I had lunch yesterday with Gordy Minch, an old business associate from Ripon. Interestingly, he grew up in Plymouth with my Dad in the 1920's and 1930's.
Gordy's Dad ran the Mitchell Hotel. It was one half block from the City Club and had a bar and rented rooms just like the "Club". Gordy has lots of insights that I don't have because he is 16 years older (born 1923).
Gordy lived through the Great Depression. He was between 8-15 years of age when the Depression occurred. Unemployment was double what it is today. Believe it or not, there was a major "booze bootlegging" operation around Plymouth. Occasional bootleg buyers would drive up from Illinois and stay at the Mitchell Hotel. They had lots of cash. Gordy would do them favors like run to the drug store or pick up snacks. They rewarded him with cash. Gordy accumulated over $300 which was a lot for a kid. He put his money in the local bank. When the Great Depression hit, thousands of banks failed. Gordy had his money in a Plymouth bank when it failed and he lost it all. There was no FDIC insuring accounts up to $100.000. I can't help but wonder how much the $300 would be worth in todays inflated dollars? Probably somewhere between $5,000-$10,000. Major dollars for a kid.
Fast forward to 2009. We are in the midst of a major Recession. There is comparison back to the 1930's. One of the major differences is that banks are not failing today like they did during the Depression. I think there have been 21 bank failures so far this year. A major reason is banks carry FDIC insurance guaranteeing our savings and checking. So by today's rules Gordy would not have lost his $300. The Fed is also pumping $700 billion into major banks making sure there is enough money in the system. Eventually this will mean higher taxes and inflation for all of us. The argument is todays action by the government was better than the 1930's when they let banks fail. I guess time will tell!
The stories about the bootlegging during the recession were fascinating. Names are not mentioned to protect the guilty. Plymouth had a major operation going.
The lesson Grasshoppers is that the world is constantly changing. History does shape the future. The Great Depression is shaping the current recession. Cash is still good and there is no prohibition of booze.
Love,
Dad