Amy Feldman - Subpage Collage
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Money, November 2000


My family lost almost everything in the Great Depression. Two generations later, we’re doing well again. But to us the economy and the market look much as they did in the late 1920s. And this time we’re playing it safe.

I never met my grandfather, Abe Feldman, who died five years before I was born. Yet his life has cast a long shadow over mine. Born in the Ukraine, Abe was one of hundreds of thousands of immigrants who landed in America shortly after the turn of the century in search of a better life. And he soon found one, building dozens of houses in Pittsburgh with his older brother Max. By 1929, Abe drove a new automobile and lived in a handsome house that he’d built for himself in a fashionable Pittsburgh neighborhood.

Then in October 1929 the stock market crashed. As unemployment surged and would-be home buyers ran out of cash, the property market crumbled. And Abe and Max’s story became, like so many others of their generation, a tale of business collapse, financial hardship — and suicide.

With the stock market soaring once again and seemingly everyone getting rich, I began to wonder what had happened two generations ago that had lured so many ordinary Americans, like my grandfather and his brother, to abandon caution and risk ruin. I wondered if it could happen again, and if the seeds of speculative disaster were already embedded in today’s market. I also started to think about my own attitudes toward money and how deeply they’ve been shaped by the grandfather I never knew.


My grandfather was born around 1887 in the town of Pavoloch, about 60 miles southwest of Kiev. His family sold carved hope chests, cupboards and mahogany closets in the town’s outdoor market. But there were many reasons to leave Pavoloch. Abe’s family was Jewish, and Jews in the Russian Empire at the time faced legal restrictions on buying property, going to school and traveling. As a wave of anti-Jewish pogroms swept the country, Abe’s father sailed for America with promises of sending money for his wife and sons to join him. Instead of money, he posted back a “get,” a religious divorce decree, and was written off as dead.

Abe and Max stayed in Pavoloch and learned to make cabinets from their grandfather. But in 1909 their mother Hannah came up with a plan to smuggle the two boys to England, which was cheaper than going directly to America. Abe and Max were lucky to escape when they did: Within a decade, pogroms had decimated Pavoloch’s Jewish community. Among the dead were members of their extended family.

This was the heyday of immigration to America, and the influx of newcomers threatened to overwhelm Ellis Island. So when Abe and Max arrived in America, around 1910, their first vision of the country was the port of Baltimore. They were in their early twenties, spoke little English and didn’t have even a high school education. But they were brimming with dreams of a new beginning. Abe wound up in Chicago, where an uncle was developing houses, while Max headed for Pittsburgh, where an acquaintance was in the same business.

It was a great time to get into real estate, and the two brothers were soon riding the economic boom. By the time my grandmother Dora, who¹d come to the U.S. from Lithuania, married Abe in 1914, he was considered quite the catch: smart, wealthy, good-looking. In their engagement photo, he’s a fine-boned young dandy in a suit; she’s a heart-faced woman in a cinched-waist dress with a fur collar.

After a decade in Chicago, Abe and Dora followed Max to Pittsburgh. It’s hard to imagine now, but Pittsburgh was one of the country’s richest and fastest-growing cities. It was the epicenter of the Industrial Revolution, the steel town where Andrew Carnegie and Henry Clay Frick built their fortunes. From 1880 to 1930, the city’s population more than tripled to nearly 700,000, and all the newcomers needed places to live.

In 1923, my grandfather, then about 36, joined his brother’s partnership. At the time, the firm had six parcels of land primed for residential development and a $12,000 mortgage. In December the brothers sold one of the homes they’d built on that land for $21,000, the equivalent of more than $200,000 today. By 1929 they were buying and selling with abandon: snapping up vacant lots, subdividing them and building middle-class homes with porches in front and garages out back. The prices rose quickly, and often the buyers would assume the construction loans as part of the purchase price. Max, older and in business longer, was the brains of the operation; Abe, ambidextrous and hard working, handled the construction and did all the carpentry himself. My dad Melvin and his cousins still tell stories about Abe’s exacting standards — how he’d send back a batch of sand because it didn’t match the light-colored grains he’d already bought to make cement. “He had only one way to work, and he didn’t care how much it would cost you,” recalls one of the cousins, Bernie Latterman. “It was going to be right.”

These were the glory days for speculative development, and financing was plentiful. Prudential Insurance and other pioneers of real estate lending typically doled out three- to five-year loans. The borrower made minimal payments until a big balloon payment came due at the end of the term. By then, the thinking went, the value of the property would have surged, so it would be easy to pay off the loan.

No one seemed to worry about a bust. Downtown Pittsburgh was starting to look like a Monopoly board in the giddy throes of the game. The lavish William Penn Hotel, the government buildings and the city’s first tall buildings were creating a new skyline. New residential neighborhoods, known as streetcar suburbs, were springing up too. It was in one of these areas, Squirrel Hill, that the brothers settled and did much of their building.

By the late 1920s, Abe and Max were doing well enough to buy stylish new cars — Abe a ’28 Chrysler, Max a ’29 Nash. According to family lore, their father, who had abandoned them back in Pavoloch, now came to ask them for money — and they refused to see him. “My father was, I hear, a wealthy man in the ’20s,” my dad recalls. “They were looking at retiring at 45.”

They weren’t alone. Euphoria was widespread, not just in real estate, but in the stock market too. The Dow nearly doubled between February 1928 and September 1929, when it hit what was then an all-time peak of 381. A respected Yale economist famously declared that stocks had hit “a permanently high plateau.” Within weeks, the market began to implode, plunging to a low of 41 in July 1932 — a fall of 89%.

For a while after the crash, the family business seemed okay, and Abe and Max kept building. Then everything began to unravel. Buyers started weaseling out of contracts with the slimmest excuses. Renters moved out in the middle of the night to avoid paying their bills. And Abe and Max suddenly owed nearly $200,000 — the equivalent of more than $2 million today. There was no chance of keeping up on the payments. “That’s how they got caught,” my dad’s oldest brother Jerry recalls. “There was too much property, and the property wasn’t of any value.”

Prudential, owed $30,000 for the construction of an apartment building, got a court order in 1930 that allowed it to pocket the rental payments for the entire building. Other blows soon followed. In April 1932, a defaulted mortgage triggered another court case against Abe and Max: They were ordered to sell a two-family home to the lender for just $1,358. Buyers were so scarce that their remaining properties were essentially worthless. The game was up.

On the morning of May 17, 1932, Max sat in his car at home on Beeler Street. It was one of the nicest houses the brothers had built. Perched on a hill, with a steep staircase leading up to the front door, it was barely visible through a thicket of trees out front. Max turned the ignition and waited as the garage filled with fumes. He left behind a wife, two teenage sons and no will.

Public records in Pittsburgh show that his estate totaled $26.45 — the Nash sedan worth $25 and just $1.45 in a checking account with Potter Title & Trust. Even in today’s dollars, he’d come down to his last 15 bucks.

My grandfather was left to pick up the shattered pieces of the business.


My dad Melvin, the youngest of Abe’s four children, was born in 1928. He isn’t old enough to remember the boom or the crash, only the hard times that followed. By 1933, the country’s total production had shrunk to two-thirds of its 1929 level, and nearly 13 million people — one out of every four workers — couldn’t get a job. “People would knock on our back door asking for something to eat,” Dad recalls, “and Mother would give them something.”

Thanks to Abe’s manual skills, the family didn’t have it as bad as some. He worked throughout the Depression as a member of a carpenter’s union that built publicly funded projects, like a new home for the elderly. But his optimism had been beaten out of him: The boom-time entrepreneur had become a union guy.

When Dad was born, the family lived in one of the houses his father had built on Murray Avenue, the main drag of Squirrel Hill. But they didn’t live there — or anywhere else — for long. As the lenders circled, they moved again and again, a total of four times between 1933 and 1938. The kids weren’t told what was happening; they simply picked up and left. “The moving vans would come, and in a few days we’d unpack the boxes,” Dad recalls. As for the car, Abe couldn’t cover its upkeep so he put it in a garage, where it stayed for years. He refused to drive it ever again.

As they grew up, my dad and his brothers fudged their ages to get hired as delivery boys or soda jerks. They packed their lunches or ordered the school’s Depression-era lunch special: a scoop of mashed potatoes with gravy. They went to the schoolyard and played with borrowed balls and bats, and never asked their parents for money. “Although we were poor as kids, we didn’t know it,” my dad says. “All our friends were in the same boat.”

The records in the deeds office and court of common pleas in Pittsburgh show just rough things had become for Abe. In 1933, four years after the crash and a year after Max’s death, the real estate partnerships were dissolved. Our family and Max’s split the remaining row houses, along with the mortgages. Creditors, like Center Lumber of Pittsburgh, lined up in court to get judgments, but there was no money left. One by one, the lenders grabbed back most of the houses, in court-ordered sheriff’s sales, often for as little as a few hundred bucks per house.

My dad recalls how his father tried to hold everything together, juggling debts and finally salvaging 10 homes from the lenders. And he’s emphatic about one point: Abe never declared bankruptcy. He never even considered it, family members say, though on paper the debt appears overwhelming. It’s true that bankruptcy laws were far harsher then than now, but Abe’s decision was not just practical: It was, my dad says, “a moral issue.”

Abe never did become rich. But he held onto those 10 properties for many years, then sold them as the economy revived after World War II. After struggling for so long, it was a huge relief to be rid of them. He took the proceeds of those sales and, in 1950, built himself an attractive new home — without borrowing a dime.

As for my dad, he’d be strongly influenced by what had befallen Abe. “It was so hard for him to dig his way out,” Dad says. “I like the idea of a cash backup because of what happened to my father.”

In typical fashion, my dad, now 72, understates the case. He and my mom Sandra, 65 — who, like most women of her generation, lets her husband handle most of the finances — want more than just a cash backup. They’d like a foolproof barrier. Now retired as, respectively, a mechanical engineer and a nursery school teacher, they have no debt at all. There’s no mortgage (they paid it off), no car loans (they paid cash) and not a cent of high-interest credit-card debt. Asset allocation? Some 40% of their investment portfolio is in cash, CDs or other cash equivalents. Even if you count the house, their cash holdings represent more than 20% of their total assets. The rest is in mutual funds, with a big chunk in low-cost index funds. They haven’t bought a stock in 40 years — despite the market’s dramatic rise — though they own shares of Lucent that Dad received as part of his employment with its former parent, AT&T.

In the bear market of 1973-74, my parents were thankful to be on the sidelines. “I didn’t get burned in that,” Dad says. “Some of the guys [I worked with] had money in mutual funds and lost a lot and were very bitter.” But in the current bull market, his caution seems outmoded, even quaint.

Growing up in suburban New Jersey, my brother, my sister and I were taught by our parents to spend our moderate allowances carefully, to do our own tax returns and become self sufficient. My brother Arnie, now 30, tells this story: When he was finishing college, he borrowed my parents’ car, an eight-year-old Dodge, to move his belongings, and the muffler practically fell off. “I called Dad, and he told me to take a coat hangar, a wire coat hangar, and tie it back on,” Arnie recalls. “It stayed that way for three or four years.” And that was the good car. My sister Ellen, now 39, was the only one of us kids allowed to drive the older car, a 1970 Maverick with a habit of stalling out at intersections. One year, the carburetor gave out, so Dad bought a kit and rebuilt it himself. He drove that car for 140,000 miles, until the brake cable mounts rusted straight through.

Many people I know with parents over 65 grew up witnessing similar displays of frugality: phones with bad reception that weren’t thrown out, clothes that were worn to shreds. Our parents’ conservative attitudes about money have, in some form, been passed down to many members of my generation. As Paul Schervish, a Boston College professor who studies the sociology of American wealth, puts it, “The grandchildren of the Depression are the transition generation.” We’re torn, he explains, between yesterday’s fears of poverty and today’s ebullient sense of affluence.


I wasn’t thinking much about all this history three years ago when I decided to buy an apartment. I simply wanted to move and, because of a small inheritance, was able to pull together the down payment. But when I went to my bank for loan approval, the mortgage guy tried to talk me into spending more — a lot more — than I had budgeted, and all I could think was: no way, not me. For six months after that, I scoured the city, looking at apartments each weekend and logging the results in a small, wirebound notebook that I carried with me. For each home, I’d crunch the numbers on a price-per-square-foot basis. Before I signed the contract on the one-bedroom brownstone that would become my new home, I’d considered 120 different apartments.

My friends thought I was crazy. Okay, maybe I was crazy. But, despite the real estate market’s meteoric rise, I still sometimes lie awake wondering if I’ll lose it all.

Saving? Investing? Of course, I do it. I write for a financial magazine, after all. But in today’s giddy market, my approach to investing makes me look like an old lady — at the age of 36. My retirement money is in a diversified portfolio of mutual funds, heavy on low-cost index funds. I even own a bond fund — rare these days for someone my age. I’ve got a bias for beaten-down value stocks and wouldn’t think of buying a high-flying tech fund or an optical networking stock, even if this means forgoing the possibility of racier returns.

My siblings and I are similarly cautious when it comes to spending. Discussing this recently with my sister, we could only laugh at our guilt over paying $100 for any one item — even something as necessary as a winter coat. Like a financial bulemic, I occasionally binge on credit, only to mail in extra payments each month to obliterate that debt. Even my brother, whose lucrative job as a chip designer in Silicon Valley, puts him at the center of the boom, lives modestly — and keeps 15% of his portfolio in cash. “I like the idea of a cushion,” he says.

Pamela York Klainer, a Rochester, N.Y.-based money shrink, says this kind of behavior is common in families that were hit by the Depression. A “family money drama” like ours, says Klainer, typically plays out over at least two generations. The reverberations can be more intense, she adds, if it’s hushed up.

That certainly was the case for us. Until I started researching this story, I’d never visited any of the houses my grandfather and his brother had built, and I’d never even seen a photo of Max. When I went to Pittsburgh this summer to dig up records, I felt strangely guilty for unearthing their story — and shocked by the emotional power of the documents that had survived 70 years since the collapse of their business.

On returning from Pittsburgh, I read economist John Kenneth Galbraith’s classic book The Great Crash 1929, and was struck by the similarities to today’s bull market. Stocks are trading at historically inflated prices again, and we’re taking on debt — including margin debt to pay for these stocks — at an alarming rate. Now, as then, almost everyone seems to be obsessed with investing. I ask my uncle Jerry — at 82 the oldest surviving member of Dad’s generation — what it was like then, in those heady days before the crash. “The stock market was good,” he says simply. “It was like it is now.”

Am I sure that the lessons my family has learned from that era were the right ones? That our financial behavior is smarter, more rational, than that of today’s happy-go-lucky bulls? No. But because I’ve invested the way I have, I should be all right if the stock market tanks. In the meantime, though, the market keeps rising and proving me wrong. And as those who are more optimistic and less burdened by history remain me, I’ve already missed out on so much.


It’s a sunny summer Friday, and I’m tooling around Pittsburgh with my parents, checking out the homes that my grandfather built. We stop at Murray Avenue and Wightman Street, Beeler Street, Dawson Street and Parkview. Dad lived in some of these houses as a kid. Others he’d never known his father had built. The homes still look inviting, with red brick facades, wide porches and flowers all around. They look like places I’d want to live in if I weren’t in Manhattan. And, best of all, they seem solid. “I’m amazed at how well they’ve held up,” Dad says. “These homes are 75, 80 years old, and they look great.”

It’s comforting to know that my grandfather built something so tangible, something that lasted so long. His finances may have unraveled, and the family may have struggled like everyone else after the crash. But the homes themselves are here to stay.

Yet Abe’s legacy is not in the buildings. Nor is it in the way I’ve learned to paint, drill and spackle from my father, who picked up such skills from his father, the builder. It’s in the attitudes that we, the grandchildren of the Depression, inherited toward risk and debt and loss. Abe’s story — his attempts to live the American dream, his successes and his failures — has not been forgotten but has been passed down like a treasured possession from one generation of my family to the next. As we heard it said so many times growing up: May that memory serve for a blessing. Bio photo