Benjamin Roth's chilling chronicle of hard times.

Benjamin Roth was born in New York City in 1894 and moved shortly thereafter to Youngstown, Ohio. He received a law degree and moved back to Youngstown after serving as an Army officer during World War I. When the stock market crashed in 1929, he had been practicing law for approximately 10 years, largely representing local businesses. After nearly two years, he began to grasp the magnitude of what had happened to American economic life, and in June 1931, he began writing down his impressions in a diary that he maintained intermittently until he died in 1978. His perceptions and experiences have a chilling similarity to our own era, and The Big Money believes that Roth's words—though they are 75 years old—have much to teach us today; we'll be serializing several excerpts.

Here is the first installment:

June 5, 1931. Immediately after the 1929 crash the speculators rushed in to buy "bargains" but were badly mistaken because the market kept going down and down even tho' industrial leaders kept on assuring the people that everything was fine and the worst was over. At the present time the newspapers are urging people to buy these "bargains" but opinion is much divided as to whether or not the bottom has been reached.

Investments in real estate and mortgages fared almost as badly as stocks. Since 1929 foreclosure by the banks has been the order of the day. Day after day real estate can be bought for the price of the first mortgage and there are no bidders except the bank which holds the first mortgage. In this way the banks are becoming the holders of huge quantities of real estate.

The worst feature about real estate in a depression is that it is illiquid and cannot be sold at any price. If it is free of mortgage the owner may hold on until normal times. But in most cases it is subject to mortgage; he cannot collect his rent from the tenants, cannot pay on his mortgage or taxes and eventually loses his equity by the foreclosure route.

June 15, 1931. Stocks continue to go lower and lower and dividends are being slashed right and left. For over a year now people have been buying stocks at what they think are bargain prices. These prices are much below 1929 but there is no way to tell if they have reached bottom. Only the blue chip stocks are still high. It seems there should be no rush to buy bargains in a panic. The opportunities are many and the period is often protracted. The best time to buy, of course, is when the panic is almost over. My guess is that we haven't seen the end yet.