Wyoming in the 1920s

This lecture concentrates on two of the “organizing concepts”—state/federal relations (“Washington”), and “boom-and-bust” and colonialism (“Wall Street”).

Most Americans enjoyed prosperity during the decade of the 1920s. In fact, the decade has been nicknamed the “roaring ‘20s” because of the economic times experienced in most of the United States. This was not the case in Wyoming where most residents suffered one of most prolonged economic downtowns in the state’s history. While some people may point to the “great crash of 1929” as the beginning of the “Great Depression” in the United States, Wyomingites already were deep into economic distress. With the exception of tourism, all of the state’s industries suffered economic misfortunes in the 1920s.

The decade began on a promising note with Gov. Robert Carey proclaiming the beginning of Prohibition and optimism that the state would avoid a post-war economic downturn. Prohibition, however, did not enjoy widespread support in most Wyoming communities. In the very first "raid" of a suspected bootlegger, State Prohibition agents shot and killed a young rancher near Laramie who happened to be driving a car resembling one owned by suspected bootleggers. The ensuing scandal tainted the newly formed agency and, six years later, the agency took another blow when its director was convicted and sentenced to prison for accepting bribes from bootleggers.

Most politicians favored Prohibition, at least in the beginning, including Francis E. Warren, Joseph M. Carey, and John B. Kendrick (the three so-called "Grand Old Men of Wyoming Politics.") Opponents of Prohibition, however, had their spokesperson in Caroline Lockhart, a controversial Cody editor who barely survived a libel suit against her paper brought by the county attorney after she accused him of "murder" of a couple of men suspected of bootlegging. In fewer than ten years, most Wyomingites favored its repeal while most state officials acknowledged that enforcement had been a failure.

Government policy as to public lands, however, held out more promise, particularly for returning veterans after World War I. As a result of the Enlarged Homestead Act of 1916 (the so-called Stock-Raising Homestead Act), more homesteads were taken out in Wyoming in the early years of the 1920s than during any previous decade. Veterans filed on lands where only grazing or dry farming was possible. Communities grew up to serve the surrounding farm populations. Small banks popped up in even tiny towns like Lost Springs, Yoder, Medicine Bow and Cokeville. Small businesses, most oriented toward serving the farm and ranch clientele, were started, many by other veterans or newcomers to the state.

The national optimism filtered down to the local communities. Many banks were seriously undercapitalized, but it did not stop bankers from loaning money to area ranchers and farmers in exchange for mortgages on land that was almost certainly continuing to gain in value as time passed.

Commodity prices remained strong during World War I and for the next few years. However, Wyoming suffered from a serious drought in 1919 which turned out to be a portent of things to come. Few farmers were able to harvest more than half of the usual crop yields in 1919. In the following years, prices continued to fall.

Conditions were barely better for workers along the southern tier of counties. The Union Pacific, returning to its pre-war condition, laid off almost one-third of its work force during the four months after December, 1920. Employment in the coal mines, which mostly furnished coal to the railroad locomotives, declined during the decade as the market for coal decreased.

The petroleum industry, strong during the war years, began slowing down in 1923. Exploration declined and production faltered. Just two companies controlled 97 percent of the production in the state by late 1923. The incident that came to symbolize the corruption of the Harding administration, the Teapot Dome scandal, had its origins in Wyoming’s oil fields. (See lecture notes for History of Oil).

By 1922, many Wyoming ranchers and farmers were having to borrow more money in order to meet the escalating costs of farm equipment and feed. More and more land was placed into production in order to grow enough to pay back the loans. At the same time, commodity prices continued to fall.

Concern over the deteriorating condition of the economy caused Republicans to defeat the re-election bid of Gov. Carey in the primary election in 1922. He lost to Rock Springs banker John Hay who then lost in the general election to Cheyenne lawyer William Ross, a Democrat who campaigned on a platform of aid to farmers and ranchers. Like Carey, Ross favored Prohibition, viewing it as a “righteous cause.”

Early in his term, Ross proposed a constitutional amendment which would allow for a mineral severance tax. Most of the state’s coal was being produced by the Union Pacific Railroad’s mining subsidiary and Ross believed the railroad was not paying its share of taxes. Without another source of revenues, an unequal tax burden would continue to fall on ranchers and farmers in the form of ad valorum taxes. No sales or income tax existed. State revenues came from leases of state lands, mineral royalties from state lands and license fees. The Oil and Gas Conservation Act, passed by Congress in 1920, allocated to Wyoming a share of federal mineral royalties. None of these sources, however, produced the income needed to provide more than just the minimal state services. Certainly, there was nothing in place to allow the state to intervene in case of an economic crisis.

Gov. Ross, not up for re-election until 1926, nonetheless took to the campaign trail to gain support for the severance tax constitutional amendment. While lecturing in Laramie on the issue in October, he suddenly became ill. He was taken back to Cheyenne, hospitalized the next day with an acute appendicitis, and died within days. Secretary of State Frank Houx became acting governor, but because Ross' death came before the next general election--albeit merely days before--there had to be a special election in Nov. 1924 to fill out the remaining two years of his term.

Both parties were unprepared to name nominees for the election. Everyone assumed that the 50-year-old governor would remain in office until the end of his term. No one expected his death at such a relatively young age. In hurried consultations, the Republicans chose a former house speaker, E. J. Sullivan, while the Democrats drafted Ross’ widow, Nellie Tayloe Ross, for the nomination. In a historic first, Mrs. Ross won the election becoming the first woman to serve as governor of any state. In the same election, William Ross' constitutional amendment to establish a severance tax went down to defeat. Actually, more voters supported it than opposed it, but the measure failed because of the constitutional requirement that it gained the majority of all votes cast in the election, not just more "yes" votes than "no" votes.

During her term, she did not concentrate on what could be called “women’s issues.” Nor did she continue to press for the severance tax after the constitutional amendment had failed so narrowly. In most respects, however, her policies reflected those of her late husband. She tried to have Prohibition strictly enforced, to the point of demanding removal of county officials who appeared less than zealous in the effort. When she sought a full four-year term in 1926, she lost narrowly for former state engineer Frank Emerson.

The plight of Wyoming banks during the terms of William and Nellie Ross worsened. In January 1920, the state counted 153 banks and 32 others opened during the next decade. At the same time, 101 banks closed in the 1920s, beginning with the collapse of four banks in small towns in 1920. Gov. Carey had done little to stem the banking crisis. Observers attributed his primary election loss in 1922 to his inability to grasp the economic issues. But the worst year for bank failures in Wyoming was 1924, in William Ross' governorship, when 23 state-chartered institutions failed and 12 with national charters closed their doors.[1]

The closures had a ripple effect on downtown businesses, particularly in communities of fewer than 1,000 people. Farm losses caused foreclosure actions to increase, but the smaller banks were unable to regain sufficient return from the collateral to pay back depositors. Failure of the local bank often brought failure to local merchants.

Store owners in larger towns with more diversified economies managed to keep the doors open. Few prospered, but the ones located in larger places close to smaller towns benefited from the decreased competition. A case in point involved the decline of the town of Manville in Niobrara County. The town, just nine miles from the county seat of Lusk, had reached a population of almost 3,000 by 1920. Oil activity north of town brought prosperity to merchants who also noticed increased school population of children from families occupying dry farms being carved from the surrounding prairie. The small local bank, overextended on loans to the newcomers in agriculture, closed Dec. 11, 1923. By the end of the year, two major businesses--a grocery and a clothier--ceased operations. Workers in the oil fields no longer found any need to shop in Manville. Banks, a grocery and clothing stores were open in Lusk, a few miles further on the highway. Within another year, downtown Manville contained mostly boarded up storefronts with a few service businesses managing to hang on.[2]

The consolidation of businesses was spurred by the new highway system. Throughout the country in the 1920s, politicians debated the merits of “farm-to-market” roads compared to “interstate” roads. Local farmers and merchants favored the former while the latter was preferred by truckers, the tourist industry and wholesalers. The newly formed State Highway Commission was dominated in the 1920s by boosters from communities wanting U. S. highway designation for roads through their towns. Luring tourists to town seemed more promising than attempting to connect the far-flung agricultural community to the larger towns. Consequently, the “farm-to-market” system was left to counties while state funds, including revenues from federal mineral royalties, built highways across the state and to the tourist attractions in Yellowstone National Park. (Read the Rick Ewig essay in Readings in Wyoming History).

For the larger towns, particularly along the southern tier of counties, air transportation created opportunities. In an era before pressurized cabins and engines powerful enough to cross over the Rockies in Colorado, airports in Wyoming had planes landing with increasing frequency. Cheyenne became a primary stop for transcontinental flights, particularly for those carrying the mail. The predecessor to United Airlines established its headquarters in Wyoming’s capital city and the maintenance shops for United remained in the city until World War II. The rapid changes in technology and development of “hub” systems after the war caused Cheyenne to lose out in the increasingly important airline passenger business.

The three “grand old men of Wyoming politics,” Francis E. Warren, Joseph M. Carey and John B. Kendrick, still dominated the state’s politics in the 1920s. Carey died in 1924, but his son, elected governor under Warren’s sponsorship in 1918 and defeated four years later, still maintained considerable support. Warren still dispensed much of the political patronage, including appointments of postmasters and land office officials, through his Republican “machine.” Kendrick, as conservative as Warren on most issues, but the leading Democrat, continued to focus attention on reclamation issues.[3]

During the decade of the 1920s, the two senators and Wyoming’s only U. S. Representative, Frank Mondell, shared the commonly accepted view that the various hard-hit industries in Wyoming eventually would come out of their economic difficulties. Government could do little to change the business cycle. The legislature did little to aid desperate farmers and ranchers. One measure did receive overwhelming support: a joint house-senate resolution asking Congress to “return” public lands to the states.

Wyomingites, like others around the country, turned to the radio for news and entertainment in the early 1920s. The first radio station in the state did not appear until February 1926--six years after radios were becoming common in Wyoming homes. The first station, KFA in Laramie, came into existence through the generosity of Mrs. Edward Harriman, widow of the owner of the Union Pacific Railroad. In a visit to the area in the early 1920s, she became concerned at the inability of area railroaders to know weather conditions along the route, particularly from Laramie east over the summit to Cheyenne. In conversations with the Episcopal Church bishop, she agreed to finance a radio station, primarily for weather reports, if the bishop would agree to house the station facilities. Consequently, on Feb. 3, 1926, Wyoming's first station went on the air, broadcasting from the basement of Laramie's Episcopal cathedral. The first commercial station, KDFN in Casper, went on the air Jan. 2, 1930.

While agriculture and business floundered, a state government employee did move toward consolidating the state’s hold on a resource that would prove crucial for any future development. State Engineer Frank Emerson helped organize a conference of the Colorado River basin states during which allocation of the river’s water was made. Through the Colorado River compact, Wyoming’s seven percent share of the total flow of the Colorado-Green River system seemed remarkably generous at the time when little use was being made of those waters in southwestern Wyoming. Emerson, continuing policies of his predecessors by staying out of the economic crises, continued to concentrate on water issues after he defeated Nellie Tayloe Ross for governor in 1926.

When the stock market crashed in October 1929, Wyoming residents noticed, but the impact on them was minimal. Wyoming was in economic depression; few citizens owned stocks and fewer still were employed by firms directly affected by the crash. Even when the national administration changed in 1933, Wyoming was slow to sign on with the New Deal. As Lorena Hickok wrote Eleanor Roosevelt, while the rest of the nation was facing the reality of depression, Wyomingites were already accustomed to it.[4] Changes would come slowly, but only the wartime economy would extract Wyomingites from the depression of the 1920s that stretched into the next decade.

[1] Peter Huntoon, “The Bank Failures of 1924,” Annals of Wyoming, Spring 1983.

[2]Information is derived from Anne Anderson Whitehead, A History of Manville, Wyoming, and the Manville Ranching Community. (Cheyenne: privately printed, 1998).

[3]The best source for political history of this period remains T. A. Larson, History of Wyoming. (Lincoln: Universtiy of Nebraska Press, 1965, 1977). Readers are advised to consult Larson for specifics about the political scene in Wyoming during these years. Also useful for the broader issues of boom and bust is Sam Western, Pushed Off the Mountain, Sold Down the River: Wyoming's Search for Its Soul. (Moose: Homestead Publishing, 2004).

[4]Quoted in Richard Lowitt, The New Deal and the West. (Bloomington: Indiana University Press, 1984), 30.

I. The Economic Scene at the Beginning of the Decade

a. World War I boom led to boom in homesteading--11,000 filed in Wyoming in 1920

c. banks lend money to returning veterans; thinly capitalized and heavy with mortgages

f. Union Pacific profits from hauling war material brings prosperity to southern tier

d. 17 banks fail, 1920-1923: Arvada, Lusk, Meeteetse, Garland, Guernsey, Moorcroft (2), Powder River, Upton, Gillette, Basin, Medicine Bow, Rock River, Wheatland, LaGrange, Marbleton, Manville

e. Democrats nearly extinct in 1920; Thurman Arnold only Democrat in House of Rep.

a. Wyoming, last state in region to adopt Prohibition (Colo., 1914; Idaho, 1915; Neb., S. D., Mont., 1916; Utah, 1917. Wyoming: July 1, 1919.

b. advocates: Women's Christian Temperance Union (WCTU), many politicians including Carey, Kendrick, Warren, W. Ross, N. T. Ross

e. by 1925, growing violence in enforcement; increasing opposition in many towns

a. Colorado River compact agreed to by western states (1922); Wyoming share of 7%

c. Emerson defeats Nellie Ross for governor, 1926; Mondell loses to Kendrick for Senate

d. 1920s end as decade of severe economic depression in Wyoming; prosperity elsewhere

e. stock market crashes, Oct. 29, 1929--beginning of "Great Depression" in United States

Union Pacific reorganization Thurman Arnold Caroline Lockhart “Great Crash” (Oct. 29, 1929)

I. The Economic Scene at the Beginning of the Decade

bank failures Depression of 1920s Prohibition “Great Depression” (US)

decline of small towns temperance