Notes on Picayune and the Great Depression
Published 1:14 am Wednesday, March 4, 2009
As I write in February 2009 the United States and most of the world are gripped by the worst financial crisis since the Great Depression of 1929-1939. The nation’s leading financial institutions have either failed or been bailed out by the Federal Government — $700 billion with the first installment in December — and by taxpayer and descendant’s money, with little success so far. Millions of householders are facing foreclosure, individual savings and retirement accounts have nosedived. Meanwhile, Wall Street financiers, those whom President Theodore Roosevelt a century ago labeled “malefactors of great wealth,” have awarded themselves at least $18.4 billion in bonuses, the big three automakers face extinction and world trade is shaky. Be afraid and welcome back Herbert Hoover.
It was on his watch as President that the Great Depression began. Few living today can remember it (I was a child). Therefore, we need to have it recalled, partly as a comparison to today’s economic woes. It was far, far worse. Then equity values were down by about 30-plus percent; today it is barely down. Then unemployment soared to 25 percent; today it is about 7.2 percent, which is bad enough.
Mississippi, then as now the nation’s poorest state, was at the nadir of misery. Predominantly agricultural, its farmers, as those in the rest of the country, had been in an agrarian recession since 1921 while the rest of the U.S. was whooping it up in the Roaring Twenties. The nation’s farmers had enjoyed a boom in World War I but overproduction and the constriction in world markets put them in a severe bind. Also, in 1918 the boll weevil began to destroy the South’s cotton, the basis of Mississippi’s economy. Cotton tumbled to a nickel a pound and by 1932 was still less than seven cents.
In 1932 Mississippi’s per capita annual income was just $126. The average annual teacher’s salary was but $414, most of it discounted by payment in script (promissory money). That year three-fourths of Mississippi’s land — houses, farms, plantations and timberland — went under the sheriff’s hammer, foreclosed for nonpayment of taxes. There were only 900 paved roads in Mississippi out of a total of 6,000. The State Government was broke. Remember, there was nothing of the social safety net we enjoy today — no Social Security, Medicare, Medicaid, aid to dependent children, food stamps, etc. — nothing. Those would only come later as Americans were made aware reluctantly that indeed we are our brothers’ (and sisters’) keepers.
Here in our region of the Piney Woods and Gulf Coastal Plain, trying to grow cotton was a fool’s errand, given the thin, poor and acidic soils. However, during and after World War I we enjoyed the lumber boom while it lasted. But by 1928 that party was over with the virgin yellow pine forests gone and the land denuded. Most lumbermen then did not believe in reforestation, so they cut and ran, except for a few honorable exceptions. Sixteen million acres were wasteland.
In 1932 timber production reached its lowest ebb since 1880, when large-scale exploitation got underway with the advent of railroads. For those who tried to farm in Pearl River County by 1933, half its farms, 1,239, were mortgaged, compared with 65 out of 789, only eight percent, in 1910. Banks in the state crashed. In 1930, 59 Mississippi banks failed, 56 more in 1931, tailing off to 12 in 1932. Bank assets dropped to 1917 levels — before the World War I boom. (2) When banks failed, both stockholders and depositors lost everything—no F.D.I.C. then.
In 1932-33 various American states decreed bank holidays (temporary closings). On March 6, 1933, two days after President Franklin D. Roosevelt’s inauguration, he ordered a National Bank Holiday of a week. After that breathing spell only four Mississippi banks failed.
On June 1, 1904 my grandfather Eastman Francis Tate opened the Bank of Picayune (BOP), chartered the previous February, as president and capitalized at $50,000 with 25 charter shareholders. (3) He was already a director of the Bank of Poplarville. The Bank prospered modestly for a quarter of a century until 1929, despite the founding of a rival Pearl River County Bank in 1919. Capitalized at 10,000, one of its organizers was newly arrived lumberman L.O. Crosby, Sr., who also became a Bank of Picayune director in 1920.
As late as 1929, E.F. Tate could still spend $36,000 to modernize his bank’s building, operating temporarily out of the C. and R. Store (Crosby and Rowlands). The bank increased its capitalization to $52,500. (4) Despite the October 1929 Wall Street crash, on May 31, 1930 his son, bank vice-president William Eastman Tate, could write his brother-in-law in California that:
“Have had 13 bank failures in South Mississippi since first of the year. While other banks are sweating, we are sitting pretty. Reason of failures too much loaned out in real estate and farm property which is more or less frozen and cannot be collected. Banking is made harder by burdensome taxation, heavy expenses, repudiating of debts by people, fraud, robberies, and everything bad.” (5)
However, as the Depression worsened the Pearl River County Bank failed in early 1931. Its leaders, including Crosby, implored “Uncle Eastman” to assume the Pearl River County Bank’s liabilities and assets (mainly its building) to keep Picayune from going under. He agreed. The Bank of Picayune statement for March 17, 1931 lists among assets that building, its furniture and fixtures at $20,000. Bank of Picayune reserves and liabilities were $1,019,158.54. (6) That year my mother bought eight shares of BOP stock from Ed Rowlands at $100. (7)
Tate managed to keep the BOP afloat despite the failed bank’s worthless paper. In 1931 he organized the Tate Insurance Agency (he had been the Lamar Life Insurance Agency’s South Mississippi agent since its 1906 founding), partly to transfer bad paper from the BOP books. The Tate Insurance Agency still owned some of that real estate when it ceased operations in 1993 (I was an officer, as had been earlier my mother and my father, he the president). (8) On Aug. 1, 1933 E.F. Tate wrote his daughter Lena Mae that “…Business conditions are improving already; the payrolls I believe will double up here now in a short while and it appears to have put more pep and pleasant countenances into everybody. We are hoping that bonuses will be by the first of the year very much improved and very near normal. We have stood the depression fairly well, however we have lots of problems to solve yet…”
Eight months after the Bank Holiday, worn down by the struggle to keep the BOP alive and grieving over his wife’s death, E.F. Tate died Nov. 24, 1933 at Greystone at age 65. The burden fell upon his elder son and bank vice president, my uncle Willie, at age 41. He had gone into the bank at age 16 in 1908, became cashier in 1919, in 1929 vice president and president Dec. 28, 1933. (9)
The next day he issued an upbeat report: “The earnings were fair considering the bad year we have gone through and the outlook for the coming year is good. Our deposits have increased around $90,000 since November 1.” (10) That same week for a few hours the BOP had a branch at the McNeill Experiment Station to pay $1,400 to 121 workers of the Civil Works Administration there. The CWA was one of the New Deal agencies organized to put men back to work. (11)
W.E. Tate steered the BOP through the rest of the Depression Thirties until he died Dec. 7, 1940 of acute nephrosis. His wife, Nina, a devout Christian Scientist, had refused proper medical treatment until too late. The Picayune Item’s editor, J.R. Furr, wrote that it was “a little more akin to the loss of a member of our family”. (12)
Horatio Stewart succeeded Willie Tate as BOP president and served for many years until his death. Louis D. Megehee, former Superintendent of Picayune City Schools, followed as president for years. The bank continued to prosper modestly with assets and liabilities of more than $15 million.
Unfortunately, Megehee’s successor as president, Charles Stewart, and the bank’s auditor, Milford Kelley, stole about $1.6 million and the Federal Deposit Insurance Corporation swooped down in 1976, closed BOP and reopened it the next day as a branch of Bay St. Louis-based Hancock Bank. Both men were convicted and served short prison terms, but Picayune’s oldest continuous business was gone. J.E. Burke and others did manage to salvage enough for the shareholders to receive the amounts of their investments over a three or four year period. (13)
Earlier, in 1947, Picayune businessmen lead by G.H. “Peck” Williams and S.G. Thigpen, Sr., had founded the rival First National Bank of Picayune, located at the end of the same block as the Bank of Picayune and it continues today. This account of Picayune’s banking troubles during the Great Depression needs to be supplemented by one about the Depression’s effect on our people, their families, lives and jobs — how they made it through.
Disclosure: Besides my grandfather, E.F. Tate’s and Uncle Willie Tate’s services as Bank of Picayune presidents, my Uncle J. Ira Woodward was a long-time director, as was my father, Dr. J.H. Napier, Jr. until his death in 1949, when I succeeded him for a time. Still later, my mother Lena Mae Tate Napier became the only woman director and served until the bank’s closure. At 84, I am the last survivor of E.F. Tate’s eight grandchildren.
1. R.A. MCLEMORE, ed., “A History of Mississippi” (Hattiesburg, 1973), II, 98-99.
2. Ibid., II, 224, 2335, 322-323.
3. The Picayune Item (vol.i, no. 1), June 1, 1904. Copy in my possession.
4. Ibid., June 4, 1929.
5. Letter, W.E. Tate to John H. Napier, Jr., May 31, 1930, in my possession.
6. My mother’s E.F. Tate scrapbook, in my possession. The Pearl River County Bank stood on the south side of the first block of West Canal Street.
8. Personal knowledge.
9. Letter E.F. Tate to Lena Mae Napier, Aug. 1, 1933; telegrams, W.E. Tate to Lena Mae Napier, Aug. 30 and Nov. 24, 1933; obituaries in New Orleans Times-Picayune, Nov. 28, 1933 and The Picayune Item, Nov. 29, 1933, all in E.F. Tate scrapbook.
10. The Picayune Item, Dec. 29, 1933.
12. Ibid., Dec. 12, 1940.
13. Personal knowledge.