This article first appeared in Fortune’s December 1930 issue. It highlights the importance of the holiday shopping season in the early part of the 20th century and the effect the stock market crash had on the retail sector over the following year. We’re reprinting it here at the beginning of this year’s holiday shopping season as our economy bounces back from its worst recession since the Great Depression. You can read a summary of the article here.
AN Elderly Gentleman with a Peter Arno mustache sat suddenly bolt upright in his chair near the window in New York’s Union Club on December 20, 1916, and slapped viciously at an item of news in that morning’s Times. “Good lord!” he exclaimed, in the tone he reserved for collapses in the market and the demise of friends. The Man on His Right paid no attention to him. The Elderly Gentleman said again, and louder, “Good lord!”
The Man on His Right lowered his copy of the Times sufficiently to peer over the top of it.
“Did you read about the Christmas trees?” asked the Elderly Gentleman. Emotion that would not be suppressed vibrated in his voice.
“Christmas trees?”
“Yes. A corner. Here, I’ll read it to you.”
Investigators in the employ of Joseph Hartigan, Commissioner of Weights and Measures, in their endeavor to unearth facts which would bring down the high cost of living, came yesterday upon evidence which, they said, indicated that the Christmas tree market had been cornered. Mr. Hartigan was unable to learn, however, whether the conditions found in a few instances were general.
He said he thought the price of trees represented a jump of at least 100 per cent over last year, but he did not think that a boycott on trees would be popular.
“I have heard of a Christmas tree king before,” said the Commissioner, “and, if the reports of my agents are true, it looks as if a man might clean up $100,000 or more by cornering the market.”
Quotations from the Producers’ Price Current yesterday, showed that the prices of Christmas trees had been climbing along with eggs, butter, meat, coal, and almost everything else. Here are the wholesale figures: trees 8 to 12 feet, each $1.50 to $2.50; 15 to 20 feet, each $5.00 to $15.00; 25 feet and over, $1.00 a foot.
“Well,” said the Man on His Right, “what of it?”
“What of it?”
“It’s only $100,000, after all. You could hardly call that a corner.”
“But it’s Christmas trees. It’s the idea of the thing. You know, Tiny Tim and all that sort of thing. Good lord, when I was a kid at home, we used to go out and cut our own. To think of a person getting a corner on ‘em … exploiting ‘em …”
“When you were a boy,” said the Man on His Right, “Christmas was Christmas. And Business was Business. You could take all the Christmas there was and put it in one pile and then take all the Business there was and put it in another pile, and they would not look anything alike. But you can’t make two piles today. They’re all mixed up together.”
Business has invaded Christmas and Christmas has invaded Business. So, although every drop of Druid blood in the veins of the Elderly Gentleman of the Union Club froze at first mention of a corner in Christmas trees, he finally had to admit that if a corner in Christmas trees was what the unnamed speculator wanted more than anything else for Christmas, there could be found no good reason in this generation why he should not have it.
Christmas and Business are so hopelessly tangled up with each other that it is practically impossible to find out just how much one depends on the other. It is plainly not a case of Christmas ivy twining itself about the trunk of a sturdy business oak. It is more a matter of two oaks growing in awkward self-satisfaction out of the fertile and pleasant loam of the Fall Buying Season. Except that there is an essential unity to an oak, and there is nothing approaching unity in the Business-Christmas business. There is action, and there is continuity.
1929
Even in the mad winter of 1929, above the dying bellows of the Bull Market, could be heard sleigh bells and the quaintly anachronistic “Merry Christmas to all, and to all a good night.” Santa Claus managed by his very madness to divert attention from the carnage in Wall Street for a little while, and by that much enabled the U. S. citizen to throw up philosophical bulwarks against the the bad times that were advancing on him.
The Christmas shopping season begins in live earnest on the day after Thanksgiving. Many a department store intrudes loudly upon Thursday’s holiday quiet to remind its neighbors by means of pageant or parade that Friday morning is the time to begin to buy. While many thousands of people lined Broadway in New York, Summer Street in Boston, and equivalent thoroughfares in most of the principal cities of the country last year to watch the antics of Santa Claus and his venal clowns, thirty-five heads of electric light, heat, power, and rail companies sat in a conference with President Hoover in the White House and pledged themselves to $1,810,000,000 worth of new construction. “Black Wednesday,” November 13, was still news, and “Black Thursday,” December 12, was only two weeks in the future. Statisticians had not yet finished laying end to end the dollars lost in the spasmodic contraction of market valuations. Eddie Cantor was reaping royalties on his funny book, Caught Short. Everyone was finding it extremely difficult to breathe in the vacuum created by the sudden departure of paper profits.
But inasmuch as Santa Claus’s business had already progressed through all the stages of buying and most of the stages of store decoration and the training of extra holiday help, appreciable curtailment of plans was impossible. For all that grander gadgets than ever before were on display, there were deserted store aisles, beseeching looks upon the faces of department managers. And there were reports of stores which complained that in the throngs of people who crossed and recrossed their thresholds, there were only a few who actually made purchases. Particularly hard hit were jewelers who had made up expensive “gift numbers” for holiday sales which never were completed and the couturiers who were buried under an avalanche of cancellations of orders. Santa Claus, arriving on the day after Thanksgiving, had a sense of dropping in by mistake upon his own funeral. Here were the toys and baubles, the hosiery and vacuum cleaners, the emerald brooches and the electric refrigerators. In a million mirrors he saw his effigy dressed up in his own costume with the smell of mothballs still upon it. But the eyes that peered out through the gap between crepe whiskers and crepe hair were dubious.
Then came inventory week. For all the sad tales of deserted aisles, many and many a department store head reported that he had felt no appreciable reaction to the market situation in his Christmas sales. People were expecting a return to prosperity by spring in those days.
1930
But any department store manager who thought that he had already weathered the storm soon found the seriousness of his miscalculation. Unemployment first, and then curtailment of pay rolls during the months that followed, slowly but surely reacted upon his trade. The graph of his sales, unless his store was in a singularly fortunate bailiwick, gradually dropped downward. Not even normal seasonal upward movements were followed. In August, sales were off 9 per cent from 1929’s August record, and the average for the year’s first seven months (despite, on the whole, remarkable steadiness during the late winter period) was off 6 per cent. Thus did the department store, always a laggard in reflecting business conditions, at length show what had already been shown in other divisions of business and trade. When department stores were off 9 per cent, a new low for automobile production (55 per cent below 1929’s August) had been reached. September’s steel production was the lowest (with the exception of July, 1924) that it had been since the winter of 1921 and 1922. The consumption of electric power fell far below its trend line, and its decrease during the first week of October (5.1 per cent below 1929’s figures for the same period) was the greatest to be reported since September, 1921. On October 4 the Railway Age noted that for the first time in railway history, car loadings were as small as they had been ten years before. During the slump of 1921, freight business was almost 22 per cent greater than it was in 1911. And in mid-October the daily average of 300 common stocks was five points below the rock bottom average of November, 1929. The thermometer dropped, putting an end to almost all outdoor work. A disheartening influx of jobless men into urban centers was beginning.
The depression, in short, had reached a point below which it could not penetrate very far, and businessmen, politicians, and economists began to talk about concerted and determined remedial action.
The needed thing, all agreed, was an acceleration of spending. An increase of $267,000,000 in savings deposits throughout the U. S. between June 30, 1929-June 30, 1930 indicated that even with lessened income people were setting aside greater liquid reserves—a hesitancy to spend which accelerated the forces making for reduced business activity. If these reserves could be released, if goods could be started moving at a more rapid rate, if shelves could be depleted, then the wheels of production could be started revolving, idle men and idle capital put to work, and the tide turned. Philadelphia began a determined “Buy Now” campaign and exhorted the rest of Pennsylvania to follow suit so that that state could come out of the slump first.
It is possible to do one’s Christmas shopping almost anywhere. There are businesses that exist only by virtue of the holiday trade. Of fireworks, even, one-fourth are sold then, because below the Mason-Dixon Line Christmas and not July 4 is the day of pinwheel and firecracker. Were it not for Christmas, novelty shops and greeting card houses, many of them, would vanish. But it is in the department store where novelty shop and toy store are side by side and plum pudding and mufflers are sold under the same roof that Christmas madness is collected in one grand mélée, there that Santa Claus makes his headquarters.
Each year in Manhattan, R. H. Macy & Co. does him honor with a parade of Gargantuan balloons, designed by Tony Sarg and constructed by Goodyear. The parade comes down Broadway on Thanksgiving Day, and in 1929 consisted of ten balloons representing the Katzenjammer family of comic supplement fame, plus a dragon 177 feet long, a dog, a turkey, and a horse and rider. All of the balloons with the exception of the dog were inflated with helium (of which gas R. H. Macy & Co., by virtue of this annual parade, is the largest commercial user in the U. S. except for companies actually operating airships) and were released after their march at the entrance of Macy’s store. To each was attached an offer of $100 reward for return.
In 1929, also, The Fair in Chicago provided what was presumably fitting Christmas entertainment in vaudeville show in which Sophie Tucker was the headliner. The inimitable Miss Tucker, famous for her bawdy lieder, was assisted by Bert Lytell, prominent actor in what Miss Tucker calls the “movizz,” Fisher’s Animal Circus, oriental magicians, jazz orchestras, and several local masters of revelry. The entertainment was staged in an arena set up in the toy department. Audiences of 2,000 were entertained at each performance. In addition, for a fare of twenty-five cents, children were carried in a zeppelin to Santa Claus and were presented by the saint with a surprise package, photographed on a pony’s back with Santa Claus at four pictures for fifty cents. (Not only The Fair has discovered the value of the surprise package racket, highly recommended by Playthings, foremost trade paper of the toy men. By this simple device, it is often possible to clean up tremendous stocks of otherwise unsalable gimcracks.) The Fair not only sold surprise packages but gave away some 50,000 Bob White whistles.
Scarcely a city or town in all the broad land does not reflect the urge, what with Filene’s clerks’ choral society coming down to the store early in the frosty Boston mornings to send carols ringing up and down the aisles (and out over a wide radio hook-up) and Wanamaker’s hiring Robert Edwards, the ukulele impresario, to paint fresh murals all over the walls of the toy department while psychologists in attendance advise parents, aunts, and Old Ladies from Metuchen what to buy for the three-and-a-half-year-old introverts (but that is mixing Christmas and Business up with Art and Science as well and might lead almost anywhere). And what with Kaufmann’s in Pittsburgh bringing John Vassos, the Greek artist who made Oscar Wilde contemporary, to their store to tell them how to make the place look like one of his Packard custom-built body advertisements or the Ballad of Reading Goal. And what with Bamberger’s sending out a fifty-four-foot float (fifty-four feet, four inches, to be exact) over most of northern New Jersey with either reindeer and eskimos or just plain old fashioned carolers on it, and what with Santa Claus’s son (pat. applied for!) coming to the Jordan Marsh Company in Boston by airplane, power boat, and motor cavalcade. And what with Christmas, finally, in its most Dickensian aspects organizing itself along the approved lines of Going Business or a Political Machine—kettles and chimneys on every street crossing, bells jangling, coins dropping …
Thus, in 10,000 department stores, does one find justification for the oft-raised lament that Christmas has become what archaeologists say it once was—nothing but a pagan festival: Sophie Tucker singing Eli Eli by request … psychologists … airplanes … surprise packages … street parades … performing midgets … 50,000 whistles Bob-Whiting in Chicago … Thanksgiving behaving as a curtain raiser … somebody patenting the “idea” of the son of the grand saint … and, as Walter Winchell says, “you and you and you and you” spending SIX BILLION DOLLARS in an “average” year.
Santa Claus has already put in his appearance in some quarters this year. This Thanksgiving week sees another Macy parade. And the yearly Saturnalia opens from Portland to Portland on Friday. That is a fact—one of the few facts that business prognosticators and trend calculators have had this year to be thankful for. You will go to your favorite store and buy presents for your wife or your husband and for the children and for Aunt Fannie and Uncle Horace. How much you will spend is the riddle which Santa Claus and his thousands of merchandising assistants have tried to solve in advance. And your favorite economist has been staring over Santa’s shoulder watching him write down figures and erase them, hoping to be the first to announce the answer. Santa Claus will not know before December 26. But it is certain to be in excess of $5,000,000,000. That is the gloomiest prediction that anyone has yet made. From the industrial East where business is bad to the far Northwest where it is fair, department stores are preparing for more sales than last year, though on account of the almost universal recession of commodity prices they do not expect that it will much more than equal last year’s dollar volume.
Their hopes are, it must be said, sanguine hopes in which the statisticians with their charts do not acquiesce. If buying power is less as measured in terms of dollars, it is, they say, as great in terms of what a dollar will buy, and there remains only the hurdle of psychological reluctance to buy. This reluctance they rely on Santa Claus to overcome. In late September, Julian Goldman pointed out to an audience of economists and business journalists that if each U. S. family could be induced to spend $100 immediately, nearly $3,000,000,000 worth of commodities would be consumed. This, he said, would give industry sufficient acceleration to pull itself out of the slump. The more than $5,000,000,000 which Santa Claus, aided by Sophie Tucker, Tony Sarg, and a very competent corps of assistants, will pull out of pockets and bank accounts between this Friday and December 24 exceeds that demand magnificently.
Thus has come Santa’s big chance. If he does the not impossible and turns the tide, the man who does not believe in him will nevermore be found.
