A Brief History Of The Motor Car Chapter 3
The Depression

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A BRIEF HISTORY OF THE MOTOR CAR
Chapter 3

In 1929 the world of high finance changed and not for the better. In a matter of days the New York Stock Market lost over forty percent of its value and it was much the same throughout the world where the US Dollar was the marker for stability. A few years earlier the powers that be, both here and in other financial centers came off the gold standard which in simple terms means that they could and did print paper money with no real security to back it up as if and when the financial paper called to be paid.

For several years would be investors had been buying stock with a minimum down payment with the hope that the stock would increase in value and they could pay off the debt and pocket the balance. Strange to say in the beginning of this policy stocks did increase, sometimes in a matter of a few weeks and of course when more stock was purchased with only minimum investment the cycle repeated itself. Credit was the way of the world until October 24th 1929 when in the last hour of trading on the New York Market over 2.6 million shares were sold most at below value, the bottom had fallen out of the Get Rich Quick world.

Ford Model A Sports Coupe 1928

The following year was much the same both in the US and throughout the financial world and the trend continued well into the next decade. Did this effect the production and sales of motor vehicles? Of course it did, many manufacturers of both vehicles and vehicle parts went under, millions of workers lost their jobs, who could afford to buy a car when it was almost impossible to put food on the table?

Ford had introduced the Model A in December 1927 over the next few months thousands of orders had been placed for this car especially at a price of under $500 dollars and Ford Credit was available just like the stock market! By some financial wonder the Ford motor Company managed to survive their "Buy with Credit policy" and that certainly helped to keep the company in business., In fact their sales increased while most other car manufacturers were on the financial ropes trying to survive.

BMW 3-15PS Austin-Seven 1929

The baby British Austin Seven that saw the first light of day in 1922 and like the Model A was inexpensive compared with the more established vehicles, suddenly became popular with manufacturers in America, and Europe., with requests for licenses to produce the car. A classic example was the now famous BMW whose first product was a baby Austin with a BMW badge on the front. A few expensive cars were produced but sales were at best slow. The rich still had money to spend but despite what Hollywood may have projected on the silver screen in the 1930's. life was tough for the vast majority of people. The situation was not helped by the fact that credit was hard to get so such purchases as cars etc., was limited. In 1934 Ford introduced the then modern Y Saloon. Cheap to run and equally cheap to own this car was still around in Ford show rooms 1940.

Fiat Topolino 1937
Image submited by Rick Feibusch

The world economy decided the size and cost of the motor vehicle during this period, we are all aware of the German VW that Hitler asked Dr Porsche to design, another car that lasted well into the post war years. Small was certainly beautiful as far as the general market was concerned and if you could add economy you were on the right track. A small example of small cars produced during this period would include.. AGA Germany with a one liter engine.. Datsun Japan 750cc power unit.. Fiat 500..Morris Eight UK.. and various strange three wheel products like the British Morgan and the US Standard.

The outbreak of WWII (1939-1945) certainly helped the recovery of industry in the USA. from Boats to Cars to Airplanes and the use of credit once again became respectable! Next time we will look at the war years and the start of the new post war car world.
Geoff Wheatley

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