Depressions in Albany County’s Early History
The “Great Depression” that followed the 1929 stock market crash was felt nationwide and even worldwide. But in Wyoming the previous decade was almost as bad, ranchers suffered, as did the towns like Laramie and Rock River that grew up to support them. Plus, there were two even earlier Wyoming depressions that had long-lasting effects.
Earlier depressions
One began almost immediately after the county was formed as part of Wyoming Territory in 1868. Within the year track-laying crews of the Union Pacific Railroad (UPRR) reached Utah. Deprived of the track-layers wages, many Laramie City residents struck out for opportunities down the tracks. Laramie shrank to 800 residents, as Kim Viner reported in “A Brief History of Laramie Wyoming” published in the online encyclopedia “wyohistory.org” in 2018. There were fears that Laramie might become a ghost town, often the destiny for end-of-tracks towns.
For the 2,027 residents remaining in Albany County in the 1869 special census, most economic gain was from the US government. The Homestead Act and Pacific Railway Act were both passed by the US Congress in 1862. The Civil War intervened, but by 1869 more easterners were venturing west, and the UPRR, though it was done laying track locally, still had a generous land grant from the government as an incentive to develop customers. It responded by establishing local industries requiring transport of goods by rail to markets.
1890s depression
Laramie rebounded from the late 1868 depression. But another came in the 1890s. University of Wyoming historian T.A. Larson points out that although Laramie was “the most industrialized city” in Wyoming in the 1890s, it suffered the loss of much of that industry. The flour mill, cigar factory, and the much-heralded glass factory all closed soon after they opened. Even the UPRR rolling mill, a steel recycling plant that opened in 1875, did not retain the 300 employees of the factory’s peak operation in the 1880s. It operated at lower volume until 1910 when a disastrous fire ended it.
Several factors, including overbuilding of railroads, caused the UPRR to declare bankruptcy in October 1893. Local railroad layoffs probably ensued, and on top of that, mining, aside from coal, had yet to develop profitability. The government had closed most military forts in Wyoming including Albany County’s Fort Sanders, which was decommissioned in 1882. Thus, as Larson writes, major economic drivers in the county dried up, leaving only the livestock industry and the federal government to prop it up.
The blizzard of 1887 decimated herds to half of what they had been in the early 1880s. Closure of the local fort meant the end of government contracts for meat purchases. The Warren Livestock Company – the "largest of its kind" with land in Laramie and Albany Counties – went into receivership in 1893 says Larson, though it rebounded later.
There were reasons to believe that wealth lay below the surface in hard rock mining and oil, but only coal was being mined at a profit and not in Albany County. Rumors abounded of copper, gold and silver in the mountains, but most were found to be fraudulent or only marginally profitable, if that. Oil and other mineral reserves were published by the Wyoming Geological Survey, but no major demand had developed. Laramie’s Elmer Lovejoy and others were experimenting with gas-powered “horseless carriages,” but none had caught on yet.
Tourism was in its infancy in the 1890s. Yellowstone Park had been established in 1872. But it was hard to get to and a long way from Laramie on unimproved roads of the 1890s. Dude ranching and mountain get-aways such as those established in the 1920s in the Snowy Range came later. In the 1890s, most tourists saw Wyoming from the comfort of a railway car.
It was also a difficult time for local banks. Two of Laramie’s banks, the Wyoming National and the Laramie National merged in 1895. The Laramie Republican reported on September 5, 1908 that the resulting bank had survived the “terrible days of 1893” and was on firm financial ground by 1908. The newspaper declared that Albany County was on the brink of prosperity, but in 1908 it had not yet happened; instead, things got worse.
Agricultural Depression
Most of the US enjoyed booming prosperity in the “Roaring Twenties,” before the huge setback of the depression that started in 1929. However, in Wyoming an exceptionally brutal winter of 1919-1920 began a decade of severe economic hardships.
Two main drivers of the statewide economy, agriculture and mining, declined in the 1920s. The effects were felt in almost all aspects of business. In Laramie, prices plummeted, jobs were scarce, and the boom times in the rest of the US spurred some people to leave the county. While Wyoming’s population increased by 34 percent in the 1920 census compared to 1910, Albany County’s showed an almost 20 percent drop, from 11,574 to 9,283 people.
This “Agricultural Depression” is not talked about much these days because it merged with the Great Depression. But it was severe enough to have made a big impact on Albany County, effects of which can still be seen today as small ranches were consolidated into much bigger ones.
The government had encouraged ramped up production in farming and ranching to meet military demand for meat and wool. But when WWI ended, markets for local agricultural products declined, especially those from Albany County’s dryland livestock ranches.
Immigration at around one million people a year should have fueled a bonanza for food producers. But that ended with the Immigration Act of 1924 which put the first quotas on the number of immigrants permitted into the US. Figures compiled by the Tenement Museum in New York City show an 80 percent reduction in the number of immigrants, from one million down to 165,000. An unintended consequence was extreme poverty among new arrivals. Food scarcity in the 1920s was felt on both coasts, where immigrants congregated. Inefficient distribution channels for food that might have anticipated demand could not keep up.
At the same time there was a decline in Wyoming’s coal and other mineral industries. While there wasn’t much mining in Albany County to be affected by the worker layoffs, the agricultural depression impacted shipping industries like the UPRR. Wyoming ranchers may have been spared the large debt for shiny new equipment that farmers in other states borrowed to acquire – they were still using horses in Albany County – but local ranchers were in dire straits as demand for meat and wool declined.
Livestock sell-offs
Albany County rancher Frank S. King in wrote in 1922 that about a third of the livestock in the state had been lost, due to declining prices, blizzards, drought, and the high cost of supplemental feed. In his 1965 book “History of Wyoming,” T.A. Larson quotes King as saying: “The cost of carrying sheep over the winter was more than the sheep were worth in the spring.” King recalled that in one week, the price of wool dropped nearly 70 percent. Livestock owners were forced to sell at a loss.
Tom Rea, writing in wyohistory.org in 2017, reported that in the 1920s, “Steers that had sold for $150 in 1920 went for $65 in 1924.” Prices for cows went even lower, and land value declined by 70 percent in Rea’s account. Those who had financed these purchases, mainly banks, now had to foreclose on loan collateral and lost a great deal of money in the process.
A boom in ranching that had occurred in the 1870s and 1880s attracted adventurers mainly from England and Scotland who came to Albany County to invest in land, horses, and cattle. Those had mostly failed by the 1920s. Foreign investment in western ranching almost disappeared.
Bank failures
Many bank failures in Wyoming occurred almost a decade before the famed closures that would come with the Great Depression, according to Rea in another wyohistory.org article, “1924: The Year the Banks Closed.” Not all Wyoming banks closed that year, but by the end of the 1920s, well over half of the 185 banks that had been operating in Wyoming did close.
None of the three Laramie banks in the 1920s failed, though they undoubtedly did have to do major belt-tightening. The story was different in the only other incorporated town of Albany County, Rock River. There, one bank that had emerged from two earlier banks failed in 1923, and one that came later failed also, leaving that town as it is today, without a bank.
Homesteading
A huge homesteading spree began in 1915 and continued through 1922 as over six million acres of federal land in Wyoming was transferred to private ownership through the Homestead Act. Most of the applicants were Wyoming rural residents with easy access to mortgage loans from local banks, according to data compiled by Larson from Department of the Interior records.
Soon, however, much of that land was foreclosed upon or sold for taxes. As Larson describes it, losses were mostly in unirrigated land. Ranchers increased their acreage, but there was no economic gain for them—dude ranching, game hunting and other non-grazing uses of land had yet to become major income producers. Some ranches survived by switching to dairy cattle, selling garden produce, or with someone in the family finding a job in town. However, many ranches were sold at rock-bottom prices.
Times are Tough
In 1919 national prohibition went into effect. Larson quotes Jim Griffith, a Lusk publisher as saying, “The 1920s were a tough time – many a small rancher who was otherwise a law-abiding citizen…embarked in the business of making moonshine.” Larson dismisses prohibition by saying that “Excessive zeal was less common than laxity among the local officials” regarding prohibition enforcement. Even state officials looked the other way rather than prosecute ranchers and others who were already stressed. There were many unintended consequences of Prohibition, but one often overlooked was public skepticism about the ability of the federal government to solve economic problems. It probably led to President Herbert Hoover’s assessment that the stock market crash of 1929 was a “business depression” that business would solve.
While moonshine-making may have profited some Wyomingites in the 1920s, industrial workers faced layoffs. The UPRR laid off a third of its employees beginning in December 1920, and those employed in mining declined by 40 percent in the 1920s. In 1928, Wyoming’s unionized miners accepted a $1.20 cut in their daily wage to $6.72. This anecdote reported by Larson indicates a general acceptance that times were tough, though the nationwide depression starting in October of 1929 had yet to begin.
Times were soon to get much tougher.
Editor’s Note: Judy Knight is Collection Manager at the Laramie Plains Museum. This is the first in a series exploring the effects of depressions in Albany County.
Caption: A “closed” sign on the Greek Revival facade of Rock River’s First National Bank is an understatement. Not only did this bank cease operation in the 1923, it’s Vice President and Cashier, Lewis C. Butler, was found guilty of embezzlement in 1924 and sentenced to Federal Prison in Leavenworth, Kansas. Other banks in Rock River hoped to ride the oil boom in neighboring McFadden but the boom fizzled and all were gone by 1931, the year that Citizen’s State Bank, which had bought this building in 1927, failed to pay property taxes. Bought by the Town of Rock River in 1936, it became a post office and town community center but is now vacant. It was placed on the National Register of Historic Places in 1988.
Credit: Tom Rea photographer, 2017, published in wyohistory.org; used with permission.