the day when blocks of shares went down the river and the New York Stock Exchange in 20,000 lots.

JP Morgan and his banker rescue team plugged the flood with $25m and for a month or two things steadied.

All the bigwigs said it had been nasty, but the recession was over.

But to Congress this was a Band-Aid solution. Two Western senators, one Mr Smoot and one Mr Hawley, proposed a major curative operation, a radical new tariff bill on imports.

A hundred top economists petitioned President Hoover not to abandon his free trade prejudice, but he signed the bill.

The market started down, unemployment rose alarmingly, the angry Europeans were less able than ever to pay their huge first war debt. They retorted in kind.

It was depressingly plain in the spring of 1932 that the Smoot/Hawley tariff had guaranteed the descent into the pit of 13 million unemployed and what would come to be known as the Great Depression.

This past Monday President Bush, over the warning words of the American and European conservative financial papers, and a plea - this time from several hundred American economists - signed a tariff bill of 20% on imported steel.

There was an instant outcry from Japan and Europe, harshest of all from Russia, which sells one third of its slab steel to the United States and threatened a ban on American poultry.

Retaliation has always been the name of the game and the harbinger of recession at best.

An old, wily economist who was there in 1933 said: "After this, the deluge - remember?"

Let us hope, pray, that for once he's wrong.

THIS TRANSCRIPT WAS TYPED FROM A RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT. BECAUSE OF THE RISK OF MISHEARING, THE BBC CANNOT VOUCH FOR ITS COMPLETE ACCURACY.

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