Deere & Company weathered Great Depression

Not too many of we oldtimers are still around who can say that we lived through the Great Depression of the early 1930s.

Young life

In my own case, it’s not really quite true either, as I showed up on my parent’s doorstep in 1933 and I don’t recall the extremely bad times. The sudden and drastic downturn in the economy was devastating for millions of individuals, while many business firms were forced to cut way back and many long established concerns failed completely.

Economy downturn

Deere & Company was severely affected along with all the others but seems to have retained some awareness of the effect on their employees. During the year of 1930 Deere had total sales of $63 million, a figure that fell to just $8.7 million by 1932.

Employment and wages

In 1931, employment was cut by 75%, from 4,800 workers to 1,270, and these few survivors were working reduced hours, often at “make work” jobs. Wages at the Plow Works were cut from $.57 to $.53 per hour in 1931. Salaried employees’ pay was cut by 5 to 10%, and by 25% a year later.

Minimum pensions were reduced from $30 to $25 per month. Paid vacations were eliminated during the years 1931 to 1936.

Savings accounts

Deere did not, however, cut out everything. Employee savings accounts, upon which the company paid 5% interest, had been established in 1920, and this money was made available to laid-off employees to tide them over. In addition, company-paid group insurance was continued for laid-off workers, and the firm made an effort to help needy employees with cash payments.

Employee welfare

Another example of Deere & Company’s concern for the welfare of its employees and the City of Moline was the impending failure of the Peoples Savings Bank of Moline during the early days of the Great Depression. The roots of the Peoples Savings Bank went back to 1857, and during 1866 John Deere had served as president of the then First National Bank of Moline. In 1891, Charles Deere organized the Peoples Savings Bank of Moline, with Charles himself as president.

Banks merged

In 1905, the two banks merged and, when Charles Deere died, William Butterworth became president of both Deere & Company and the bank. Thus, the Peoples Bank of Moline had always been considered the Deere family’s bank and many Deere employees had their money in the institution.

In addition, the Deere company had consistently kept more than $2 million on deposit in the bank. Then, during the banking crisis caused by the depression, bank examiners found that the bank’s cashier and two other employees had, over a period of time, embezzled $1.2 million, which they had then lost in real estate investment schemes.

Capital depleted

The bank’s capital was virtually wiped out and it was in grave danger of having to close, which would have meant the loss of savings for thousands of Deere employees and other Moline residents. At the time, William Butterworth was in Washington as head of the United States Chamber of Commerce and Charles Wiman was running the company. Wiman and three other company officers made the decision to bail out the bank.

Special meeting

Wiman called a special meeting of the Deere Board of Directors on the morning of the day the bank examiner was to close the bank and told them:

“If we do not do this the bank closes…As I view it, there are approximately $7,000,000 of savings deposits in this bank, largely made by the wage earners of our factories, and the effects upon them of the closing of the bank, and the resulting consequences to this company, are beyond calculation.”

Funding

Deere & Company therefore gave the bank a check for $1,290,000, staving off the crisis. Later, when the bank needed additional funds for a cash reserve, William Butterworth, Charles Wiman and Dwight Wiman gave the bank $650,000 in exchange for notes which were never fully paid back (obviously, the Deere family wasn’t pressed for cash during the hard times).

Big business

We read a lot about “Robber Barons,” and the greed of big business in those days, but I wonder how many modern corporations would do what the leaders of Deere did back in the early 1930s. In fact, I doubt very much if Deere & Company would be so generous today.