Splendid Isolation (Part One)

CCLXXIV

In many respects the “King Zog Ruins” in Muttontown, New York stand in for the dreams and failings of the Interwar Era. Albania, freed from Ottoman domination, was established as a democracy in 1921. President Zog, a democratically-elected Albanian nationalist eventually declared himself King and sole ruler of his minor Balkan republic, which was swallowed up in 1939 by Benito Mussolini without a murmur of protest from the U.K. or France, the very nations that had created Albania in the aftermath of the Great War. Zog fled to London, and then bought “Knollwood”, this sprawling mansion on Long Island’s Gold Coast, hoping to establish an Albanian Government-in-Exile on this 550-acre Estate. He never did. He never even visited. The place, abandoned, fell into ruin. It was demolished in 1959, leaving just a few haunting structures in place like this Grand Staircase to nowhere

The reality was that Pan American Airways thrived during the Great Depression. Founded in 1927*, the airline spent its earliest years hauling mail and bringing passengers back and forth from Key West to Havana in search of rum drinks otherwise illegalized by Prohibition. Catering to wealthy “travel enthusiasts” and to corporate travelers, Pan Am’s expansion was stunning --- it can only be imagined what might have happened if there hadn’t been a Depression.  At a time when many Americans couldn’t afford to ride a streetcar, Pan Am’s patrons were laying out more than $1,800 for a one-way ticket to Hong Kong, a sum prodigious enough to support a family for a year in some areas of the stricken United States. In its first six years, Pan Am went from a single-route airline to the only international carrier of the United States, and the next six years after that saw Juan Trippe’s singular airline conquering oceans.

A Pan American luggage label, 1935

And then, just as Pan Am was about to (literally) reach the stratosphere, the international picture shifted radically. Suddenly, people who were unafraid to spend thousands of dollars leapfrogging oceans began to wonder if the air voyages were worth it. The exotic Orient was falling ever more darkly by the day under Japanese control, and if Japanese culture fascinated many Americans Japanese militarism did not. Even a flight to that Far Eastern bastion of Americana, Manila, tended to come along with ever darker prognostications by the people who lived or journeyed there regularly.  When the Hawaii Clipper mysteriously vanished in 1937, the Orient Express was reduced to flying officials and corporate agents of weapons manufacturers doing business in China.

Japanese troops in 1937, celebrating their invasion of China

The long-awaited Atlantic route struggled from its inception. It had been a herculean task that had taken years simply to get the route in place, and as soon as flights began Europe became a continent of dictators both petty and gross, shifting borders, and uncertain philosophies. Companies doing business in Europe had to check every day to see what nation owned the Ruhr, who the Minister of Trade was in Spain, and whether Poland still held the coalfields in Silesia --- or whether there was a Poland at all.

Business went on. In 1940, Standard Oil built a petroleum cracking plant near the German labor camp in Oswiecim, war or no war. It was manned mostly by slaves.**

Then there was the Great Depression. And the Dust Bowl.

The state of all the world in 1932, it is possible, had not been so unremittingly bleak since the time of the Black Death. It may have been true, as the British Ambassador in Berlin said, that “This Depression is the stupidest and most gratuitous in history,” but it didn’t change the fact that people were suffering.

The Panic of 1857

Why?  Oddly enough, it is difficult to say why. For, in effect, nothing had happened. Earlier economic crashes had simple explanations:  In the U.S. the Panic of 1819 occurred when The (Second) Bank of The United States*** had tightened credit suddenly and without warning. The Panic of 1837 had occurred when worldwide cotton prices had plummeted in response to an overabundance of the fiber on the world market. The (worldwide) Panic of 1857 occurred in response to rising tensions in the United States, tensions that would lead in just a few years to the Civil War. The (first) Great Depression of 1873 (again worldwide) resulted from a collapse in the price of silver (in Great Britain the economy did not regain its pre-Depression robustness until 1879).  The Panic of 1893 occurred in response to the failure of the wheat crop in Argentina and commodity brokers’ fears that the world market would bottom out (which it did, based on their fears). There had been a brief economic crisis just after the end of the Great War as the economy realigned itself with peacetime needs.

In none of these cases was the economic picture as simple as one-cause-and-one-effect, but there had always been a precipitating factor to these Panics, some crisis that triggered them. The Great Depression still seems to have had no crisis point. **** It was as though a Bipolar Disorder patient had suddenly and inexplicably shifted from hypermania to profound desolation in a day, taking the rest of the world with them. 

The seeming suddenness of it all, the factor of unpredictability, the sense of staring into the abyss, no doubt intensified the effect, making the Great Depression worse than it should have been, and the sense of sinking redoubled the overall sense of gloom. 

The United States was not hit hardest by the Great Depression (that dubious distinction belonged to Canada, which lost 34.8% of its GDP between 1929 and 1931), but the shocking difference between the glitziness of the 1920s and the griminess of the 1930s was most evident in once high-flying America (the U.S. lost 29.0% of GDP between 1929 and 1933, a slower and lesser slide downward).

*See LXXXII “The Airline War” (March 9, 2016)

**The town of Oswiecim in Polish Silesia was a major regional railhead. It is better known by its German name, Auschwitz. The German labor / concentration / death camp there murdered some 2 million people with the efficiency of a manufactury between 1939 and 1945

***The (First) Bank of the United States was the nation’s second Central Bank, founded in 1791 by Alexander Hamilton to provide the United States with a centralized monetary system. It faced opposition from opponents of Federalism and States’ Rights advocates and when its charter expired in 1811, it was not renewed. The (First) Bank of the United States had been preceded by The Bank of North America (1781 to 1791) and was succeeded by The (Second) Bank of the United States (1816 to 1836). There were no further Central Banks chartered, and the Federal Reserve handles most of the duties of a Central Bank today. But the imposing name carries much gravitas. It was appropriated (once too often) by a local bank in New York City in the 1920s. When the local bank failed and the failure was reported in the news, depositors around the country, misunderstanding that this was not a Central Bank, panicked and started a run on banks that triggered panic selling on Wall Street. Thus began the Great Depression

****The debate on why the Great Depression began and why it became so severe and what psychological factors were at play in 1929 to cause such a fiscal stampede may go on forever. No one factor seems to be the reason, and a single one yet seems to be there, cleverly concealed amongst the weeds at the water’s edge, an answer to that Depression and to all future economic crises. Some of the best writing on crisis comes from the novelist Michael Crichton, who (attributing it all to fictive theorists) wrote in The Andromeda Strain:

According to Lewis Bornheim, a crisis is a situation in which a previously tolerable set of circumstances is suddenly, by the addition of another factor, rendered wholly intolerable. Whether the additional factor is political, economic, or scientific hardly matters: the death of a national hero, the instability of prices, or a technological discovery can all set events in motion.

The noted scholar Alfred Pockrun, in his study of crises (Culture, Crisis and Change), has made several interesting points. First, he observes that every crisis has its beginnings long before the actual onset . . . Pockran also observes that a crisis is compounded of individuals and personalities, which are unique:

 “It is as difficult to imagine Alexander at the Rubicon, and Eisenhower at Waterloo, as it is difficult to imagine Darwin writing to Roosevelt about the potential for an atomic bomb. A crisis is made by men, who enter into the crisis with their own prejudices,propensities, and predispositions. A crisis is the sum of intuition and blind spots, a blend of facts noted and facts ignored.

Yet underlying the uniqueness of each crisis is a disturbing sameness. A characteristic of all crises is their predictability, in retrospect. They seem to have a certain inevitability, they seem predestined. This is not true of all crises, but it is true of sufficiently many to make the most hardened historian cynical and misanthropic.”